Fair Value Measurement

12 Months Ended

Mar. 31, 2024

7 FAIR VALUE MEASUREMENT

As of March 31, 2023 and 2024, the Group’s assets and liabilities that are measured or disclosed at fair value on a recurring basis in periods subsequent to their initial recognition are as follows:


	Fair value measurement at reporting date using
Description	Fair value as of March 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	RMB		RMB		RMB		RMB
Assets:
Short-term investments
- wealth management products		145,584		-		145,584		-
- equity securities with readily determinable fair values		252		252		-		-
Available-for-sale debt securities		34,368		-		-		34,368
Total assets		180,204		252		145,584		34,368


	Fair value measurement at reporting date using
Description	Fair value as of March 31, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	RMB		RMB		RMB		RMB
Assets:
Short-term investments
- wealth management products		51,935		-		51,935		-
- equity securities with readily determinable fair values		1,998		1,998		-		-
Available-for-sale debt securities		46,782		-		-		46,782
Total assets		100,715		1,998		51,935		46,782

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Following is a description of the valuation techniques that the Group uses to measure the fair value of assets that the Group reports in its Consolidated Balance Sheets at fair value on a recurring basis.

Short-term investments

Short-term investments held by the Group include wealth management products issued by banks and other financial institutions or equity securities with readily determinable fair values. The Group values its investments in wealth management products in using model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 2. The Group values its investments in equity securities with readily determinable fair values using quoted market prices and classifies the valuation technique that use these inputs within Level 1.

Available-for-sale debt securities investments

The Group classifies its available-for-sales debt securities as Level 3 investments. The roll forward of major Level 3 investments are as following:


	iSNOB Holdings Limited ("iSNOB")			Ruisha Technology			Juesekuangxiang (Shanghai) Technology Co. Ltd. (“Juesekuangxiang”)		Hangzhou Jimi Biotechnology Co., Ltd. (“Jimi”)		Poppy Mobile Inc ("Poppy")			Others			Total
	RMB			RMB							RMB			RMB			RMB
Fair value of Level 3 investments as at March 31, 2021		22,595			19,065			—		—		—			9,686			51,346
Addition		—			—			—		—		16,215			5,600			21,815
Disposal(1)		—			(18,157	)		—		—		—			(3,000	)		(21,157	)
Impairment		—			—			—		—		—			(4,635	)		(4,635	)
Effect of currency translation adjustment		(677	)		—			—		—		(344	)		(51	)		(1,072	)
The change in fair value of the investments		—			(908	)		—		—		—			(516	)		(1,424	)
Fair value of Level 3 investments as at March 31, 2022		21,918			—			—		—		15,871			7,084			44,873
Addition		—			—			—		—		—			8,000			8,000
Impairment		—			—			—		—		(16,817	)		(3,600	)		(20,417	)
Effect of currency translation adjustment		1,816			—			—		—		946			239			3,001
The change in fair value of the investments		922			—			—		—		—			(2,011	)		(1,089	)
Fair value of Level 3 investments as at March 31, 2023		24,656			—			—		—		—			9,712			34,368
Addition		—			—			6,875		5,459		—			—			12,334
Disposal		—			—			—		—		—			(298	)		(298	)
Impairment		—			—			—		—		—			(1,425	)		(1,425	)
Effect of currency translation adjustment		801			—			—		—		—			97			898
The change in fair value of the investments		564			—			—		—		—			341			905
Fair value of Level 3 investments as at March 31, 2024		26,021			—			6,875		5,459		—			8,427			46,782

(1)

As disclosed in Note 3, the Company derecognized its investment in Ruisha Technology and recycled the unrealized gain of RMB11,106 previously recognized in other comprehensive income into “Gain from investments, net” upon the consummation of the acquisition of Ruisha Technology in July 2021.

The Company determines the fair value of its available-for-sale debt securities by using the market approach.

As for the market approach, the determination of the fair value was based on information of other comparable public companies, observable price changes based on the recent transactions of the securities, or similar securities that the Company holds, and significant unobservable inputs. The unobservable inputs adopted in the valuation as of March 31, 2022, 2023 and 2024 are as following:


	For the years ended March 31,
	2022		2023	2024
Lack of marketability discount	30%		30%	30%
Risk-free rate	2%-3%		3.6%-4.3%	2.2%-4.5%
Expected volatility	30%-46%		39%-60%	42%-67%
Revenue multiple	1-10		4-9		3
Net profit multiple		25	/	/

Significant increases (decreases) in lack of marketability discount in isolation would result in significantly lower (higher) fair value measurement. Significant increases (decreases) in revenue multiple or net profit multiple in isolation would result in significantly higher (lower) fair value measurement.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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