Weibo Corporation Global Offering - :: HKEX :: HKEXnews ::

Stock Code : 9898

(a company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

Weibo Corporation

Global Offering

Joint Sponsors, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers

Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers

Joint Bookrunners and Joint Lead Managers

IMPORTANT: If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

WEIBO CORPORATION(a company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

GLOBAL OFFERING

Number of Offer Shares underthe Global Offering

: 11,000,000 Shares (including 5,500,000 NewShares and 5,500,000 Sale Shares)(subject to the Over-allotment Option)

Number of Hong Kong Offer Shares : 1,100,000 New Shares (subject toadjustment)

Number of International Offer Shares : 9,900,000 Shares (including 5,500,000 SaleShares) (subject to adjustment and theOver-allotment Option)

Maximum Offer Price : HK$388.00 per Offer Share plus brokerageof 1.0%, SFC transaction levy of0.0027% and Stock Exchange trading feeof 0.005% (payable in full on applicationin Hong Kong dollars, subject to refund)

Nominal value : US$0.00025 per ShareStock code : 9898

Joint Sponsors, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers

Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers

Joint Bookrunners and Joint Lead Managers

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited, and Hong Kong Securities Clearing Company Limited take no responsibility for thecontents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or inreliance upon the whole or any part of the contents of this document.A copy of this document, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies and Available on Display — Documents Deliveredto the Registrar of Companies” in Appendix V, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up andMiscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kongtake no responsibility for the contents of this document or any of the other documents referred to above.We expect to determine the pricing of the Offer Shares by agreement with the Joint Representatives (for themselves and on behalf of the Underwriters) on or about Thursday,December 2, 2021 and, in any event, not later than Friday, December 3, 2021. The Public Offer Price will be not more than HK$388.00 per Offer Share, unless otherwise announced.If, for any reason, we do not agree with the Joint Representatives (for themselves and on behalf of the Underwriters) on the pricing of the Offer Shares by Friday, December 3,2021, the Global Offering will not proceed and will lapse.We may set the International Offer Price at a level higher than the maximum Public Offer Price if, (a) the Hong Kong dollar equivalent of the closing trading price of the ADSson Nasdaq on the last trading day on or before the Price Determination Date were to exceed the maximum Public Offer Price as stated in this document; and/or (b) we believe thatit is in the best interests of our Company as a listed company to set the International Offer Price at a level higher than the maximum Public Offer Price based on the level of interestexpressed by professional and institutional investors during the bookbuilding process. If the International Offer Price is set at or lower than the maximum Public Offer Price, thePublic Offer Price must be set at such price that is equal to the International Offer Price. Under no circumstance will we set the Public Offer Price above the maximum Public OfferPrice as stated in this document or the International Offer Price.The Joint Representatives (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares being offered pursuant to the Global Offeringat any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. Further details are set out in the sections headed “Structureof the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this document.Prior to making an investment decision, prospective investors should carefully consider all of the information set out in this document, including the risk factors set out in the sectionheaded “Risk Factors” in this document. The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the JointRepresentatives (for themselves and on behalf of the Hong Kong Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. See the section headed “Underwriting— Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” in this document. It is important that you refer to that section for furtherdetails.Our ADSs, each representing one Share, are listed for trading on Nasdaq under the symbol “WB”. The reported sale price of the ADSs on Nasdaq on Wednesday, November 24,2021 was US$43.03 per ADS. In connection with the Global Offering, we have filed a registration statement on Form F-3 and a preliminary prospectus supplement and plan to filea final prospectus supplement with the SEC to register the sale of Offer Shares under the U.S. Securities Act.NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS DOCUMENTIS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.The Company is controlled through weighted voting rights (“WVR”). Prospective investors should be aware of the potential risks of investing in a company with a WVRstructure. For further information about the risks associated with our WVR structure, see the section headed “Risk Factors — Risks Relating to Our Shares, Our ADSsand the Listing.” Prospective investors should make the decision to invest in us only after due and careful consideration.

IMPORTANT

November 29, 2021

Your application through the White Form eIPO service or the CCASS EIPO service must befor a minimum of 20 Hong Kong Offer Shares and in one of the numbers set out in the table.You are required to pay the amount next to the number you select.

No. of HongKong Offer

Sharesapplied for

Amountpayable onapplication

HK$


Sharesapplied for


HK$


Sharesapplied for


HK$


Sharesapplied for


HK$

20 7,838.20 400 156,763.95 6,000 2,351,459.26 80,000 31,352,790.0840 15,676.40 500 195,954.94 7,000 2,743,369.13 90,000 35,271,888.8460 23,514.59 600 235,145.93 8,000 3,135,279.01 100,000 39,190,987.6080 31,352.79 700 274,336.91 9,000 3,527,188.88 200,000 78,381,975.20

100 39,190.99 800 313,527.90 10,000 3,919,098.76 300,000 117,572,962.80120 47,029.19 900 352,718.89 20,000 7,838,197.52 400,000 156,763,950.40140 54,867.39 1,000 391,909.88 30,000 11,757,296.28 500,000 195,954,938.00160 62,705.58 2,000 783,819.75 40,000 15,676,395.04 550,000(1) 215,550,431.80180 70,543.78 3,000 1,175,729.63 50,000 19,595,493.80200 78,381.98 4,000 1,567,639.50 60,000 23,514,592.56300 117,572.96 5,000 1,959,549.38 70,000 27,433,691.32

Note:

(1) Maximum number of Hong Kong Offer Shares you may apply for.

No application for any other number of the Hong Kong Offer Shares will be considered and anysuch application is liable to be rejected.

IMPORTANT

Hong Kong Public Offering commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9:00 a.m. onMonday, November 29, 2021

Latest time for completing electronic applications underWhite Form eIPO service through the designatedwebsite www.eipo.com.hk(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11:30 a.m. on

Thursday, December 2, 2021

Application lists open(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11:45 a.m. onThursday, December 2, 2021

Latest time for (a) completing payment for WhiteForm eIPO applications by effecting internet bankingtransfer(s) or PPS payment transfer(s) and (b) givingelectronic application instructions to HKSCC(4) . . . . . . . . . . . . . . . . . . . .12:00 noon on

Thursday, December 2, 2021

If you are instructing your broker or custodian who is a CCASS Clearing Participant or aCCASS Custodian Participant to give electronic application instructions via CCASSterminals to apply for the Hong Kong Offer Shares on your behalf, you are advised to contactyour broker or custodian for the latest time for giving such instructions which may bedifferent from the latest time as stated above.

Application lists close(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12:00 noon onThursday, December 2, 2021

Expected Price Determination Date(5) . . . . . . . . . . . . . . . . . . . .Thursday, December 2, 2021

Announcement of the Public Offer Price and the InternationalOffer Price on our website at http://ir.weibo.com(6) andthe website of the Hong Kong Stock Exchangeat www.hkexnews.hk on or around . . . . . . . . . . . . . . . . . . . .Thursday, December 2, 2021

Announcement of the level of indications of interest in theInternational Offering, the level of applications in theHong Kong Public Offering and the basis of allocation of theHong Kong Offer Shares on our website at http://ir.weibo.comand the website of the Hong Kong Stock Exchangeat www.hkexnews.hk on or before . . . . . . . . . . . . . . . . . . . . .Tuesday, December 7, 2021

The results of allocations in the Hong Kong PublicOffering (with successful applicants’ identificationdocument numbers, where appropriate) to be availablethrough a variety of channels, including:

• in the announcement to be posted on our website andthe website of the Hong Kong Stock Exchangeat http://ir.weibo.com and www.hkexnews.hk,respectively from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, December 7, 2021

EXPECTED TIMETABLE(1)

– i –

• from the designated results of allocations websiteat www.iporesults.com.hk (alternatively: Englishhttps://www.eipo.com.hk/en/Allotment; Chinesehttps://www.eipo.com.hk/zh-hk/Allotment)with a “search by ID” function from . . . . . .8:00 a.m. on Tuesday, December 7, 2021

to 12:00 midnight onMonday, December 13, 2021

• from the allocation results telephone enquiryby calling +852 2862 8555 between 9:00 a.m.and 6:00 p.m. from. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, December 7, 2021

to Friday, December 10, 2021

Share certificates in respect of wholly or partially successfulapplications to be dispatched/collected or deposited into CCASSon or before(7)(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, December 7, 2021

White Form e-Refund payment instructions/refund checksin respect of wholly or partially successful applicationsif the final Offer Price is less than the price payable on application(if applicable) or wholly or partially unsuccessfulapplications to be dispatched/collected on or before(8)(9) . . . . .Tuesday, December 7, 2021

Dealings in Class A Shares on the Stock Exchange expectedto commence at 9:00 a.m. on . . . . . . . . . . . . . . . . . . . . . . .Wednesday, December 8, 2021

Notes:

(1) All dates and times refer to Hong Kong local dates and time, except as otherwise stated.

(2) You will not be permitted to submit your application under White Form eIPO service through the designatedwebsite at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have alreadysubmitted your application and obtained an application reference number from the designated website at orbefore 11:30 a.m., you will be permitted to continue the application process (by completing payment ofapplication monies) until 12:00 noon on the last day for submitting applications, when the application listsclose.

(3) If there is/are a tropical cyclone warning signal number 8 or above, a “black” rainstorm warning and/orExtreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday,December 2, 2021, the application lists will not open or close on that day. See “How to Apply for Hong KongOffer Shares — C. Effect of Bad Weather and Extreme Conditions on the Opening and Closing of theApplication Lists”.

(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCCvia CCASS or instructing your broker or custodian to apply on your behalf via CCASS should refer to “Howto Apply for Hong Kong Offer Shares — A. Applications for the Hong Kong Offer Shares — Applying throughCCASS EIPO service”.

(5) The Price Determination Date is expected to be on or around Thursday, December 2, 2021 and, in any event,not later than Friday, December 3, 2021. If, for any reason, we do not agree with the Joint Representatives (forthemselves and on behalf of the Underwriters) on the pricing of the Offer Shares by Friday, December 3, 2021,the Global Offering will not proceed and will lapse.

(6) None of the websites set out in this section or any of the information contained on the websites forms part ofthis document.


– ii –

(7) Share certificates will only become valid at 8:00 a.m. on the Listing Date provided that the Global Offeringhas become unconditional and the right of termination described in “Underwriting — UnderwritingArrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” has not beenexercised. Investors who trade Shares on the basis of publicly available allocation details or prior to the receiptof Share certificates or the Share certificates becoming valid do so entirely at their own risk.

(8) e-Refund payment instructions/refund checks will be issued in respect of wholly or partially unsuccessfulapplications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially successfulapplications in the event that the final Public Offer Price is less than the price payable per Offer Share onapplication. Part of the applicant’s Hong Kong identity card number or passport number, or, if the applicationis made by joint applicants, part of the Hong Kong identity card number or passport number of the first-namedapplicant, provided by the applicant(s) may be printed on the refund check, if any. Such data would also betransferred to a third party for refund purposes. Banks may require verification of an applicant’s Hong Kongidentity card number or passport number before encashment of the refund check. Inaccurate completion of anapplicant’s Hong Kong identity card number or passport number may invalidate or delay encashment of therefund check.

(9) Applicants who have applied on White Form eIPO for 100,000 or more Hong Kong Offer Shares may collectany refund checks (where applicable) and/or Share certificates in person from our Hong Kong Share Registrar,Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183Queen’s Road East, Wan Chai, Hong Kong from 9:00 a.m. to 1:00 p.m. on Tuesday, December 7, 2021 or suchother date as notified by us as the date of despatch/collection of Share certificates/e-Refund paymentinstructions/refund checks. Applicants being individuals who are eligible for personal collection may notauthorize any other person to collect on their behalf. Individuals must produce evidence of identity acceptableto our Hong Kong Share Registrar at the time of collection.

Applicants who have applied for Hong Kong Offer Shares through CCASS EIPO service should refer to “Howto Apply for Hong Kong Offer Shares — G. Despatch/Collection of Share Certificates/e-Refund PaymentInstructions/Refund Checks — Personal Collection — If you apply through CCASS EIPO service” for details.

Applicants who have applied through the White Form eIPO service and paid their applications moniesthrough single bank accounts may have refund monies (if any) dispatched to the bank account in the form ofe-Refund payment instructions. Applicants who have applied through the White Form eIPO service and paidtheir application monies through multiple bank accounts may have refund monies (if any) dispatched to theaddress as specified in their application instructions in the form of refund checks by ordinary post at their ownrisk.

Share certificates and/or refund checks for applicants who have applied for less than 100,000 Hong Kong OfferShares and any uncollected Share certificates and/or refund checks will be dispatched by ordinary post, at theapplicants’ risk, to the addresses specified in the relevant applications.

Further information is set out in “How to Apply for Hong Kong Offer Shares — Refund of ApplicationMonies” and “How to Apply for Hong Kong Offer Shares — Despatch/collection of Share Certificates/e-Refund Payment Instructions/Refund Checks”.

The above expected timetable is a summary only. For details of the structure of the GlobalOffering, including its conditions, and the procedures for applications for Hong Kong OfferShares, please refer to “Structure of the Global Offering” and “How to Apply for Hong KongOffer Shares” respectively.

If the Global Offering does not become unconditional or is terminated in accordance with itsterms, the Global Offering will not proceed. In such a case, we will publish an announcementas soon as practicable thereafter.


– iii –

IMPORTANT NOTICE TO INVESTORS

This document is issued by us solely in connection with the Hong Kong Public Offeringand the Hong Kong Offer Shares and does not constitute an offer to sell or a solicitationof an offer to buy any security other than the Hong Kong Offer Shares offered by thisdocument pursuant to the Hong Kong Public Offering. This document may not be usedfor the purpose of making, and does not constitute, an offer or invitation in any otherjurisdiction or in any other circumstances. No action has been taken to permit thedistribution of this document in any jurisdiction other than Hong Kong. The distributionof this document and the offering of the Offer Shares in other jurisdictions are subject torestrictions and may not be made except as permitted under the applicable securities lawsof such jurisdictions pursuant to registration with or authorization by the relevantsecurities regulatory authorities or an exemption therefrom.

You should rely only on the information contained in this document to make yourinvestment decision. We have not authorized anyone to provide you with information thatis different from what is contained in this document. Any information or representationnot made in this document must not be relied on by you as having been authorized by us,the Joint Sponsors, Joint Representatives, Joint Global Coordinators, Joint Bookrunners,and Joint Lead Managers, the Underwriters, any of our or their respective directors or anyother person or party involved in the Global Offering.

