JOYY(YY)2025-04-29 11:57Financial Performance and Revenue Sources - The company's operations in mainland China accounted for 19.7%, 15.3%, and 10.4% of total net revenues for the years ended December 31, 2022, 2023, and 2024, respectively[163]. - Revenues from variable interest entities in mainland China contributed 19.8%, 13.3%, and 9.9% to total net revenues for the years ended December 31, 2022, 2023, and 2024, respectively[170]. - The company may incur financial losses from derivatives transactions intended to manage exchange rate risk if local currencies increase in value instead of decreasing[157]. - Changes in tax laws, such as the OECD's announcement of a global minimum tax of 15%, could adversely impact the company's financial results[162]. Taxation and Compliance Risks - The company is subject to a potential income tax rate of 17% if classified as a tax resident in Singapore, with a preferential tax rate of 5% applicable from 2023 to 2027 for qualifying projects[160][161]. - The company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could lead to adverse tax consequences for U.S. holders of its ADSs[181]. - The company may incur adverse tax consequences if the contracts with variable interest entities are deemed not to be on an arm's length basis by tax authorities[174]. - The company must comply with evolving internet-related regulations in mainland China, which may require additional licenses or permits[166]. Legal and Regulatory Environment - The legal system in mainland China presents uncertainties that could materially affect the company's business operations and legal protections[164]. - The company faces risks related to its corporate structure in mainland China, which could lead to severe penalties if deemed non-compliant with local laws[171]. - The company faces risks related to potential litigation and regulatory investigations that could materially impact its financial condition and reputation[180]. Market and Shareholder Dynamics - The trading prices of the company's ADSs ranged from US42.88 in 2024, indicating potential volatility in the market[176]. - As of March 31, 2025, Mr. David Xueling Li and his affiliates held 86.1% of the total voting power, significantly influencing corporate decisions[186]. - Mr. Jun Lei, a major shareholder, beneficially owned 11.9% of the outstanding shares as of March 31, 2025, and has delegated voting rights to Mr. Li[189]. - The trading market for the company's American Depositary Shares (ADSs) could decline if analysts downgrade their recommendations or cease coverage[196]. Share Repurchase and Dividend Policies - The board of directors authorized the continued use of the unutilized quota under the pre-existing share repurchase program of approximately US400 million of shares until the end of November 2025[219]. - A new share repurchase program was approved in March 2025, authorizing the repurchase of up to US$300 million of shares until the end of 2027, replacing the previous plan extended in August 2024[219]. - The specific timing and amount of share repurchases and future dividend payments will depend on prevailing share prices, general economic conditions, company performance, and other considerations[219]. Shareholder Rights and Limitations - The company is exempt from certain U.S. securities regulations, which may result in less timely and extensive disclosures compared to U.S. domestic issuers[210]. - The company has relied on exemptions available to foreign private issuers, which may afford shareholders less protection than U.S. domestic issuers under Nasdaq corporate governance requirements[212]. - Holders of ADSs may not receive dividends or other distributions if it is illegal or impractical to make them available[216]. - Shareholders of the company have no general rights under Cayman Islands law to inspect corporate records, which may hinder their ability to obtain necessary information[204]. Corporate Governance and Control - The company’s articles of association contain anti-takeover provisions that may adversely affect shareholders' rights and could prevent them from selling shares at a premium[198]. - The depositary is not responsible for failing to carry out voting instructions or for their manner of carrying out voting instructions, which may limit shareholders' ability to influence management[215]. - The discretionary proxy given to the company by the depositary may make it more difficult for shareholders to influence management if they do not vote at shareholders' meetings[215]. - Judgments obtained against the company by shareholders may not be enforceable in the U.S. due to the majority of assets being located outside the United States[207].