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Related Party Transactions
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

22.

RELATED PARTY TRANSACTIONS

a)

The table below sets forth the major related parties and their relationships with the Group:

 

 

 

 

Name of related parties

 

Relationship with the Group

Baidu and its subsidiaries (“Baidu Group”)

Others

 

Controlling shareholder of the Company

Equity investees

 

Xiaomi Group ceased to be a principal owner of the Company under ASC topic 850, Related Party Disclosures on October 26, 2017, hence the related party transactions with Xiaomi Group for the year ended December 31, 2017 includes transactions that occurred from January 1, 2017 to October 26, 2017.

b)

The Group had the following related party transactions with the major related parties:

 

 

 

For the year ended December 31,

 

 

 

2016

 

 

2017

 

 

2018

 

 

2018

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

US$

 

Membership services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Membership services revenue earned from

   memberships sold to Baidu Group

 

 

3,119

 

 

 

4,185

 

 

 

19,855

 

 

 

2,888

 

Membership services revenue earned from

   memberships sold by Xiaomi Group

 

 

26,794

 

 

 

81,450

 

 

 

 

 

 

 

Membership services revenue earned from

   memberships sold by Others

 

 

 

 

 

 

 

 

126

 

 

 

18

 

Online advertising revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising services provided to Baidu Group

 

 

116,029

 

 

 

18,337

 

 

 

189,461

 

 

 

27,556

 

Advertising services provided to Xiaomi Group

 

 

60,751

 

 

 

9,249

 

 

 

 

 

 

 

Advertising services provided to Others

 

 

 

 

 

 

 

 

13,347

 

 

 

1,941

 

Content distribution revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Content licensed to an equity investee

 

 

 

 

 

 

 

 

88,457

 

 

 

12,866

 

Other revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other services provided to Baidu Group

 

 

6,602

 

 

 

58,529

 

 

 

29,296

 

 

 

4,261

 

Other services provided to Xiaomi Group

 

 

7,132

 

 

 

4,625

 

 

 

 

 

 

 

Others

 

 

 

 

 

5,157

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan due from equity investees

 

 

 

 

 

 

 

 

2,202

 

 

 

320

 

 

 

 

220,427

 

 

 

181,532

 

 

 

342,744

 

 

 

49,850

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

License fees to Baidu Group

 

 

5,554

 

 

 

8,315

 

 

 

8,923

 

 

 

1,298

 

Bandwidth fee to Baidu Group

 

 

 

 

 

88,945

 

 

 

601,065

 

 

 

87,421

 

Traffic acquisition and other services provided

   by Baidu Group (i)

 

 

 

 

 

 

 

 

126,644

 

 

 

18,420

 

Commissions to Xiaomi Group

 

 

18,108

 

 

 

42,565

 

 

 

 

 

 

 

Others (iii)

 

 

 

 

 

1,817

 

 

 

52,484

 

 

 

7,633

 

Selling, general and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising services provided by Baidu Group

 

 

44,287

 

 

 

36,074

 

 

 

10,844

 

 

 

1,577

 

Traffic acquisition service provided by Baidu

   Group (ii)

 

 

29,932

 

 

 

29,932

 

 

 

 

 

 

 

Advertising services provided by Xiaomi Group

 

 

44,010

 

 

 

82,773

 

 

 

 

 

 

 

Others

 

 

 

 

 

139

 

 

 

822

 

 

 

120

 

Research and development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud services provided by Baidu Group

 

 

871

 

 

 

2,833

 

 

 

5,114

 

 

 

744

 

Interest expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan due to Baidu Group

 

 

106,731

 

 

 

168,154

 

 

 

 

 

 

 

 

 

 

249,493

 

 

 

461,547

 

 

 

805,896

 

 

 

117,213

 

 

(i)

As disclosed in Note 9, on April 12, 2018, the Company issued to Baidu an aggregate of 36,860,691 Class B ordinary shares pursuant to a share purchase agreement with Baidu entered into in February 2018, in exchange for Baidu providing traffic acquisition and other services in relation with ticket booking service, which was recorded as intangible assets. For the year ended December 31, 2018, RMB126,644(US$18,420) was recognized as cost of revenues.

 

(ii)

As disclosed in Note 9, the services agreement whereby Baidu Group provides traffic acquisition services was recorded as a favorable contract asset and RMB29,932, RMB29,932, and RMB nil (US$ nil) was recognized as selling, general and administrative expense for the years ended December 31, 2016, 2017 and 2018, respectively. In January 2018, the Company and Baidu agreed to terminate the traffic acquisition service contract in exchange for Baidu paying a fee of US$27,000 to the Company. The excess of the fee received by the Company over the book value of the recorded favorable contract asset was accounted for as a deemed contribution from the controlling shareholder, amounting to RMB104,200 (US$15,155).

 

(iii)

The Group entered into a one year revenue sharing arrangement with one equity investee of RMB100,000 (US$14,544) in the year ended December 31, 2018. RMBnil, RMBnil, and RMB32,642 (US$4,748) was recognized as cost of revenues for the years ended December 31, 2016, 2017 and 2018, respectively.

c)

The Group had the following related party balances with the major related parties:

 

 

 

As of December 31,

 

 

 

2017

 

 

2018

 

 

2018

 

 

 

RMB

 

 

RMB

 

 

US$

 

Amounts due from related parties:

 

 

 

 

 

 

 

 

 

 

 

 

Due from Baidu Group (i)

 

 

9,979

 

 

 

102,960

 

 

 

14,975

 

Loans receivable from Others (ii)

 

 

 

 

 

103,980

 

 

 

15,123

 

Due from Others (iii)

 

 

 

 

 

127,570

 

 

 

18,554

 

 

 

 

9,979

 

 

 

334,510

 

 

 

48,652

 

 

 

 

As of December 31,

 

 

 

2017

 

 

2018

 

 

2018

 

 

 

RMB

 

 

RMB

 

 

US$

 

Amounts due to related parties:

 

 

 

 

 

 

 

 

 

 

 

 

Loans due to Baidu Group (iv)

 

 

50,000

 

 

 

700,000

 

 

 

101,811

 

Due to Baidu Group (v)

 

 

77,628

 

 

 

421,942

 

 

 

61,369

 

Deferred revenue in relation to services to be provided

   to equity investee (vi)

 

 

 

 

 

726,155

 

 

 

105,615

 

Due to Others

 

 

2,471

 

 

 

125,663

 

 

 

18,277

 

 

 

 

130,099

 

 

 

1,973,760

 

 

 

287,072

 

 

(i)

The balance mainly represents amounts due from Baidu Group for advertising and other services. 

(ii)

The balance mainly represents loans provided to the Group’s equity investees with an interest rate of 5% that will mature in 2019.

(iii)

The balance mainly represents amounts due from or paid in advance to its equity investees for content distribution service .

(iv)

As of December 31, 2017 and 2018, the total outstanding balance represents an interest-free loan of RMB50,000, which is due on demand and the remaining outstanding balance as of December 31, 2018 is an interest-free loan of RMB650,000 (US94,539) provided by Baidu in January 2018 that will mature in January 2023. In April 2017, the Group borrowed a RMB denominated loan of RMB2,220,000 with an interest rate of 3.92% from Baidu Group, which was fully repaid in December 2017.     

(v)

The balance as of December 31, 2017 and 2018, represents accrued expenses for bandwidth and cloud services provided by Baidu Group.

(vi)

The balance as of December 31, 2018 mainly represents deferred revenue in relation to content distribution, licenses of intellectual property and traffic support services to be provided to one of the Group’s equity investees.