Page

Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Glossary of Technical Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Forward-looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Information about This Document and the Global Offering . . . . . . . . . . . . . . . . . 127

Waivers and Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Directors and Parties Involved in the Global Offering . . . . . . . . . . . . . . . . . . . . . 165

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

History and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

CONTENTS

– iv –

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

Relationship with our Controlling Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274

Major Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286

Regulatory Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300

Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343

Structure of the Global Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350

How to Apply for Hong Kong Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361

Appendix IA — Accountant’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IA-1

Appendix IB — Unaudited Interim Condensed ConsolidatedFinancial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . IB-1

Appendix II — Unaudited Pro Forma Financial Information . . . . . . . . . . II-1

Appendix III — Summary of Our Constitution andCayman Company Law . . . . . . . . . . . . . . . . . . . . . . . . . III-1

Appendix IV — Statutory and General Information. . . . . . . . . . . . . . . . . . IV-1

Appendix V — Documents Delivered to the Registrar of Companies andAvailable on Display . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

CONTENTS

– v –

This summary aims to give you an overview of the information contained in thisdocument. As it is a summary, it does not contain all the information that may beimportant to you and is qualified in its entirety by, and should be read in conjunctionwith, the full document. You should read the whole document before you decide to investin the Offer Shares. There are risks associated with any investment. Some of theparticular risks in investing in the Offer Shares are set forth in the section headed “RiskFactors” of this document. You should read that section carefully before you decide toinvest in the Offer Shares.

OVERVIEW

Who We Are

Weibo is a leading social media platform in China for people to create, discover and distributecontent. By providing a simple and inspirational way for people and organizations in China andthe global Chinese communities to publicly express themselves in real time, interact withothers on a platform with vast scale and stay connected with the world, Weibo has had aprofound social impact in China. Launched in 2009, Weibo has been committed to enablingfaster, easier, and richer connection among people and has become an integral part of many ofWeibo users’ daily lives.

Leveraging the early-mover advantage and the accumulated know-hows and insights in thesocial media industry, Weibo has amassed a large user base in China and in Chinesecommunities in more than 190 countries around the world. In June 2021, Weibo had 566million MAUs and 246 million average DAUs. Weibo is one of the top 10 mobile apps and oneof the top 3 social media platforms in China in terms of MAUs and DAUs in June 2021,according to the CIC Report.

Weibo has transformed the way people express themselves and interact with others in thepublic internet space. Any user can create and post a feed and attach multimedia or long-formcontent. User relationships on Weibo may be asymmetric, and any user can follow any otheruser and add comments to a feed while reposting. As of June 30, 2021, Weibo had 318 billion“follow” relationships existing on its platform. This simple, asymmetric, and distributed natureof Weibo allows an original feed to become a live viral conversation stream.

Weibo serves a wide range of users including ordinary people, celebrities, key opinion leaders(“KOLs”), and other public figures or influencers, as well as media outlets, businesses,government agencies, charities, and other organizations, making it a microcosm of Chinesesociety. As of June 30, 2021, there were 4.4 million verified accounts, such as celebrities,KOLs, enterprise partners, and media outlets on Weibo. As a leading social media, Weiboallows people in China and the global Chinese communities to be heard publicly and exposedto the rich ideas, cultures, and experiences in a broader world. In June 2021, Weibo had 41.9million monthly active content creators, generating original posts for public self-expression. InJune 2021, top content creators on Weibo platform reached 2.3 million, representing a CAGRof 24% from June 2019. Top content creators in June 2021 refers to content creators with morethan 10,000 followers as of June 30, 2021, or over 10,000 monthly views in June 2021,excluding duplicates.

SUMMARY

– 1 –

Weibo offers comprehensive content formats as a social media platform. Weibo users cancreate, discover, consume and share various formats of content, including text, photo, video,live streaming, audio and topic, etc. on Weibo platform. By aggregating various media formats,Weibo platform allows content creators to have more diverse choices to create content in theirmost desirable ways, so that more enriched content could be generated and distributed acrossthe platform. Weibo is also well positioned to capture the market trends in media formatstransformation. To capitalize on the mega trend of video, Weibo has launched a series ofinnovative initiatives to improve its video product offerings and to empower and attract morevideo content creators to its platform. As a result, the average number of daily video viewersgrew at a CAGR of 20% from June 2019 to June 2021.

To support the diverse content offerings, Weibo also has comprehensive coverage of contentcategories and content creators. In June 2021, Weibo had 46 content verticals, such ascelebrities and entertainment, humor, media, variety shows and TV programs, fashion,cosmetics, finance and games. Among these content verticals, 28 of them each has over 10billion monthly views in June 2021. The diversified content offerings on Weibo platform caterto the evolving and broad interests of Weibo users and cultivate a more vibrant ecosystem onWeibo platform.

Our Revenue Model

We began monetization on our platform in 2012, and have since experienced solid revenuegrowth and margin expansion. Our revenues increased from US$1,718.5 million in 2018 toUS$1,766.9 million in 2019 but slightly decreased to US$1,689.9 million in 2020 mainly dueto the negative impact and uncertainties brought forth by the COVID-19 pandemic. Ourrevenue’s year-on-year growth rate recovered to 10% in the fourth quarter of 2020 and furtherincreased to 42% in the first quarter and 48% in the second quarter of 2021, as the COVID-19pandemic was gradually contained in China and the advertising demand recovered accordingly.

We generate revenues primarily from customers who purchase advertising and marketingservices, and, to a lesser extent, from fee-based revenues, such as VIP membership. Revenuesgenerated from advertising and marketing services accounted for 88% of our total revenues in2020 and 86% of our total revenues in the six months ended June 30, 2021. We had incomefrom operations of US$609.3 million in 2018, US$597.6 million in 2019 and US$506.8 millionin 2020. Our income from operations increased from US$164.2 million in the six months endedJune 30, 2020 to US$301.8 million for the same period in 2021. Our operating margin, beingthe ratio of income from operations to total revenues, reached 30.0% in 2020 and 29.2% in thefirst six months ended June 30, 2021.

Our Mission

Our mission is to empower people to discover the broader world and be heard publicly.

SUMMARY

– 2 –

Our Value Propositions

Our platform has unique value propositions for our users, content creators and advertising andmarketing customers. Our collective relationship with them is crucial to the continued strengthand value of our overall platform.

To users

• Express and share

� We provide an unprecedented experience for people in China and the global Chinesecommunities to be able to publicly express themselves and share their life moments,opinions and content in real time on a platform with a vast scale.

• Discover rich content and diversified opinions

� Weibo is where people come to discover and learn more about what is going on withthe people, organizations and topics that interest them, as well as their diversifiedopinions.

• Stay current and connected

� Users come to Weibo to stay current on the latest trends and events and connect withother users who share similar interests.

• Make a social impact

� Weibo helps people come together to realize common goals, and to accomplishthings that they could not accomplish on their own.

To content creators

• Build up fan base and social assets

� We help the content creators on our platform to engage and interact with theirfollowers and build up their social assets to create social value and monetizationopportunities. The top content creators, such as celebrities and KOLs, regularlyinteract with their followers, and among each other for topics of the same intereston Weibo. This type of interaction is unique to our platform.

• Monetization

� We are committed to creating and enhancing monetization opportunities for contentcreators through diversified channels such as advertisement, e-commerce and livestreaming.

SUMMARY

– 3 –

To advertising and marketing customers

• Broad and targeted reach

� We are an early mover of social advertising in China. We provide our customers withsocial marketing solutions based on our social interest graph recommendationengine that help them reach and engage their target audience.

• Full spectrum of tailored solutions

� We provide a full spectrum of innovative and tailored advertising and marketingsolutions ranging from brand awareness to interest generation, sales conversion andloyalty marketing to cater to the diverse marketing demands of our customers.

• Viral effect

� Weibo feeds and trends, whether promoted or organic, have the potential to go viraldue to the public and distributed nature of our platform. This provides our customerswith additional upside value to increase the social elements of their advertising.

COMPETITIVE LANDSCAPE

In China, there are several types of social platforms dedicated to serving users’ needs tovirtually connect with each other. Compared with social network platforms, where socialrelationship is primarily symmetric and reciprocal, social media platforms facilitate thebuild-out of asymmetric social relationship and address users’ differentiated social needs in thepublic arena. Furthermore, among the leading social media platforms in China, some focus onspecific content formats such as video and live streaming, while others provide comprehensivecontent formats to cater to the diverse user needs. Platforms with more diverse content formatsand more vibrant content creation ecosystems are better equipped to address the evolving userneeds with diverse backgrounds and interests.

Weibo is one of the top 5 social platforms and the top 3 social media platforms in China interms of MAUs and DAUs in June 2021, according to the CIC report.

Weibo operates in a highly competitive industry which is rapidly changing due to the quicklyevolving market demand and user preferences. Driven by the increasing popularity of socialplatforms, the penetration rate for the social platforms, measured by the ratio of overall socialplatform users to all mobile users, has already come to hover near the 100% mark in 2020. Newuser acquisition has been one of the key challenges that each of the social platforms faces. Theindustry is evolving rapidly while witnessing rising competition for traffic and user time.Industry players compete for audiences and content with other major Chinese internetcompanies that provide online media as well as offline media companies. The user growth rateof established social media platforms may slow over time as the size of the user base increasesand as they achieve higher market penetration in China’s internet population. For a moredetailed discussion on and a comparison of key metrics of social platforms and social mediaplatforms in China, see also “Industry Overview — Competitive Landscape For Social MediaPlatforms” and “Industry Overview — Competitive Landscape For Social Platforms.”

SUMMARY

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OUR INNOVATION

We believe that our success is attributable to our unique social product positioning, aself-reinforcing ecosystem with large user base and diversified content offerings, as well asstrong monetization capability and leading technology platform.

Launched in 2009, Weibo is one of the earliest social media platforms (providingmicroblogging service) in China, according to the CIC Report. Weibo leverages its early-moveradvantage and has built high entry barrier in the social media industry in China. Currently,Weibo is the only active social media platform today arising from a microblogging platform inChina, according to the CIC Report. Weibo has experienced rapid expansion as an early-moversince its inception, and developed into a leading social media platform in China for people tocreate, share and discover contents online.

As a leading social media platform in China, Weibo combines the means of publicself-expression in real time with powerful platform for social interaction, content aggregationand distribution. Weibo provides a compelling and efficient way for people to discover what’shappening in the world and engage in public social conversations. Weibo serves as amicrocosm of Chinese society, and for many people in China, Weibo allows them to be heardpublicly and exposed to the rich ideas, cultures and experiences of the broader world. See“Business — Our Commitment to a Better Society.” Weibo’s success is also attributable to thehigh quality content in rich media format on its platform. For the leading position of Weibo interms of content formats, coverage of content categories and content generators, and celebrityand KOL network among social media platforms, see “Industry Overview — CompetitiveLandscape for Social Media Platforms.”

Weibo’s product development approach is centered on building simple and useful tools toenable its users to access Weibo to discover, create, and distribute content and interact withothers on its platform in real time. Weibo has launched many innovative product features sinceits inception, some of which are later widely adopted in China’s internet space, such as@Mention, Trends, Hot Search and Super Topic. See “Business — Products and Services —Products for Users.”

Weibo seeks to provide innovative advertising and marketing solutions to enable its customersto promote their brands and conduct effective marketing activities. Weibo’s advertising andmarketing customers seek a full spectrum of online advertising and marketing services rangingfrom brand awareness to interest generation, sales conversion and loyalty marketing. Weibo hasintroduced many innovative advertising products, such as Super FST, Promoted Trends andSearch. See “Business — Products and Services — Products for Advertising and MarketingCustomers.”

Weibo is passionate about developing new and innovative products and services that will createa better user experience. Built on machine learning and cloud computing, Weibo has developeda leading social media platform to satisfy users’ customized content consumption needs,according to the CIC Report. Weibo invests heavily in research and development. Weiborecorded product development expenses of US$249.9 million, US$284.4 million, US$324.1million and US$198.0 million in 2018, 2019, 2020 and for the six months ended June 30, 2021,respectively. The product development team of Weibo consisted of 2,374 members as ofDecember 31, 2018, 2,364 members as of December 31, 2019, 2,709 members as of December31, 2020, and 2,770 members as of June 30, 2021. They are responsible for developing,operating and maintaining our products. See “Business — Technology, Research andDevelopment.”

SUMMARY

– 5 –

KEY OPERATING METRICS

December2018

December2019

December2020

June2021

MAUs (in millions) �� 462 516 521 566

Average DAUs (in millions) �� 200 222 225 246

Ratio of average DAUs toMAUs �� 43% 43% 43% 43%

We have a large and active user base. Our MAUs increased from 462 million in December2018, to 516 million in December 2019, to 521 million in December 2020 and further to 566million in June 2021. Our average DAUs increased from 200 million in December 2018, to 222million in December 2019, to 225 million in December 2020 and further to 246 million in June2021. The ratio of average DAUs to MAUs remained stable at 43% during the Track RecordPeriod.

Our user growth rate may fluctuate from time to time depending on various factors, includingour business operation and user base growth, as well as the general market condition. See “RiskFactors – Risks Relating to Our Business – If we fail to grow our active user base, or if userengagement on our platform declines, our business, financial condition and operating resultsmay be materially and adversely affected”.

For the Year Ended December 31,For the Six Months

Ended June 30,

2018 2019 2020 2020 2021

Average spending peradvertiser (excludingAlibaba)(in US$) �� 470 593 825 454 1,379

Number of advertisingcustomers(in millions) �� 2.9 2.4 1.6 1.2 0.6

The total number of advertisers was 2.4 million in 2019, compared to 2.9 million in 2018,mainly due to customer churn of SME customers, as a result of mixed challenges fromunfavorable macroeconomic conditions and intense market competitions. The averagespending per advertiser (excluding Alibaba) increased by 26% from $470 in 2018 to $593 in2019, primarily attributable to the increase in spending by our recurring customers, and alsoa reflection of the churn of SME customers with relatively lower advertising budget.

The total number of advertisers was 1.6 million in 2020, compared to 2.4 million in 2019, whilethe average spending per advertiser (excluding Alibaba) increased by 39% from $593 in 2019to $825 in 2020, both of which were primarily due to the churn of individual customers withrelatively lower advertising budget.

SUMMARY

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The total number of advertisers was 0.6 million in the first six months ended June 30, 2021,compared to 1.2 million in the same period in 2020, while the average spending per advertiser(excluding Alibaba) increased significantly from US$454 in the first six months ended June 30,2020 to US$1,379 in the same period in 2021, both of which were primarily due to the churnof individual customers with relatively lower advertising budget.

As of December 31,As of

June 30,

2018 2019 2020 2021

Number of verified accounts(in millions) �� 3.7 4.0 4.3 4.4

The number of our verified accounts generally increased during the Track Record Period as wekept growing our network of celebrities, KOLs, enterprises partners and media outlets.

OUR STRENGTHS

We believe that the following competitive strengths contribute to our success and differentiateus from our peers.

• Pioneer and Leader in Social Media Industry in China

• Robust Ecosystem with Powerful Network Effects

• Large, Diverse and Engaged User Base

• Ever-Growing Supply of Rich and Comprehensive Content Offerings

• Proven and Continuous Growth in Monetization

• Cutting-Edge Technological Capabilities and Scalable Infrastructure

• Visionary and Experienced Management Team with A Proven Track Record

OUR STRATEGIES

We intend to achieve our mission and further solidify our unique position by pursuing thefollowing strategies.

• Grow Our User Base and Increase User Engagement

• Further Expand and Improve Our Content Ecosystem

• Enhance Monetization Capabilities

• Selectively Pursue Strategic Alliances, Investments and Acquisitions

SUMMARY

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SUMMARY OF HISTORICAL FINANCIAL INFORMATION

Selected Consolidated Statements of Operations

The following table sets forth a summary of our consolidated results of operations for theperiods presented. This information should be read together with our audited consolidatedfinancial statements included in the Accountant’s Report in Appendix IA to this document. Theresults of operations in any period are not necessarily indicative of our future trends.


Ended June 30,

2018(1) 2019(1) 2020(1) 2020(1) 2021(1)

(Unaudited)(In US$ thousands, except for per share and per ADS data)

Consolidated Statements of Operations Data:Revenues:

Advertising and marketing revenues:Third parties �� 1,172,136 1,202,437 1,202,712 497,855 728,818Alibaba(2)�� 117,696 97,772 188,597 72,542 109,918SINA �� 79,148 112,974 48,353 27,624 30,931Other related parties �� 130,200 117,028 46,493 17,985 22,682

Subtotal �� 1,499,180 1,530,211 1,486,155 616,006 892,349Value-added services revenues �� 219,338 236,703 203,776 94,776 141,013

Total revenues �� 1,718,518 1,766,914 1,689,931 710,782 1,033,362

Costs and expenses:Cost of revenues(3) �� 277,648 328,826 302,180 137,694 172,318Sales and marketing(3) �� 527,424 465,339 455,619 211,220 298,368Product development(3) �� 249,873 284,444 324,110 150,370 197,985General and administrative(3)(4) �� 43,755 90,721 101,224 47,298 62,850Goodwill and acquired intangibles impairment �� 10,554 — — — —

Total costs and expenses �� 1,109,254 1,169,330 1,183,133 546,582 731,521

Income from operations �� 609,264 597,584 506,798 164,200 301,841Income (loss) from equity method investments �� 57 (13,198) 10,434 3,388 13,605Realized gain (loss) from investments �� (287) 612 2,153 844 1,106Fair value changes through earnings on investments,

net(5) �� 40,074 207,438 35,115 117,517 (69,495)Investment related impairment(6)�� (24,074) (249,935) (211,985) (3,920) (66,625)Interest income �� 57,970 85,386 85,829 45,609 40,068Interest expense �� (15,390) (29,896) (57,428) (22,363) (35,503)Other income, net�� 1,228 4,406 4,997 1,356 6,808

Income before income tax expenses �� 668,842 602,397 375,913 306,631 191,805Less: Provision of income taxes �� 96,222 109,564 61,316 56,627 61,855

SUMMARY

– 8 –


Ended June 30,

2018(1) 2019(1) 2020(1) 2020(1) 2021(1)


Net income �� 572,620 492,833 314,597 250,004 129,950Less: Net income (loss) attributable to

non-controlling interests and redeemablenon-controlling interests�� 797 (1,842) 1,233 (520) (898)

Net income attributable to Weibo’s shareholders �� 571,823 494,675 313,364 250,524 130,848

Shares used in computing net income per shareattributable to Weibo’s shareholders:Basic �� 223,751 225,452 226,921 226,535 227,936Diluted�� 232,683 226,412 227,637 227,129 229,429

Income per ordinary share:Basic �� 2.56 2.19 1.38 1.11 0.57Diluted�� 2.52 2.18 1.38 1.10 0.57

Income per ADS(7):Basic �� 2.56 2.19 1.38 1.11 0.57Diluted�� 2.52 2.18 1.38 1.10 0.57

(1) On January 1, 2018, we adopted new revenue guidance ASC Topic 606, “Revenue from Contracts withCustomers,” using the modified retrospective method applied to those contracts which were not completed asof January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic606, while prior period amounts are not adjusted and continue to be reported in accordance with our historicaccounting method under Topic 605. Topic 606 requires the presentation of VAT recognized in revenues from“gross” to “net,” which results in equal decrease in revenues and cost of revenues, and recognition of revenuesand expenses at fair value for advertising barter transactions.

(2) We recorded US$117.7 million, US$97.8 million and US$152.0 million in advertising and marketing revenuesfrom Alibaba during 2018, 2019 and 2020, respectively. We also recorded US$63.3 million and US$73.3million in advertising and marketing revenues from Alibaba for the six months ended June 30, 2020 and 2021,respectively. Moreover, one of Alibaba’s subsidiaries began the business of advertising agency and contributedanother US$36.6 million to our total revenues in 2020, and US$9.2 million and US$36.7 million to our totalrevenues for the six months ended June 30, 2020 and 2021, respectively.

(3) Stock-based compensation was allocated in costs and expenses as follows:


Ended June 30,

2018 2019 2020 2020 2021

(Unaudited)(in US$ thousands)

Cost of revenues�� 3,522 5,251 5,384 2,502 3,240Sales and marketing �� 6,837 9,828 9,983 4,263 5,549Product development �� 21,187 28,628 33,093 14,452 18,213General and administrative �� 9,465 17,582 18,645 8,971 9,219

Total �� 41,011 61,289 67,105 30,188 36,221

SUMMARY

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(4) We adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losseson Financial Instruments” in the fiscal year of 2020. The guidance requires the measurement and recognitionof expected credit losses for financial assets held at amortized cost that an entity does not expect to collect overthe asset’s contractual life, considering past events, current conditions, and reasonable and supportableforecasts of future economic conditions.

(5) We adopted ASU 2016-01 “Classification and Measurement of Financial Instruments” beginning the firstquarter of fiscal year 2018. After the adoption of the new accounting update, we measure investments in equitysecurities, other than equity method investments, at fair value through earnings. For those investments withoutreadily determinable fair values, we elected to record these investments at cost, less impairment, and plus orminus subsequent adjustments for observable price changes. Changes in the basis of these investments arereported in current earnings.

(6) Investment related impairment includes impairment charges to equity investments, investment prepayments,and loans to and interest receivable from related parties.

(7) Each ADS represents one Class A ordinary share.

Net income attributable to Weibo’s shareholders decreased from US$250.5 million for the sixmonths ended June 30, 2020 to US$130.8 million for the six months ended June 30, 2021. Thedecrease primarily resulted from (i) total cost and expenses increasing by US$184.9 million,from US$546.6 million for the six months ended June 30, 2020 to US$731.5 million for thesame period in 2021, (ii) net income from non-operations of US$142.4 million for the sixmonths ended June 30, 2020, compared to net loss from non-operations of US$110.0 millionfor the same period in 2021, which primarily resulted from US$69.5 million of fair valuechange loss from investments in marketable equity securities and US$66.6 million ofinvestment related impairment, and (iii) partially offset by total revenues increasing byUS$322.6 million, from US$710.8 million for the six months ended June 30, 2020 toUS$1,033.4 million for the same period in 2021.

Net income attributable to Weibo’s shareholders decreased from US$494.7 million in 2019 toUS$313.4 million in 2020. The decrease was mainly due to (i) total revenues decreasing byUS$77.0 million, from US$1,766.9 million in 2019 to US$1,689.9 million in 2020 and (ii) netloss from non-operations amounting to US$130.9 million in 2020, which included non-cashinvestment-related impairment of US$212.0 million, compared to net income from non-operations of US$4.8 million in 2019.

Net income attributable to Weibo’s shareholders decreased from US$571.8 million in 2018 toUS$494.7 million in 2019. The decrease largely resulted from (i) total cost and expensesincreasing by US$60.0 million, from US$1,109.3 million in 2018 to US$1,169.3 million in2019, (ii) net income from non-operations of US$59.6 million in 2018, decreasing to netincome from non-operations of US$4.8 million in 2019, and (iii) partially offset by totalrevenues increasing by US$48.4 million, from US$1,718.5 million in 2018 to US$1,766.9million in 2019.

SUMMARY

– 10 –

Selected Consolidated Balance Sheet Data


June 30,

2018 2019 2020 2021

(in US$ thousands)

Cash and cash equivalents �� 1,234,596 1,452,985 1,814,844 2,005,106Short-term investments�� 591,269 951,235 1,682,048 930,822Amount due from SINA �� 105,319 384,828 548,900 498,618Long-term investments �� 694,586 1,027,459 1,179,466 1,123,258Total assets(1) �� 3,274,682 4,804,186 6,335,117 6,702,725Convertible debt �� 884,123 888,266 892,399 894,470Unsecured senior notes�� — 793,985 1,536,112 1,537.264Total liabilities(1) �� 1,526,544 2,522,367 3,448,787 3,595,107Net current assets �� 1,839,254 2,835,323 3,876,189 3,560,382Ordinary shares�� 57 57 57 57Additional paid-in capital�� 1,071,836 1,133,913 1,201,622 1,239,461Retained earnings �� 723,181 1,217,856 1,531,220 1,662,068Non-controlling interests �� 2,679 (1,448) 16,191 28,221Total shareholders’ equity �� 1,748,138 2,281,819 2,828,616 3,038,259

(1) We adopted the new leasing guidance (ASU 2016-2) from January 1, 2019, which requires that a lesseerecognize the assets and liabilities that arise from operating leases. We recognized a right-of-use asset and aliability relating to lease payments (the Lease Liability) in the statements of financial position for leasecontracts having terms beyond 12 months period.

Selected Consolidated Cash Flow Data

The following table sets forth the movements of our cash and cash equivalents for the periodspresented:


Ended June 30,

2018 2019 2020 2020 2021


Net cash provided by operatingactivities �� 488,007 631,653 741,646 185,264 338,357

Net cash used in investing activities �� (254,032) (1,201,358) (1,214,315) (154,782) (162,508)Net cash provided by (used in) financing

activities �� (1,415) 791,869 741,963 1,625 226Effect of exchange rate changes on cash

and cash equivalents �� 1,083 (3,775) 92,565 (12,841) 14,187

Net increase in cash and cashequivalents �� 233,643 218,389 361,859 19,266 190,262

Cash and cash equivalents at thebeginning of the year/period �� 1,000,953 1,234,596 1,452,985 1,452,985 1,814,844

Cash and cash equivalents at theend of the year/period �� 1,234,596 1,452,985 1,814,844 1,472,251 2,005,106

SUMMARY

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OUR SHAREHOLDING AND CORPORATE STRUCTURE

Our Major Shareholders and Relationship with Controlling Shareholders

As of September 30, 2021, Mr. Charles Chao, our chairman of the board of directors since ourinception, was interested in and controlled through SINA Corporation, a wholly ownedsubsidiary of Sina Group Holding Company Limited, which is a wholly owned subsidiary ofNew Wave MMXV Limited, a business company incorporated in the BVI and controlled by Mr.Charles Chao, 101,778,958 Class B ordinary shares of our Company. As of September 30,2021, Mr. Chao controlled approximately 70.6% of the aggregate voting rights in ourCompany. Immediately following the Global Offing, Mr. Charles Chao will controlapproximately 67.6% of the aggregate voting rights in our Company, assuming theshareholding in the Company which he controls through SINA Corporation has remainedunchanged since September 30, 2021 and will remain unchanged until SINA Corporation sellsthe Sale Shares, and without taking into account any sale of Shares upon the exercise of theOver-allotment Option.

For further details, please see “Major Shareholders” and “Relationship with our ControllingShareholders”.

Weighted Voting Rights Structure and WVR Beneficiary

Under our weighted voting rights structure, our share capital comprises Class A ordinary sharesand Class B ordinary shares. Each Class A ordinary share entitles the holder to exercise onevote and each Class B ordinary share entitles the holder to exercise three votes respectively,on all matters that require a shareholder’s vote.

We have applied for, and the Stock Exchange has granted us, a waiver from strict compliancewith Rule 19C.07(3) of the Hong Kong Listing Rules, which requires that the appointment,removal and remuneration of auditors must be approved by a majority of a listed company’smembers or other body that is independent of the listed company’s board of directors.

Furthermore, Rule 19C.07(7) of the Hong Kong Listing Rules requires that members holdinga minority shareholding in an issuer’s total number of issued shares must be able to requisitionan extraordinary general meeting and add resolutions to a meeting agenda. The minimum stakerequired to do so must not be higher than 10% of the voting rights, on a one vote per sharebasis, in the share capital of the issuer, while the minimum stake as currently set out in ourCompany’s Articles is at least two shareholders holding not less than one-third of the totalvoting rights in the paid up capital of our Company. Rule 19C.07(4) requires a general meetingto be held each year as the qualifying issuer’s annual general meeting.

We have applied for, and the Stock Exchange has granted us, a waiver from strict compliancewith Rule 19C.07(4) and 19C.07(7) of the Hong Kong Listing Rules, on the condition that wewill put forth resolutions at the First GM to revise the Articles, so that (i) the minimum stakerequired to convene an extraordinary general meeting and add resolutions to a meeting agendawill be one-tenth of the voting rights, on a one vote per share basis, in the share capital of theCompany; (ii) the quorum for a general meeting of the Company will be lowered from thecurrent one or more shareholders holding at least one-third of the aggregate voting power ofthe Company to one or more shareholders holding at least 10% of the aggregate voting powerof the Company; and (iii) we will hold an annual general meeting each year; and we haveobtained an irrevocable undertaking from our controlling shareholder prior to the date of thisdocument to be present and vote in favor of the proposed resolutions outlined above with aview to ensuring that there may be adequate quorum votes in favor of such resolutions. See“Waivers and Exemptions — Shareholder Protection Requirements” for further details.

SUMMARY

– 12 –

Moreover, our Company has obtained an undertaking from Alibaba that it will be present andvote in favor of the proposed resolutions outlined above at the First GM and the relevant classmeeting (if applicable), and if the proposed resolutions are not approved at the First GM andthe relevant class meeting, be present and vote in favor of such proposed resolutions at eachsubsequent general meeting and class meeting at which our Company puts forth such proposedresolutions until all proposed resolutions are approved.

Notwithstanding the above, the Company intends to hold the First GM on December 1, 2021to put forth the relevant resolutions for revising the Articles. In the case where the relevantamendments are approved and adopted at the First GM before the Listing, the above-mentionedwaiver as well as the voting undertakings will lapse automatically.

Our VIE Structure

The diagram below illustrates the general structure of the economic flow and control under ourVIE structure created by the contractual arrangements:

Our Company

VIE

shareholdersWeibo Technology

Weimeng and its subsidiaries/Weimeng Chuangke

Notes:

(1) “ ” denotes the direction of legal and beneficial ownership.

(2) “ ” denotes the contractual arrangements among the VIEs, VIE shareholders, and our subsidiaries.

Current PRC laws and regulations impose substantial restrictions on foreign ownership ofinternet information services and value-added telecommunication service businesses in China.Therefore, we conduct part of our businesses through a series of agreements between WeiboTechnology, our PRC subsidiary, Weimeng and Weimeng Chuangke, our consolidated affiliatedentities, and/or their respective shareholders. See “History and Corporate Structure —Corporate Structure — Contractual Arrangements” for a summary of the contractualarrangements entered into between Weibo Technology, our consolidated affiliated entitiesand/or their respective shareholders.

Additionally, we have been advised by our PRC Legal Adviser that there are substantialuncertainties regarding the interpretation and application of current and future PRC Laws.Accordingly, PRC regulatory authorities or courts may take a view that is contrary to theopinion of our PRC Legal Adviser. It is uncertain whether any new PRC laws relating tocontractual arrangements will be adopted, what the laws would provide. If we or any of theVIEs is found to be in violation of existing or future PRC laws, or fail to obtain or maintainany of the required permits or approvals, the relevant PRC regulatory authority would have

SUMMARY

– 13 –

broad discretion to take action in dealing with the violation or failure, in which case we couldbe subject to severe penalties, including being prohibited from continuing our operations orunwinding the contractual arrangements. See “Risk Factors — Risks Relating to Our CorporateStructure” and “Risk Factors — Risks Relating to Doing Business in the People’s Republic ofChina”.

RISK FACTORS

Our business and the Global Offering involve certain risks and uncertainties, some of which arebeyond our control and may affect your decision to invest in us and/or the value of yourinvestment. See “Risk Factors” for details of our risk factors, which we strongly urge you toread in full before making an investment in our Shares. Some of the major risks we faceinclude:

• If we fail to grow our active user base, or if user engagement on our platform declines,our business, financial condition and operating results may be materially and adverselyaffected.

• If our users and platform partners do not continue to contribute content or theircontributions are not valuable to other users, we may experience a decline in user trafficand user engagement.

• We rely on our partnership program with channel partners, which mainly includeapplication pre-install partners, programmatic buying partners and applicationmarketplaces, to drive traffic to our platform, and if our partnership program becomes lesseffective or if the smartphone market and shipment in China slow down compared to theprior years, traffic to our platform could decline and our business and operating resultscould be adversely affected.

• If we are unable to compete effectively for user traffic or user engagement, our businessand operating results may be materially and adversely affected.

• We may not be able to maintain or grow our revenues or our business.

• We generate a substantial majority of our revenues from online advertising and marketingservices. If we fail to generate sustainable revenue and profit through our advertising andmarketing services, our result of operations could be materially and adversely affected.

• If the PRC government finds that the agreements establishing the structure for operatingour businesses in China do not comply with PRC regulations on foreign investment ininternet and other related businesses, or if these regulations or their interpretation changein the future, we could be subject to severe penalties or be forced to relinquish ourinterests in those operations.

• Adverse changes in China’s or global economic and political policies could have amaterial and adverse effect on overall economic growth in China, which could materiallyand adversely affect our business.

• We are subject to changing laws and regulations regarding regulatory matters, corporategovernance and public disclosure that have increased both our costs and the risk ofnon-compliance.

SUMMARY

– 14 –

USE OF PROCEEDS

We estimate that we will receive net proceeds from the Global Offering of approximatelyHK$2,004.3 million after deducting estimated underwriting fees and the estimated offeringexpenses payable by us and based upon maximum Public Offer Price, HK$388.00 per OfferShare for both the Hong Kong Public Offering and the International Offering, and assumingthat the Over-allotment Option is not exercised. We plan to use the net proceeds we will receivefrom the Global Offering for the following purposes:

• approximately 45% (approximately HK$901.9 million) for continuing to grow our userbase and user engagement, and enhance our content ecosystem. We will nurture ourcontent ecosystem for users, customers and content creators, further develop innovativeproducts and features, expand our user reach by executing channel marketing strategiesand promotional activities.

• approximately 25% (approximately HK$501.1 million) for research and development toenhance our user experience and monetization capabilities. We plan to refine ourrecommendation engine to improve the relevance of information we push to users. Wewill continue to improve our proprietary hybrid cloud platform and further scale up ourIT infrastructure, including our video platform and live streaming system. We plan toresearch and develop technologies to improve user experience and to support theexpansion of our business. We also plan to recruit, train and retain more research anddevelopment talents for these purposes.

• approximately 20% (approximately HK$400.9 million) for selectively pursuing strategicalliances, investments and acquisitions. We plan to form strategic alliances andpartnerships and pursue investments and acquisitions in businesses that are synergisticand complementary to our ecosystem and to further diversify our monetization channels.As of the Latest Practicable Date, we have not identified any specific target of potentialmerger or acquisition.

• approximately 10% (approximately HK$200.4 million) for working capital and generalcorporate purposes.

See “Use of Proceeds” for further details.

THE LISTING

Our ADSs have been listed and traded on the Nasdaq since April 17, 2014. Dealings in ourADSs on the Nasdaq are conducted in U.S. dollars. We have applied for a listing of our ClassA ordinary shares on the Main Board under Chapter 19C (Secondary Listings of QualifyingIssuers) of the Hong Kong Listing Rules. Dealings in our Class A ordinary shares on the HongKong Stock Exchange will be conducted in Hong Kong dollars. Our Class A ordinary shareswill be traded on the Hong Kong Stock Exchange in board lots of 20 Shares. For additionalinformation, see “Information about This Document and the Global Offering.”

SUMMARY

– 15 –

As we are seeking a listing as a Grandfathered Greater China Issuer pursuant to Chapter 19Cof the Listing Rules with a WVR structure, certain shareholder protection measures andgovernance safeguards under Chapter 8A of the Hong Kong Listing Rules (Weighted VotingRights) do not apply to us pursuant to Rule 19C.12 and our Articles differ from Chapter 8A ina number of ways, including the following:

• Chapter 8A prohibits the increase in the proportion of shares with WVRs after the Listingand, where there is a reduction in the number of issued shares, requires shares with WVRsto be reduced proportionately. Our Articles do not contain such restrictions on the ClassB ordinary shares;

• Chapter 8A requires (a) amendments to a listed issuer’s constitutional documents, (b)variation of rights attached to any class of shares, (c) the appointment or removal of anindependent non-executive director, (d) the appointment or removal of auditors and (e)the voluntary winding-up of a listed issuer to be subject to shareholder approval on a onevote per share basis. Our Articles do not contain such provisions;

• we do not have a corporate governance committee. Therefore, there is not a charter thatcontains the terms otherwise required under Rule 8A.30 and Code Provision D.3.1 ofAppendix 14 to the Hong Kong Listing Rules. For more details of the charter of ourcorporate governance committee, please see “Directors and Senior Management — BoardPractices”; and

• the independent non-executive directors of a listed issuer with a WVR structure must besubject to retirement by rotation at least once every three years under Chapter 8A,whereas our Articles do not provide for a term of office for our directors.

• the WVR beneficiary’s voting rights must cease if the beneficiary is deceased, no longera member of the board, or deemed by the Hong Kong Stock Exchange to no longer meetthe requirements of or be incapacitated for the purpose of performing his duties as adirector. Notwithstanding the foregoing, the existing Articles stipulate that, if at any timeSINA and its affiliates in aggregate hold less than 5% of the issued Class B ordinaryshares in our capital, the WVR beneficiaries’ weighted voting rights will cease.Furthermore, we will make certain changes to the Articles at the First GM to the effectthat, if the Class B ordinary shares are no longer under the control of the existing WVRbeneficiaries or their affiliates, all of the relevant Class B ordinary shares held by it shallbe automatically converted into Class A ordinary shares. For further details, see thesection headed “Waivers and Exemptions — Shareholder Protection Requirements —Other Proposed Amendments to the Articles”.

Prospective investors are advised to be aware of the potential risks of investing in companieswith a WVR structure, in particular that the interests of the WVR beneficiaries may notnecessarily always be aligned with those of our Shareholders as a whole, and that the WVRbeneficiaries will be in a position to exercise their higher voting power to influence the affairsof our Company and the outcome of shareholders’ resolutions, irrespective of how othershareholders vote. Prospective investors should make the decision to invest in the Companyonly after due and careful consideration. For further information about the risks associated withthe WVR structure adopted by the Company, please refer to “Risk Factors — Risks Related toOur Corporate Structure.”

As a result, our Articles provide less shareholder protection and have fewer governancesafeguards than if our Company were subject to Chapter 8A in its entirety.

SUMMARY

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WAIVERS AND EXEMPTIONS

As we are applying for listing under Chapter 19C of the Hong Kong Listing Rules, we will notbe subject to certain provisions of the Hong Kong Listing Rules, including, among others, ruleson notifiable transactions, connected transactions, share option schemes, content of financialstatements as well as certain other continuing obligations. In addition, in connection with theListing, we have applied for a number of waivers and/or exemptions from strict compliancewith the Hong Kong Listing Rules, the Companies (Winding Up and Miscellaneous Provisions)Ordinance and the SFO and a ruling under the Takeovers Codes. We have applied for, and theHong Kong Stock Exchange has granted, a waiver from strict compliance with therequirements in Paragraph 3(b) of Practice Note 15 to the Hong Kong Listing Rules such thatwe are able to spin-off one or more of our businesses within three years of the Listing. Foradditional information, see “Waivers and Exemptions” of this document.

We enjoy exemptions from certain obligations under U.S. securities laws and Nasdaq rules asa foreign private issuer as defined under the U.S. Exchange Act. Investors should exercise carewhen investing in our Shares and/or ADSs. See “Information about this Document and theGlobal Offering — Summary of Exemptions as a Foreign Private Issuer in the U.S.”

OFFERING STATISTICS

Based on the indicativeoffer price per Offer Shareof HK$388.00 for both the

Hong Kong Public Offeringand International Offering

Our market capitalization(1) �� HK$91,022 millionUnaudited pro forma adjusted net tangible assets

per Share(2)�� USD13.03 or HK$101.51

Notes:

(1) The calculation of market capitalization is based on 234,591,789 Shares that will be in issue immediatelyfollowing the Global Offering, excluding 8,700,524 Class A ordinary shares issued and reserved for futureissuance upon the exercising or vesting of awards granted under our Share Incentive Plans and any conversionof Class B ordinary shares into Class A ordinary shares upon exercise of the Over-allotment Option.

(2) The unaudited pro forma adjusted net tangible assets per Share is based on a total of 233,781,368 Shares thatwill be in issue assuming that the Global Offering have been completed on June 30, 2021, excluding11,674,008 Class A ordinary shares issued and reserved for future issuance upon the exercising or vesting ofawards granted under our Share Incentive Plans, any conversion of Class B ordinary shares into Class Aordinary shares upon exercise of the Over-allotment Option, and any issuance or repurchase of Shares and/orADSs by the Company.

DETERMINATION OF OFFER PRICE

We expect to determine the pricing of the Offer Shares by agreement with the JointRepresentatives (for themselves and on behalf of the Underwriters) on or about Thursday,December 2, 2021 and, in any event, not later than Friday, December 3, 2021. The Public OfferPrice will be not more than HK$388.00 per Offer Share, unless otherwise announced.

SUMMARY

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We will determine the Public Offer Price by reference to, among other factors, the closing priceof our ADSs on Nasdaq on the last trading day on or before the Price Determination Date, andthe Public Offer Price will not be more than HK$388.00 per Hong Kong Offer Share.

We may set the International Offer Price at a level higher than the maximum Public Offer Priceif, (a) the Hong Kong dollar equivalent of the closing trading price of the ADSs on Nasdaq onthe last trading day on or before the Price Determination Date were to exceed the maximumPublic Offer Price as stated in this document; and/or (b) we believe that it is in the best interestsof our Company as a listed company to set the International Offer Price at a level higher thanthe maximum Public Offer Price based on the level of interest expressed by professional andinstitutional investors during the bookbuilding process.

If the International Offer Price is set at or lower than the maximum Public Offer Price, thePublic Offer Price must be set at such price that is equal to the International Offer Price. Underno circumstance will we set the Public Offer Price above the maximum Public Offer Price asstated in this document or the International Offer Price.

LISTING EXPENSES

We expect to incur listing expenses of approximately HK$129.7 million, accounting for 6.08%of gross proceeds, after June 30, 2021, including underwriting-related expenses ofapproximately HK$27.1 million, and non-underwriting related expenses of approximatelyHK$102.6 million which consist of fees and expenses for legal advisors and accountants ofapproximately HK$68.1 million and other fees and expenses of approximately HK$34.5million (assuming that the Global Offering is conducted at the indicative offer price per OfferShare of HK$388.00 for both Hong Kong Public Offering and International Offering and theOver-allotment Option is not exercised). We expect approximately HK$121.8 million of thelisting expenses will be recorded as a deduction in equity directly and approximately HK$7.9million of the listing expenses will be charged to the profit or loss of our Company. The SellingShareholder pays the underwriting fees, the Hong Kong Stock Exchange trading fee, SFCtransaction levy and SEC registration fee corresponding to the Sale Shares, and we bear otherlisting expenses.

DIVIDEND POLICY

Our board of directors has complete discretion on whether to distribute dividends, subject toapplicable laws. Even if our board of directors decides to pay dividends, the form, frequencyand amount will depend upon our future operations and earnings, capital requirements andsurplus, general financial condition, contractual restrictions and other factors that the board ofdirectors may deem relevant.

We have not previously declared or paid cash dividends and we have no plan to declare or payany dividends in the near future on our shares or ADSs. We currently intend to retain most, ifnot all, of our available funds and any future earnings to fund the development and growth ofour business. See “Financial Information — Dividend Policy.”

SUMMARY

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NO MATERIAL ADVERSE CHANGE

Our directors confirm that, as of the date of this document, there has been no material adversechange in our financial or trading position since June 30, 2021 (being the date on which thelatest audited consolidated financial information of our Group was prepared) and there hasbeen no event since June 30, 2021 which would materially affect the information shown in ourconsolidated financial statements included in the Accountant’s Report in Appendix IA to thisdocument.

IMPACT OF COVID-19 AND RECENT DEVELOPMENT

The COVID-19 pandemic has had, and, together with any subsequent outbreaks driven by newvariants of COVID-19, may continue to have, a significant impact on our operations andfinancial results. The outbreak of COVID-19 has caused our advertising and marketingcustomers to reduce their advertising budgets, which has affected our advertising revenues andfinancial performance in the year of 2020, particularly in its first half. The COVID-19pandemic has caused negative impact to our total revenues, slower collection of accountsreceivables, and additional allowance for credit losses. Our advertising business has beengradually recovering, underpinned by improved advertiser sentiment, following the effectivecontrol of the domestic outbreaks and work resumption. In China, business activities havelargely resumed, governmental emergency measures have been significantly relaxed, and thegeneral economy is gradually recovering. Recently, there has been an increasing number ofCOVID-19 cases, including the COVID-19 Delta variant cases, in multiple cities in China. TheChinese local authorities have reinstated certain measures to keep COVID-19 in check,including travel restrictions and stay-at-home orders, and we may have to adjust variousaspects of our operations. In addition, the highly-transmissible Delta variant of COVID-19 hascaused authorities in various countries to reimpose restrictions such as mask mandates, curfewsand prohibitions on large gatherings. There remain significant uncertainties surroundingCOVID-19, including the existing and new variants of COVID-19, and its further developmentas a global pandemic, including the effectiveness of vaccine programs against existing and anynew variants of COVID-19, and their impacts on our customers’ advertising budget andspending more broadly. The extent of any business disruption and the related impact on ourfinancial results and outlook cannot be reasonably estimated at this time. See also “RiskFactors — Risks Relating to Our Business — We face risks related to health epidemics andother outbreaks, such as the outbreak of COVID-19, as well as natural disasters, which couldsignificantly disrupt our operations and adversely affect our business, financial condition orresults of operation.”

SUMMARY

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Financial Results for the Nine Months Ended September 30, 2021

The following table sets forth a summary of our consolidated results of operations for theperiods presented. This information should be read together with our unaudited interimcondensed consolidated financial statements included in Appendix IB to this document. Theresults of operations in any period are not necessarily indicative of our future trends.

For the Nine MonthsEnded September 30,

2020 2021

(In US$ thousands, except forper share and per ADS data)

(Unaudited) (Unaudited)

Interim Condensed Consolidated Statements ofOperations Data:

Revenues:Advertising and marketing revenues:

Third parties �� 852,263 1,198,168Alibaba(1)�� 112,906 134,892SINA �� 34,149 58,178Other related parties �� 33,360 38,731

Subtotal �� 1,032,678 1,429,969Value-added services revenues�� 143,843 210,827

Total revenues�� 1,176,521 1,640,796

Costs and expenses:Cost of revenues(2) �� 214,892 275,296Sales and marketing(2) �� 316,483 439,207Product development(2) �� 233,881 316,806General and administrative(2)�� 86,111 94,597

Total costs and expenses �� 851,367 1,125,906

Income from operations �� 325,154 514,890Income from equity method investments �� 4,422 17,688Realized gain from investments �� 848 1,299Fair value changes through earnings on investments,

net�� 127,641 (33,073)Investment related impairment(3) �� (117,835) (102,594)Interest income �� 65,667 56,909Interest expense �� (39,677) (53,255)Other income, net �� 3,889 3,147

Income before income tax expenses �� 370,109 405,011Less: Provision of income taxes �� 86,630 93,260

Net income �� 283,479 311,751Less: Net loss attributable to

non-controlling interests �� (843) (835)

Net income attributable to Weibo’s shareholders �� 284,322 312,586

SUMMARY

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For the Nine MonthsEnded September 30,

2020 2021

(In US$ thousands, except forper share and per ADS data)


Shares used in computing net income per shareattributable to Weibo’s shareholders:Basic �� 226,728 228,185Diluted �� 227,352 229,765

Income per ordinary share:Basic �� 1.25 1.37Diluted �� 1.25 1.36

Income per ADS(4):Basic �� 1.25 1.37Diluted �� 1.25 1.36

Notes:

(1) We recorded US$92.5 million and US$94.1 million in advertising and marketing revenues from Alibaba for thenine months ended September 30, 2020 and 2021, respectively. Moreover, one of Alibaba’s subsidiariesengaged in the business of advertising agency and contributed another US$20.4 million and US$40.8 millionto our total revenues for the nine months ended September 30, 2020 and 2021, respectively.

For the Nine Months EndedSeptember 30,

2020 2021

(in US$ thousands)


(2) Stock-based compensation in each category:Cost of revenues � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 3,909 5,690Sales and marketing� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 6,886 10,249Product development � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 22,890 29,260General and administrative � � � � � � � � � � � � � � � � � � � � � � � � � � � � 14,100 16,059

Total � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 47,785 61,258

(3) Investment related impairment includes impairment charges to equity investments, investment prepaymentsand loans to and interest receivable from related parties.


SUMMARY

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Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30,2020

Net Revenues

Our revenues increased by 39% from US$1,176.5 million in the nine months ended September30, 2020 to US$1,640.8 million in the nine months ended September 30, 2021.

• Advertising and marketing revenues. Advertising and marketing revenues increased by38% from US$1,032.7 million in the nine months ended September 30, 2020 toUS$1,430.0 million in the nine months ended September 30, 2021. Mobile advertisingrevenues accounted for approximately 93% of our total advertising and marketingrevenues in the nine months ended September 30, 2021, compared to 90% in the ninemonths ended September 30, 2020, benefiting from the growth of advertiser preferences.The total number of advertisers was 0.8 million in the nine months ended September 30,2021, compared to 1.4 million in the nine months ended September 30, 2020, while theaverage spending per advertiser (excluding Alibaba) increased by 152% from US$649 inthe nine months ended September 30, 2020 to US$1,637 in the nine months endedSeptember 30, 2021, both of which were primarily due to the churn of individualcustomers with relatively lower advertising budgets.

Revenues from advertising customers (excluding Alibaba) increased by 42% fromUS$940.2 million in the nine months ended September 30, 2020 to US$1,335.9 millionin the nine months ended September 30, 2021, primarily attributable to a broad-basedincrease in advertising demand and strong sales execution. Revenues generated fromAlibaba as an advertiser increased by 2% from US$92.5 million in the nine months endedSeptember 30, 2020 to US$94.1 million in the nine months ended September 30, 2021.The advertising spending from Alibaba highly correlates to its own business operation,especially its marketing strategies, which fluctuates from time to time.

• Value-added services revenues. Value-added services revenues increased by 47% fromUS$143.8 million in the nine months ended September 30, 2020 to US$210.8 million inthe nine months ended September 30, 2021. The increase primarily attributable to theincrease of game-related revenues from US$0.9 million for the nine months endedSeptember 30, 2020 to US$78.1 million for the nine months ended September 30, 2021,contributed by the interactive entertainment company acquired in the fourth quarter of2020 and incremental revenues from online game services, partially offset by the decreaseof revenue from live streaming business from US$30.7 million to US$11.9 million as aresult of intense market competitions.

Costs and Expenses

Our costs and expenses increased by 32% from US$851.4 million in the nine months endedSeptember 30, 2020 to US$1,125.9 million in the nine months ended September 30, 2021.

• Cost of Revenues. Cost of revenues increased by 28% from US$214.9 million in the ninemonths ended September 30, 2020 to US$275.3 million in the nine months endedSeptember 30, 2021. The increase was primarily due to an increase of US$22.4 millionin labor cost, an increase of US$11.4 million in advertisement production cost, anincrease of US$6.6 million in revenue share cost, an increase of US$6.6 million inturnover taxes, and an increase of US$6.2 million in content cost.

SUMMARY

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• Sales and Marketing. Our sales and marketing expenses increased by 39% from US$316.5million in the nine months ended September 30, 2020 to US$439.2 million in the ninemonths ended September 30, 2021. The increase was primarily due to an increase ofUS$82.7 million in marketing spend and promotional activities, and an increase ofUS$34.0 million in personnel-related expenses.

• Product Development. Our product development expenses increased by 35% fromUS$233.9 million in the nine months ended September 30, 2020 to US$316.8 million inthe nine months ended September 30, 2021. The increase was primarily attributable to anincrease of US$54.9 million in personnel-related expenses, an increase of US$6.4 millionin stock-based compensation, and an increase of US$13.4 million in amortization ofintangible assets.

• General and Administrative. Our general and administrative expenses increased by 10%from US$86.1 million in the nine months ended September 30, 2020 to US$94.6 millionin the nine months ended September 30, 2021. The increase was primarily due to theincrease of US$35.8 million in personnel-related expenses and an increase of US$6.5million in professional services fees. The increase was partially offset by a decrease ofUS$39.7 million in provision of allowance for credit losses.

Investment Related Impairment

We perform impairment assessments of our investments and determine if an investment isimpaired due to changes in quoted market price or other impairment indicators. We recordedUS$117.8 million and US$102.6 million in investment related impairment charges in the ninemonths ended September 30, 2020 and 2021, respectively, as the investments were notperforming to expectations or they became incapable of making repayments.

Interest Income and Interest Expense

Compared to the interest expense for the nine months ended September 30, 2020, the increasein interest expense for the nine months ended September 30, 2021 was mainly due to the 2030Notes issued in July 2020.

Provision of Income Taxes

The following table sets forth current and deferred portion of income tax expenses of theCompany and the effective tax rate for China operations:

For the Nine Months Ended September 30,

2020 2021

(in US$ thousands except percentage)(unaudited) (unaudited)

Deferred tax provisions (benefits) �� 11,682 (11,546)Current income tax expenses �� 74,948 104,806

Income tax expenses �� 86,630 93,260

SUMMARY

– 23 –

For the Nine Months Ended September 30,

2020 2021

(in US$ thousands except percentage)(unaudited) (unaudited)

Income tax expenses (benefits) applicable to non-Chinaoperations �� 12,358 (9,757)

Income tax expenses applicable to China operations �� 74,272 103,017Income from China operation �� 305,630 603,409Effective tax rate for China operations �� 24.3% 17.1%

We recorded income taxes of US$86.6 million and US$93.3 million in the nine months endedSeptember 30, 2020 and 2021, respectively. The provision for income taxes for Chinaoperations differs from the amounts computed by applying the statutory EIT rate mostly dueto the preferential tax treatment that Weibo Technology enjoyed as a qualified “high and newtechnology enterprise” during the periods presented.

Cash Flow Data


For the Nine Months EndedSeptember 30,

2020 2021

(in US$ thousands exceptpercentage)

(unaudited) (unaudited)

Net cash provided by operating activities �� 420,495 564,352Net cash used in investing activities �� (1,240,855) (567,860)Net cash provided by financing activities �� 741,963 1,214Effect of exchange rate changes on cash and

cash equivalents �� 37,341 16,141

Net increase (decrease) in cash and cash equivalents �� (41,056) 13,847Cash and cash equivalents at the beginning of the

year/period �� 1,452,985 1,814,844

Cash and cash equivalents at the end of the period�� 1,411,929 1,828,691

As of December 31, 2020, and September 30, 2021, our total cash, cash equivalents andshort-term investments were US$3,496.9 million and US$2,707.2 million, respectively. Ourprincipal sources of liquidity have been net proceeds from cash from operations and issuanceof unsecured senior notes.

Net cash provided by operating activities for the nine months ended September 30, 2021 wasUS$564.4 million, which consists of our net income of US$311.8 million as adjusted fornon-cash items and the effects of changes in operating assets and liabilities. Adjustments fornon-cash items primarily include a non-cash investment related impairment of US$102.6million, a charge of US$61.3 million in stock-based compensation, a charge of US$40.2million in depreciation and amortization and a net loss of US$33.1 million in fair value changes

SUMMARY

– 24 –

through earnings on investments. The principal items accounting for the changes in operatingassets and liabilities include an increase of US$190.3 million in accrued and other liabilities,a decrease of US$38.7 million in amount due from Alibaba, and an increase of US$24.3 millionin accounts payable, partially offset by an increase of US$241.3 million in accounts receivabledue from third parties.

Net cash used in investing activities for the nine months ended September 30, 2021 wasUS$567.9 million. This was primarily attributable to cash paid on long-term investments ofUS$1,471.3 million, purchases of bank time deposits and wealth management products ofUS$560.2 million, prepayment for purchase of SINA Plaza of US$132.5 million, net cash paidfor acquisitions of US$61.2 million, partially offset by maturities of bank time deposits andwealth management products of US$1,371.9 million, proceeds from the disposal and refund ofprepayment on long-term investments of US$242.6 million, and net repayment of loan bySINA of US$66.4 million.

Net cash provided by financing activities for the nine months ended September 30, 2021 wasUS$1.2 million, which consists of proceeds from the exercise of employee stock options.

Capital Expenditures

Our capital expenditures primarily consist of purchases of servers, computers and other officeequipment. Our capital expenditures were US$23.8 million for the nine months endedSeptember 30, 2021. We will continue to make capital expenditures for the future growth of ourbusiness and we intend to fund these purchases in the future with existing cash balance.

Key Operating Metrics

Our MAUs increased from 511 million in September 2020 to 573 million in September 2021.Mobile MAUs represented 94% of MAUs. Our average DAUs increased from 224 million inSeptember 2020 to 248 million in September 2021. The ratio of average DAUs to MAUs inSeptember 2021 remained stable at 43%.

RECENT REGULATORY DEVELOPMENTS

Cybersecurity

On July 30, 2021, the State Council promulgated the Regulations on Security Protection ofCritical Information Infrastructure (《關鍵信息基礎設施安全保護條例》), effective onSeptember 1, 2021, which provides that a “critical information infrastructure” has the meaningof an important network facility and information system in important industries such as, amongothers, public communications and information services, as well as other important networkfacilities and information systems that may seriously endanger national security, the nationaleconomy, the people’s livelihood, or the public interests in the event of damage, loss offunction, or data leakage. The competent governmental departments and supervision andmanagement departments of the aforementioned important industries will be responsible fororganizing the identification of critical information infrastructures in their respectiveindustries.

SUMMARY

– 25 –

On July 10, 2021, the CAC published a discussion draft of the amended Measures forCybersecurity Review (《網絡安全審查辦法(修訂草案徵求意見稿)》), which provides thatcertain operators of critical information infrastructure purchasing network products andservices, and data processors (together with the operators of critical information infrastructure,the “Operators”) carrying out data processing activities, which affect or may affect nationalsecurity, or Operators holding over one million users’ personal information when listing abroad(國外上市), must apply with the Cybersecurity Review Office for a cybersecurity review. Fordetails, see “Regulatory Overview — Regulations on Information Security.” As a majorinternet platform, we are at risk of being deemed to be an Operator, which, however, is subjectto significant uncertainties as explained below.

• Under the current PRC cybersecurity laws and the draft of the amended Measures forCybersecurity Review, operators of “critical information infrastructure” that intend topurchase internet products and services that will or may affect national security mustapply for a cybersecurity review. However, as advised by our PRC Legal Adviser,although several PRC laws and regulations have provided the definition of “criticalinformation infrastructure,” the scope of potential operators of “critical informationinfrastructure” remains broad and unclear and the identification of any specific criticalinformation infrastructure is subject to industry-specific identification rules promulgatedby relevant regulators and the notice from the relevant regulators, pursuant to theRegulations on Security Protection of Critical Information Infrastructure. In addition, thedefinition and scope of activities of data processing that will or may affect nationalsecurity is similarly unclear and subject to the regulatory interpretation.

• Although the internet products and services we purchase are primarily bandwidth,copyright content and marketing services, we may be subject to cybersecurity reviewwhen purchasing them in the future. As of the date of this document, we have not beeninvolved in any investigations or cybersecurity reviews by the CAC for making thosepurchases of internet products and services, and we have not received any inquiry, notice,warning, or sanction in such respect.

An Operator could be required to fulfill various obligations, including setting up a specialsecurity management organization, organizing regular cybersecurity education and training,formulating emergency plans for cybersecurity incidents and conducting regular emergencydrills, and we have already performed the aforementioned measures. As a major internetplatform, we are at risk of being deemed to be an operator of “critical informationinfrastructure” and a data processor meeting the above criteria under PRC cybersecurity laws.In such case, we would be required to fulfill various obligations as required under PRCcybersecurity laws and other applicable laws specifically for operators of “critical informationinfrastructure” and a cybersecurity review for our activities would be required, which maydisrupt our operations and adversely affect our business, results of operations and financialcondition. We have not fulfilled obligations that are only applicable and available if beingrecognized as an operator of “critical information infrastructure” such as conducting networksecurity inspections and risk assessments on critical information infrastructure at least once ayear either through self-assessment or through a cybersecurity service agency, timelycorrecting any security issues discovered, and reporting relevant matters as required by thesecurity protection departments. As we have not been notified that we are recognized as anoperator of critical information infrastructure by any PRC regulatory authority as of the dateof this document, these obligations are currently not applicable to us. In addition, we have notbeen involved in any investigations or cybersecurity reviews by the CAC as an operator of“critical information infrastructure” during the Track Record Period and up to the date of this

SUMMARY

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document, and we have not received any inquiry, notice, warning or sanction in such respect.Additional compliance efforts could disrupt our operations and adversely affect our business,results of operations and financial condition.

As there is no timetable as when this discussion draft of the amended Measures forCybersecurity Review will be enacted, substantial uncertainties exist with respect to itsenactment timetable, final content, interpretation and implementation. See “Risk Factors –Substantial uncertainties exist with respect to the interpretation and implementation ofcybersecurity related regulations and cybersecurity review as well as any impact these mayhave on our business operations.”

On November 14, 2021, the CAC published a discussion draft of the Administrative Measuresfor Internet Data Security (《網絡數據安全管理條例(徵求意見稿)》), or the Draft Measuresfor Internet Data Security, which requires a data processor to apply for cybersecurity review,among others, in the event of its listing in Hong Kong which affects or may affect nationalsecurity. As of the date of this document, this draft has not been formally adopted. Our PRCLegal Adviser is of the view that substantial uncertainties exist with respect to the enactmenttimetable, final content, interpretation and implementation, especially the detailedinterpretation of the standard for determining whether a listing in Hong Kong “affects or mayaffect national security”. And the Joint Sponsors’ PRC legal adviser concurs with theaforementioned view of the Company’s PRC Legal Adviser. If the Draft Measures for InternetData Security is enacted as proposed, in the event that any of our capital raising activities isrequired to apply for cybersecurity review, we will need to obtain approval or clearance fromthe regulatory authorities, which is subject to uncertainties. See “Risk Factors – Substantialuncertainties exist with respect to the interpretation and implementation of cybersecurityrelated regulations and cybersecurity review as well as any impact these may have on ourbusiness operations.”

However, as advised by our PRC Legal Adviser, we are of the view that, the Draft Measuresfor Internet Data Security will not have any immediate material impact on the proposedListing, on the following basis (i) this is a draft regulation for comment and not currently ineffect, (ii) this draft does not contain retrospective provisions that would have a materialimpact on the proposed Listing, and (iii) as of the date of this document, we have not beeninvolved in review or investigation by the CAC with respect to the Draft Measures for InternetData Security. As we have implemented data and technology system risk management tocomply with data security and data protection requirements, see “Business — RiskManagement and Internal Control — Data and technology system risk management,” wecurrently do not foresee any material impediments for us to gradually take measures under theguidance of the relevant regulators to prepare ourselves for compliance with the regulations inall material respects, once promulgated.

The Joint Sponsors have (i) discussed with the Company’s management on the Company’scybersecurity measures and the potential impact of the Draft Measures for Internet DataSecurity on the Group’s business; and (ii) discussed with the Company’s PRC legal advisersand the Joint Sponsors’ PRC legal advisers on the legal status and implications of the DraftMeasures for Internet Data Security in relation to the Company’s proposed Listing in HongKong. Based on the foregoing and as advised by the Company’s PRC Legal Adviser and theJoint Sponsors’ PRC legal adviser, and taking into account the substantial uncertainties withrespect to the enactment timetable, final content, interpretation and implementation discussedabove, nothing has come to the attention of the Joint Sponsors as non-legal experts that wouldlead them to cast doubt on the views of the Company and the PRC Legal Advisers as set outabove.

SUMMARY

– 27 –

Anti-monopoly and competition

On August 17, 2021, the State Administration for Market Regulation issued a discussion draftof Provisions on the Prohibition of Unfair Competition on the Internet (《禁止網絡不正當競爭行為規定(公開徵求意見稿)》), under which business operators should not use data oralgorithms to hijack traffic or influence users’ choices, or use technical means to illegallycapture or use other business operators’ data. Furthermore, business operators are not allowedto (i) fabricate or spread misleading information to damage the reputation of competitors, or(ii) employ marketing practices such as fake reviews or use coupons or “red envelopes” toentice positive ratings.

On September 11, 2020, the Anti-Monopoly Commission of the State Council issuedAnti-Monopoly Compliance Guideline for Operators (《經營者反壟斷合規指南》), whichrequires operators to establish anti-monopoly compliance management systems under the PRCAnti-Monopoly Law to manage anti-monopoly compliance risks. On February 7, 2021, theAnti-Monopoly Commission of the State Council published Anti-Monopoly Guidelines for theInternet Platform Economy Sector (《國務院反壟斷委員會關於平台經濟領域的反壟斷指南》)that specified circumstances where an activity of an internet platform will be identified asmonopolistic act as well as concentration filing procedures for business operators, includingthose involving variable interest entities. In August 2021, the SAMR issued two investigationnotices to Weimeng Chuangke regarding alleged illegal concentration of business operatorsunder the Anti-Monopoly Law, among which, one resulted in a fine of RMB500,000 forconcentration of business operators without prior filing pursuant to the Anti-Monopoly Law(中華人民共和國反壟斷法) and the other one is still under investigation as of the date of thisdocument. Weimeng Chuangke is actively cooperating with the SAMR on such investigation.We are not able to predict the status or the results of the investigation at this stage. Accordingto the PRC Anti-Monopoly Law (中華人民共和國反壟斷法), if a business operator carries outa concentration in violation of the law, the relevant authority shall order the business operatorto terminate the concentration, dispose of the shares or assets or transfer the business withina specified time limit, or take other measures to restore the pre-concentration status, andimpose a fine of up to RMB500,000. As such, our PRC legal adviser is of the view that wecould be subject to fines of up to RMB500,000 and other legal actions by the SAMR for suchconcentration.

On October 23, 2021, the Standing Committee of the National People’s Congress issued adiscussion draft of the amended Anti-Monopoly Law, which proposes to increase the fines forillegal concentration of business operators. The draft also proposes that the relevant authorityshall investigate a transaction where there is any evidence that the concentration has or mayhave the effect of eliminating or restricting competitions, even if such concentration does notreach the filing threshold. We are of the view that the strengthened enforcement of theAnti-Monopoly Law could result in investigations on our acquisition transactions conducted inthe past and make our acquisition transactions in the future more difficult due to the prior filingrequirement. See “Risk Factors — Any failure or perceived failure by us to comply with theAnti-Monopoly Guidelines for Internet Platforms Economy Sector and other PRC anti-monopoly laws and regulations may result in governmental investigations or enforcementactions, litigation or claims against us and could have an adverse effect on our business,financial condition and results of operations.”

Algorithm recommendation

On August 27, 2021, the CAC issued a discussion draft of Administrative Provisions onAlgorithm Recommendation of Internet Information Services (《互聯網信息服務算法推薦管理規定(徵求意見稿)》), which, among others, requires algorithm recommendation service

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providers to publicly disclose the basic principles, purposes, intention, and operatingmechanism of their algorithm-related products. If this draft is enacted as proposed, we mayneed to further adjust our business and operations. We have publicly disclosed the operationmechanism for “Weibo hot search” in the Weibo Hot Search Management Rules, which areposted as a Weibo community announcement. We have also provided an option for our usersto adjust the algorithm-driven recommendations settings for content and advertisements. A usercan click to deactivate “personalized ads recommendation” function to lower the relevancy ofthe ads pushed to this user, and to deactivate “personalized content recommendation” functionto lower relevancy of the content recommended to this user. We have been advised by our PRCLegal Adviser that our current approaches are in compliance with effective laws andregulations for algorithm recommendation in all material aspects as of the date of thisdocument, however, since this draft has not been enacted as of the date of this document, thepotential impact on our business operations is still substantially uncertain and the PRCregulatory authorities could take a contrary view over our current efforts as described above.During the Track Record Period, we generated approximately 55% to 65% of our advertisingand marketing revenues from the provision of promoted marketing products, which however,included advertisements that are not targeting advertising using algorithm recommendationengine and reach users universally. Furthermore, multiple factors, such as the content quality,product strategy, and algorithm technology, are inextricably intertwined in contributing to therevenue of our advertisement products, among which attribution from algorithmrecommendation is only one factor. If the draft is enacted as proposed, the impact on our SIGrecommendation engine still depends largely on the number of users who actually turn off ouralgorithm recommendation services. If such opt-out ratio turns out to be on the high end, theadvertisement efficiency on our platform may ultimately be lowered and our businessoperations may be adversely affected.

On September 17, 2021, the CAC, together with eight other governmental authorities, jointlyissued the Guidelines on Strengthening the Comprehensive Regulation of Algorithm forInternet Information Services (關於加強互聯網信息服務算法綜合治理的指導意見), whichprovides that daily monitoring of data use, application scenarios and effects of algorithms shallbe carried out by the relevant regulators, and security assessments of algorithm shall beconducted by the relevant regulators. The guidelines also provide that an algorithm filingsystem shall be established and classified security management of algorithms shall bepromoted. The Company will closely monitor the regulatory development and adjust itsbusiness operation from time to time to comply with the regulations over algorithm.

Others

On August 30, 2021, the NPPA issued the Notice on Further Strict Management to PreventMinors from Indulging in Online Games (《關於進一步嚴格管理切實防止未成年人沉迷網絡遊戲的通知》), which requires all online game operators to provide services to minors only onany Friday, Saturday, Sunday and statutory holidays from 8:00 p.m. to 9:00 p.m., i.e. for onehour, and not to provide online games in any form to users who have not registered or loggedin with their real names. In addition to the real-name registration system already in place, wehave adjusted the systems in the games operated by us to comply with the requirements underthis notice. The revenue contributed by online games accounted for an insignificant portion ofour total revenue during the Track Record Period. We are of the view that this notice will nothave a material adverse impact on our business operation or financial results.

The Cyberspace Administration of China launched a “Fan Group Chaos Rectification” specialaction on June 15, 2021, followed by the issuance of the Notice on Further Strengthening theManagement of Chaos in Fan Groups (《關於進一步加強“飯圈”亂象治理的通知》) on August25, 2021. Both of the special action and notice are intended to rectify chaos in online fan

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groups for celebrities, specifically, in features such as celebrity rankings, hot topics, fancommunities, and fans interactive functions, so as to curb verbal abuse, stigmatization,instigation, confrontation, insults, slander, rumors, malicious marketing and the spread of otherharmful information. This notice requested, among other things, the cancellation of allrankings of celebrities. The rankings of music, film and television works are still allowed, butthe network platforms should optimize and adjust ranking rules to focus on the art worksthemselves and professional evaluation. Furthermore, minors are not allowed to make virtualgifting or spending money on supporting idols, or act as the organizer or manager of a fangroup. As of the Latest Practicable Date, we have taken measures specified in this notice to theextent applicable to our business, including removing the function of star power list on ourplatform.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of thePeople’s Republic of China (《中華人民共和國個人信息保護法》) (the “Personal InformationProtection Law”), effective from November 1, 2021. The Personal Information Protection Lawrequires, among others, that (i) the processing of personal information should have a clear andreasonable purpose which should be directly related to the processing purpose, in a method thathas the least impact on personal rights and interests, and (ii) the collection of personalinformation should be limited to the minimum scope necessary to achieve the processingpurpose to avoid the excessive collection of personal information. Different types of personalinformation and personal information processing will be subject to various rules on consent,transfer, and security. Entities handling personal information shall bear responsibilities fortheir personal information handling activities, and adopt necessary measures to safeguard thesecurity of the personal information they handle. Otherwise, the entities handling personalinformation could be ordered to correct, or suspend or terminate the provision of services, andface confiscation of illegal income, fines or other penalties. As of the date of this document,we were not involved in any enquiry, review or investigations by the CAC or other regulatoryauthorities in respect of the Personal Information Protection Law. However, we have beenadvised by our PRC Legal Adviser that this law is relatively new, and therefore there aresubstantial uncertainties with respect to its interpretation and implementation. See “RiskFactors — Privacy concerns relating to our products and services and the use of userinformation could damage our reputation, deter current and potential users and customers fromusing Weibo and negatively impact our business.”

On July 6, 2021, the General Office of the Central Committee of the Communist Party of Chinaand the General Office of the State Council jointly issued the Opinions on Strictly CombatingIllegal Securities Activities (《關於依法從嚴打擊證券違法活動的意見》), which emphasizeon the prevention of illegal securities activities and tightened supervision over overseas listingsby China-based companies. The opinions aim to achieve this by establishing a regulatorysystem and revising the existing rules for overseas listings by Chinese entities and affiliates,including potential extraterritorial application of China’s securities laws. As the opinions arenew, official guidance and implementation rules have not been issued and the finalinterpretation of and potential impact from these opinions remain unclear at this stage. See“Risk Factors — The approval of the CSRC or other PRC government authorities may berequired in connection with this offering under PRC law, and, if required, we cannot predictwhether we will be able to obtain such approval.” As of the date of this document, we have notreceived any inquiry, notice, warning, or sanction regarding this offering from the CSRC or anyother PRC government authorities.

On October 26, 2021, the CAC issued draft Administrative Provisions on the Account Namesof Internet Users (互聯網用戶賬號名稱信息管理規定(徵求意見稿)), revising the Regulationson the Administration of Internet User Account Names (互聯網用戶賬號名稱管理規定). Thisdraft requires Internet user account service platforms to, among others, establish, improve and

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strictly implement account name information management system, information contentsecurity system, and personal information protection system, and establish an account nameinformation dynamic check patrol system for the verification of real identity information. Asof the date of this document, this draft has not been formally adopted. Substantial uncertaintiesexist with respect to its enactment timetable, final content, interpretation and implementation.We are still in the process of evaluating the effect of the requirements under this draft on ourbusiness and will make necessary adjustments to our business to comply with the applicablerequirements. If such draft is enacted as proposed, it would be costly for us to make moreefforts on monitoring and managing user account names to comply with these requirements.

On October 8, 2021, the National Development and Reform Commission issued a discussiondraft of the Negative List for Market Access (2021 Version) (市場准入負面清單(2021年版)),which provides that, among others, non-state-capitalized entities shall not conduct the businessof news collecting, editing, releasing and reporting. Weibo does not collect, edit, release orreport news by itself. Weibo holds an Internet News and Information Service License, whichallows it to provide the service of reposting news information and operating a platform todisseminate news information. The draft Negative List also provides that non-state-capitalizedentities shall not engage in live streaming of political, economic, military, diplomatic, majorsocial, cultural, scientific and technological, health, education, sports and other activities andevents related to political direction, public opinion orientation and value orientation. The scopeof live streaming business under this list is relatively broad and vague, and is subject to furtherclarifications and interpretations by the regulator. However, as we generated less than 5% ofour net revenues from live streaming, we do not believe this new requirement would have amaterial adverse impact on our business operations or financial results. As of the date of thisdocument, this draft has not been formally adopted. Substantial uncertainties exist with respectto its enactment timetable, final content, interpretation and implementation. If this draft isenacted as proposed, we may need to further adjust our business and operations, which may beadversely affected.

PRC Legal Opinion

Based on the foregoing and the currently effective PRC laws, we and our PRC Legal Adviserare of the view that the above recent changes in PRC laws and regulations will not affect ourcompliance with laws and regulations in any material aspects as of the date of this document.As of the date of this document, except as disclosed above, we were not involved in anyenquiry, review or investigations by the CAC or other authorities in respect of the aboverecently promulgated laws and regulations.

However, we and PRC Legal Adviser cannot preclude the possibilities that new rules orregulations promulgated in the future will impose additional compliance requirements on us.PRC regulations may change from time to time which may influence our business operationand operation results. Our efforts to comply with new and changing laws are likely to resultin increased costs and risks of non-compliance. See “Risk Factors – We are subject to changinglaws and regulations regarding regulatory matters, corporate governance and public disclosurethat have increased both our costs and the risk of non-compliance.”

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In this document, unless the context otherwise requires, the following terms shall havethe meanings set out below.

“2019 PRC Foreign InvestmentLaw”

the PRC Foreign Investment Law (《中華人民共和國外商投資法》), promulgated by the National People’sCongress in March 2019, which became effective onJanuary 1, 2020

“ADS(s)” American Depositary Shares (each representing oneClass A ordinary share)

“Alibaba” or “Alibaba Group” Alibaba Group Holding Limited

“Articles” or “Articles ofAssociation”

our amended and restated articles of association (asamended from time to time), adopted by a specialresolution passed on March 28, 2014, a summary ofwhich is set out in Appendix III

“board” or “board of directors” our board of directors

“business day” any day (other than a Saturday, Sunday or public holiday)on which banks in Hong Kong or other relevantjurisdictions are generally open for business

“BVI” British Virgin Islands

“CAC” Cyberspace Administration of China

“Cayman Companies Act” the Companies Act, Cap. 22 (Law 3 of 1961, asconsolidated and revised) of the Cayman Islands, asamended or supplemented or otherwise modified fromtime to time

“CCASS” the Central Clearing and Settlement System establishedand operated by HKSCC

“CCASS Clearing Participant” a person admitted to participate in CCASS as a directparticipant or a general clearing participant

“CCASS Custodian Participant” a person admitted to participate in CCASS as a custodianparticipant

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“CCASS EIPO” the application for the Hong Kong Offer Shares to beissued in the name of HKSCC Nominees and depositeddirectly into CCASS to be credited to your or adesignated CCASS Participant’s stock account throughcausing HKSCC Nominees to apply on your behalf,including by (i) instructing your broker or custodian whois a CCASS Clearing Participant or a CCASS CustodianParticipant to give electronic application instructions viaCCASS terminals to apply for the Hong Kong OfferShares on your behalf, or (ii) if you are an existingCCASS Investor Participant, giving electronicapplication instructions through the CCASS InternetSystem (https://ip.ccass.com) or through the CCASSPhone System (using the procedures in HKSCC’s “AnOperating Guide for Investor Participants” in effect fromtime to time). HKSCC can also input electronicapplication instructions for CCASS Investor Participantsthrough HKSCC’s Customer Service Centre bycompleting an input request

“CCASS Investor Participant” a person admitted to participate in CCASS as an investorparticipant who may be an individual or joint individualsor a corporation

“CCASS Participant” a CCASS Clearing Participant, a CCASS CustodianParticipant or a CCASS Investor Participant

“China” or “the PRC” the People’s Republic of China, excluding, for thepurposes of this document only, Taiwan and the specialadministrative regions of Hong Kong and Macau, exceptwhere the context otherwise requires

“Class A ordinary shares” Class A ordinary shares of the share capital of ourCompany with a par value of US$0.00025 each,conferring a holder of a Class A ordinary share one voteper share on any resolution tabled at our Company’sgeneral meeting

“Class B ordinary shares” Class B ordinary shares of the share capital of ourCompany with a par value of US$0.00025 each,conferring weighted voting rights in our Company suchthat a holder of a Class B ordinary share is entitled tothree votes per share on any resolution tabled at ourCompany’s general meeting

“CIC” China Insights Consultancy Limited, an independentindustry consultant whose market research report wascommissioned by us

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“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws ofHong Kong), as amended or supplemented from time totime

“Companies (Winding Up andMiscellaneous Provisions)Ordinance”

the Companies (Winding Up and MiscellaneousProvisions) Ordinance (Chapter 32 of the Laws of HongKong), as amended or supplemented from time to time

“Company,” “our Company,”“we” or “us”

Weibo Corporation, a company incorporated in theCayman Islands on June 7, 2010 as an exempted companyunder the laws of the Cayman Islands with limitedliability and, where the context requires, its subsidiaries(which include consolidated affiliated entities) from timeto time

“connected transaction(s)” has the meaning ascribed to it under the Hong KongListing Rules

“controlling shareholder(s)” has the meaning ascribed to it under the Hong KongListing Rules and unless the context otherwise requires,refers to Mr. Charles Chao and SINA Corporation and theentities and persons that control it, including Sina GroupHolding Company Limited, which is a wholly ownedsubsidiary of New Wave MMXV Limited, a businesscompany controlled by Mr. Chao, through which he holdsinterests in our Company, as set out in “Relationship withour Controlling Shareholders”

“CSRC” the China Securities Regulatory Commission (中國證券監督管理委員會)

“Deposit Agreement” the deposit agreement, dated as of April 16, 2014, asamended, among us, JPMorgan Chase Bank, N.A. and ourADS holders and beneficial owners from time to time

“director(s)” member(s) of our board

“DTC” The Depository Trust Company, the central book-entryclearing and settlement system for equity securities in theUnited States and the clearance system for our ADSs

“EIT” enterprise income tax

“First GM” the upcoming annual general meeting of the Company tobe held on December 1, 2021

“foreign private issuer” as such term is defined in Rule 3b-4 under the U.S.Exchange Act

DEFINITIONS

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“Global Offering” the Hong Kong Public Offering and the InternationalOffering

“Green Application Form(s)” the application form(s) to be completed by the WhiteForm eIPO Service Provider, Computershare HongKong Investor Services Limited

“Group”, “our Group”, “theGroup”, “we”, “us”, or “our”

our Company and our subsidiaries (including theconsolidated affiliated entities) from time to time

“HK$” or “Hong Kong dollars”or “HK dollars”

Hong Kong dollars, the lawful currency of Hong Kong

“HKSCC” Hong Kong Securities Clearing Company Limited, awholly-owned subsidiary of Hong Kong Exchanges andClearing Limited

“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiaryof HKSCC

“Hong Kong” or “HK” the Hong Kong Special Administrative Region of thePRC

“Hong Kong Listing Rules” the Rules Governing the Listing of Securities on TheStock Exchange of Hong Kong Limited, as amended orsupplemented from time to time

“Hong Kong Offer Shares” the Shares offered pursuant to the Hong Kong PublicOffering

“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscriptionby the public in Hong Kong at the Public Offer Price onthe terms and conditions described in this document

“Hong Kong Share Registrar” Computershare Hong Kong Investor Services Limited

“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited

“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listedin “Underwriting — Hong Kong Underwriters”

“Hong Kong UnderwritingAgreement”

the underwriting agreement dated November 26, 2021,relating to the Hong Kong Public Offering and enteredinto by the Company, the Selling Shareholder, the JointRepresentatives and the Hong Kong Underwriters

“independent director(s)” our directors who are “independent” under applicableU.S. regulations and considered “independent non-executive directors” for the purpose of Rule 3.10 of theHong Kong Listing Rules

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“independent third party(ies)” person(s) or company(ies) and their respective ultimatebeneficial owner(s), who/which, to the best of ourdirectors’ knowledge, information and belief, havingmade all reasonable enquiries, is/are not connected withour Company

“International Offer Price” the final offer price per International Offer Share in HongKong dollars (exclusive of brokerage of 1%, SFCtransaction levy of 0.0027% and Hong Kong StockExchange trading fee of 0.005%)

“International Offer Shares” the Shares offered pursuant to the International Offeringtogether with, where relevant, any additional Shareswhich may be sold by the Selling Shareholder pursuant tothe exercise of the Over-allotment Option

“International Offering” the offer of the International Offer Shares at theInternational Offer Price pursuant to a prospectussupplement and the shelf registration statement on FormF-3 that was filed with the SEC and became effective onNovember 26, 2021

“International Underwriters” the group of underwriters, led by the Joint GlobalCoordinators, that expects to enter into the InternationalUnderwriting Agreement to underwrite the InternationalOffering

“International UnderwritingAgreement”

the international underwriting agreement relating to theInternational Offering, which is expected to be enteredinto by the Company, the Selling Shareholder, the JointRepresentatives and the International Underwriters on orabout December 2, 2021

“Joint Bookrunners” the joint bookrunners as named in “Directors and PartiesInvolved in the Global Offering”

“Joint Global Coordinators” the joint global coordinators as named in “Directors andParties Involved in the Global Offering”

“Joint Policy Statement” the Joint Policy Statement Regarding the Listing ofOverseas Companies jointly issued by the Hong KongStock Exchange and the SFC on September 27, 2013

“Joint Representatives” the joint representatives as named in “Directors andParties Involved in the Global Offering”

“Joint Sponsors” the Joint Sponsors of the listing of the Class A ordinaryshares on the Main Board of the Hong Kong StockExchange as named in “Directors and Parties Involved inthe Global Offering”

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“Latest Practicable Date” November 22, 2021, being the latest practicable dateprior to the date of this document for the purpose ofascertaining certain information contained in thisdocument

“Law(s)” all laws, statutes, legislation, ordinances, rules,regulations, guidelines, opinions, notices, circulars,orders, judgements, decrees or rulings of anyGovernmental Authority (including, without limitation,the Stock Exchange and the SFC) of all relevantjurisdictions

“Listing” the listing we are seeking on the Hong Kong StockExchange under Chapter 19C of the Hong Kong ListingRules

“Listing Committee” the Listing Committee of the Hong Kong Stock Exchange

“Listing Date” the date, expected to be on or about December 8, 2021,on which the Class A ordinary shares are listed on MainBoard and from which dealings in the Class A ordinaryshares are permitted to commence on the Main Board

“Main Board” the stock market (excluding the option market) operatedby the Hong Kong Stock Exchange which is independentfrom and operated in parallel with the Growth EnterpriseMarket of the Hong Kong Stock Exchange

“Major Subsidiaries” our subsidiaries and consolidated affiliated entities asidentified in “History and Corporate Structure —Corporate Structure — Major Subsidiaries”

“Memorandum” or“Memorandum of Association”

our amended and restated memorandum of association (asamended from time to time), adopted by a specialresolution passed on March 28, 2014, a summary ofwhich is set out in Appendix III to this document

“MOF” Ministry of Finance of the PRC (中華人民共和國財政部)

“MOFCOM” Ministry of Commerce of the PRC (中華人民共和國商務部)

“Nasdaq” Nasdaq Global Select Market

“Negative List” the Special Administrative Measures (Negative List) forForeign Investment Access, most recently jointlypromulgated by the MOFCOM and the NationalDevelopment and Reform Commission of the PRC (中華人民共和國發展和改革委員會) on June 23, 2020 andwhich became effective on July 23, 2020, as amended,supplemented or otherwise modified from time to time

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“Offer Share(s)” the Hong Kong Offer Shares and the International OfferShares, including the Sale Shares, being Class A ordinaryshares of our Company, together with, where relevant,any additional Class A ordinary shares which may be soldby the Selling Shareholder pursuant to the exercise of theOver-allotment Option

“Option Shares” up to 1,650,000 existing Class A ordinary shares to besold by the Selling Shareholder pursuant to the exerciseof the Over-allotment Option

“Over-allotment Option” the option to be granted by the Selling Shareholder to theInternational Underwriters, exercisable by the JointRepresentatives (for themselves and on behalf of theInternational Underwriters) under the InternationalUnderwriting Agreement, pursuant to which the SellingShareholder may be required to sell the Option Shares infull up to an aggregate of 1,650,000 Option Shares at theInternational Offer Price to, among other things, coverover-allocations in the International Offering, if any

“PBOC” People’s Bank of China

“PCAOB” the Public Company Accounting Oversight Board

“PFIC” passive foreign investment company

“PRC Company Law” the Company Law of the PRC (《中華人民共和國公司法》), enacted by the Standing Committee of the EighthNational People’s Congress on December 29, 1993 andeffective on July 1, 1994, and most recently amended onOctober 26, 2018, and as amended, supplemented orotherwise modified from time to time

“PRC Legal Adviser” TransAsia Lawyers, our legal adviser as to the laws of thePRC

“Price Determination Agreement” the agreement to be entered into by the JointRepresentatives (for themselves and on behalf of theUnderwriters) and us on the Price Determination Date torecord and fix the pricing of the Offer Shares

“Price Determination Date” the date, expected to be on or about December 2, 2021,on which the International Offer Price and Public OfferPrice will be determined, or such later time as the JointRepresentatives (for themselves and on behalf of theUnderwriters) and we may agree, but in any event, notlater than December 3, 2021

“Principal Share Registrar” Global Incorporation Centre Limited, our share registrarin the Cayman Islands

DEFINITIONS

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“Public Offer Price” the final offer price per Hong Kong Offer Share in HongKong dollars (exclusive of brokerage of 1%, SFCtransaction levy of 0.0027% and Hong Kong StockExchange trading fee of 0.005%)

“Qualifying Issuer” has the meaning given to it under Chapter 19C of theHong Kong Listing Rules

“Relevant Persons” the Joint Sponsors, the Joint Representatives, the JointGlobal Coordinators, the Underwriters, any of their orour Company’s respective directors, officers, employees,partners, agents, advisers and any other parties involvedin the Global Offering

“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC

“RSU(s)” restricted share unit(s)

“SAFE” State Administration of Foreign Exchange of the PRC (中華人民共和國國家外匯管理局), the PRC governmentalagency responsible for matters relating to foreignexchange administration, including local branches, whenapplicable

“SAFE Circular 37” the Circular on Relevant Issues Concerning ForeignExchange Control on Domestic Residents’ OffshoreInvestment and Financing and Roundtrip Investmentthrough Special Purpose Vehicles (《國家外匯管理局關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》) promulgated by SAFE witheffect from July 4, 2014

“SAIC” State Administration for Industry and Commerce of thePRC (中華人民共和國國家工商行政管理總局), currentlyknown as SAMR

“Sale Shares” the Shares to be offered for sale by the SellingShareholder at the Public Offer Price under the GlobalOffering, and to the extent the Over-allotment Option isexercised, together with up to an aggregate of 1,650,000additional Option Shares to be offered for sale by theSelling Shareholder

“SAMR” State Administration for Market Regulation of the PRC(中華人民共和國國家市場監督管理總局)

“SCNPC” the Standing Committee of the National People’sCongress of the PRC (全國人民代表大會常務委員會)

“SEC” the United States Securities and Exchange Commission

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“Selling Shareholder” Sina Corporation, in the capacity of a seller of the SaleShares pursuant to the International UnderwritingAgreement

“SFC” the Securities and Futures Commission of Hong Kong

“SFO” or “Securities andFutures Ordinance”

the Securities and Futures Ordinance (Chapter 571 of theLaws of Hong Kong), as amended or supplemented fromtime to time

“Share(s)” the Class A ordinary shares and Class B ordinary sharesin the share capital of our Company, as the context sorequires

“Share Incentive Plans” the 2010 Share Incentive Plan and the 2014 ShareIncentive Plan summarized in “Directors and SeniorManagement — Compensation — Share IncentivePlans,” and any other share incentive plans adopted byour Company from time to time

“shareholder(s)” holder(s) of Shares and, where the context requires,ADSs

“SINA” or “SINA Corporation” SINA Corporation, an exempted company with limitedliability founded on March 10, 1999 through the mergerof Beijing SINA Information Technology Co., Ltd. andCalifornia-based SINANET.com, and the parent companyand a controlling shareholder of our Company

“Stabilizing Manager” Goldman Sachs (Asia) L.L.C.

“Stock Borrowing Agreement” the stock borrowing agreement expected to be enteredinto on or around the Price Determination Date betweenWB Estate and the Stabilizing Manager pursuant towhich the Stabilizing Manager may borrow up to1,650,000 Shares from WB Estate to facilitate thesettlement of over-allocations

“subsidiary” or “subsidiaries” has the meaning ascribed thereto in the Hong KongListing Rules and includes the consolidated affiliatedentities and variable interest entities

“Takeovers Codes” the Codes on Takeovers and Mergers and Share Buy-backs issued by the SFC

“Track Record Period” the years ended December 31, 2018, 2019 and 2020 andthe six months ended June 30, 2021

“Underwriters” the Hong Kong Underwriters and the InternationalUnderwriters

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“Underwriting Agreements” the Hong Kong Underwriting Agreement and theInternational Underwriting Agreement

“U.S.” or “United States” the United States of America, its territories, itspossessions and all areas subject to its jurisdiction

“U.S. Exchange Act” the United States Securities Exchange Act of 1934, asamended, and the rules and regulations promulgatedthereunder

“U.S. GAAP” accounting principles generally accepted in the UnitedStates

“U.S. Securities Act” the United States Securities Act of 1933, as amended, andthe rules and regulations promulgated thereunder

“US$” or “U.S. dollars” United States dollars, the lawful currency of the UnitedStates

“variable interest entities,”“VIE” or “VIEs”

our variable interest entities, or any one of them, thefinancial results of which are consolidated into ourconsolidated financial statements as if they were oursubsidiaries

“VAT” value-added tax; all amounts are exclusive of VAT in thisdocument except where indicated otherwise

“VIE shareholder(s)” the individual or ultimate shareholders of the variableinterest entities

“VIE structure” or “ContractualArrangements”

variable interest entity structure, and where the contextrequires, and the agreements underlying it

“WB Estate” WB HZGS Estate (Hong Kong) Limited (香港微博裕墅有限公司), a company incorporated under the laws ofHong Kong on September 18, 2019 and our wholly-owned subsidiary

“Weibo Technology” Weibo Internet Technology (China) Co., Ltd. (微夢創科網絡科技(中國)有限公司), a company established underthe laws of the PRC on October 11, 2010, a subsidiary ofour Company

“WVR” or “weighted votingright”

has the meaning ascribed to it under the Hong KongListing Rules

“Weimeng” Beijing Weimeng Technology Co. Ltd. (北京微夢創科網絡技術有限公司), a company established under the lawsof the PRC on August 9, 2010, one of our consolidatedaffiliated entities

DEFINITIONS

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“Weimeng Chuangke” Beijing Weimeng Chuangke Investment ManagementCo., Ltd. (北京微夢創科創業投資管理有限公司), acompany established under the laws of the PRC on April9, 2014, one of our consolidated affiliated entities

“White Form eIPO” the application for Hong Kong Offer Shares to be issuedin the applicant’s own name by submitting applicationsonline through the designated website of the White FormeIPO Service Provider, www.eipo.com.hk

“White Form eIPO ServiceProvider”

Computershare Hong Kong Investor Services Limited

“WVR beneficiaries” has the meaning ascribed to it under the Hong KongListing Rules and unless the context otherwise requires,refers to the WVR beneficiaries set out in “ShareCapital”, holding the Class B ordinary shares, whichentitle them to weighted voting rights, details of whichare set out in the section headed “Share Capital”

“WVR structure” has the meaning ascribed to it under the Hong KongListing Rules

In this document, the terms “associate(s),” “close associate(s),” “core connected person(s)” and“substantial shareholder(s)” shall have the meanings given to such terms in the Hong KongListing Rules, unless the context otherwise requires.

Unless otherwise expressly stated or the context otherwise requires, all data in this documentis as of the date of this document.

The English names of PRC entities, PRC laws or regulations, and PRC governmentalauthorities referred to in this document are translations from their Chinese names and are foridentification purposes. If there is any inconsistency, the Chinese names shall prevail.

Certain amounts and percentage figures included in this document have been subject torounding adjustments. Accordingly, figures shown as totals in certain tables may not be anarithmetic aggregation of the figures preceding them.

DEFINITIONS

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This glossary contains definitions of certain technical terms used in this document inconnection with us and our business. These may not correspond to standard industrydefinitions, and may not be comparable to similarly terms adopted by other companies.

“bare-metal server technology” a technology enabling a physical computer server to beused by one consumer only

“container technology” a method to package an application for such applicationand its dependencies to run isolated from other processes

“daily video viewers” users who viewed videos on Weibo on a daily basis

“direct content cost payout” a method to subsidize content creators through directpayment in order to incentivize their content generation

“DAUs” daily active users, which are Weibo users who logged onwith a unique Weibo ID and accessed Weibo through ourwebsite, mobile website, desktop or mobile applications,SMS or connections via our platform partners’ websitesor applications that are integrated with Weibo, on a givenday, and “average DAUs” for a month refers to theaverage of the DAUs for each day during the month. Thenumbers of our DAUs are calculated using internalcompany data that has not been independently verifiedand we treat each account as a separate user for purposesof calculating DAUs, although it is possible that certainindividuals or organizations may have set up on morethan one account and certain accounts are used bymultiple individuals within an organization

“feeds” include both posts and reposts

“hybrid cloud platform” our proprietary, in-house designed platform which hashyperscale data distributed computing and analyzingcapabilities to handle hot topics on the Weibo platform inreal-time

“MAUs” monthly active users, which are Weibo users who loggedon with a unique Weibo ID and accessed Weibo throughour website, mobile website, desktop or mobileapplications, SMS or connections via our platformpartners’ websites or applications that are integrated withWeibo, during a given calendar month. The numbers ofour MAUs are calculated using internal company datathat has not been independently verified, and we treateach account as a separate user for purposes ofcalculating MAUs, although it is possible that certainindividuals or organizations may have set up on morethan one account and certain accounts are used bymultiple individuals within an organization

GLOSSARY OF TECHNICAL TERMS

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“monthly active content creators” users who have posted at least one original post on Weiboin a given month

“top content creators” content creators with more than 10,000 followers as ofthe end of a given month or 10,000 monthly views onWeibo in a given month, excluding duplicates

“verified accounts” accounts whose identities have been verified by us fromvarious angles based on different types of verifiedaccounts, such as celebrities, KOLs, enterprises andmedia outlets

GLOSSARY OF TECHNICAL TERMS

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Certain statements in this document are forward looking statements that are, by their nature,subject to significant risks and uncertainties. Any statements that express, or involvediscussions as to, expectations, beliefs, plans, objectives, assumptions or future events orperformance (often, but not always, through the use of words or phrases such as “will,”“expect,” “anticipate,” “estimate,” “believe,” “going forward,” “ought to,” “may,” “seek,”“should,” “intend,” “plan,” “projection,” “could,” “vision,” “goals,” “aim,” “aspire,”“objective,” “target,” “schedules” and “outlook”) are not historical facts, are forward-lookingand may involve estimates and assumptions and are subject to risks (including but not limitedto the risk factors detailed in this document), uncertainties and other factors some of which arebeyond our Company’s control and which are difficult to predict. Accordingly, these factorscould cause actual results or outcomes to differ materially from those expressed in theforward-looking statements.

Our forward-looking statements have been based on assumptions and factors concerning futureevents that may prove to be inaccurate. Those assumptions and factors are based oninformation currently available to us about the businesses that we operate. The risks,uncertainties and other factors, many of which are beyond our control, that could influenceactual results include, but are not limited to:

• our operations and business prospects;

• our business and operating strategies and our ability to implement such strategies;

• our ability to develop and manage our operations and business;

• competition for, among other things, capital, technology and skilled personnel;

• our ability to control costs;

• our dividend policy;

• changes to regulatory and operating conditions in the industry and geographical marketsin which we operate; and

• all other risks and uncertainties described in “Risk Factors.”

Since actual results or outcomes could differ materially from those expressed in anyforward-looking statements, we strongly caution investors against placing undue reliance onany such forward-looking statements. Any forward-looking statement speaks only as at the dateon which such statement is made, and, except as required by the Hong Kong Listing Rules, weundertake no obligation to update any forward-looking statement or statements to reflect eventsor circumstances after the date on which such statement is made or to reflect the occurrenceof unanticipated events. Statements of or references to our intentions or those of any of ourdirectors are made as at the date of this document. Any such intentions may change in light offuture developments.

All forward-looking statements in this document are expressly qualified by reference to thiscautionary statement.

FORWARD-LOOKING STATEMENTS

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You should carefully consider all of the information set out in this document beforemaking an investment in the Shares, including the risks and uncertainties described belowin respect of our business and our industry and the Global Offering. You should payparticular attention to the fact that we are a company incorporated in the Cayman Islandsand that our principal operations are conducted in China and are governed by a legal andregulatory environment that in some respects differs from what prevails in othercountries. Our business could be affected materially and adversely by any of these risks.

RISKS RELATING TO OUR BUSINESS

If we fail to grow our active user base, or if user engagement on our platform declines, ourbusiness, financial condition and operating results may be materially and adverselyaffected.

The growth of our active user base and the level of user engagement are critical to our business.We had 566 million MAUs and 246 million average DAUs in June 2021. Our business has beenand will continue to be significantly affected by our success in growing and retaining massiveactive users and increasing their overall level of engagement on our platform, including theirengagement with promoted feeds, other advertising and marketing products and value-addedservices on our platform. We anticipate that our user growth rate will slow over time as the sizeof our user base increases and as we achieve higher market penetration in China’s internetpopulation. To the extent our user growth rate slows or the number of our users declines, oursuccess will become increasingly dependent on our ability to retain existing users and enhanceuser activities and stickiness on the platform. If people do not perceive content and otherproducts and services on our platform to be interesting and useful, we may not be able to retainand attract users or increase their engagement. A number of user-oriented websites and mobileapplications that achieved early popularity have since seen their user bases or levels ofengagement decline, in some cases precipitously. There is no guarantee that we will notexperience a similar erosion of our active user base or engagement level. A number of factorscould potentially negatively affect user growth and engagement, including if:

• we are unable to retain existing users and attract new users to our platform, orachieve greater penetration into lower tier cities in China;

• there is a decrease in the perceived quality or reliability of the content generated byour users;

• a large number of influencers, such as celebrities, key opinion leaders, or KOLs andother public figures, and platform partners, such as media outlets and organizationswith media rights, switch to alternative platforms or use other products and servicesmore frequently;

• we are unable to manage and prioritize information to ensure users are presentedwith content that is appropriate, interesting, useful and relevant;

• we fail to introduce new and improved products or services or we introduce new orimproved products or services that are not well received by users;

• technical or other problems prevent us from delivering our products or services ina rapid and reliable manner or otherwise adversely affect the user experience;

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• users believe that their experience is diminished as a result of the decisions we makewith respect to the frequency, relevance, prominence, format and quality of theadvertisements displayed on our platform;

• we are unable to combat spam or other hostile or inappropriate usage on ourplatform;

• there are user concerns related to privacy and communication, safety, security orother factors;

• we fail to provide adequate customer service to our users;

• users engage with other platforms or activities instead of ours;

• there are adverse changes in our products or services that are mandated by, or thatwe elect to make to address, legislation, regulations or government policies; or

• we fail to maintain our brand image or our reputation is damaged.

We have undertaken various initiatives to stimulate the growth of our users and userengagement. For instance, in addition to the microblogging service with which Weibooriginally started, we have added functionalities such as trends, topics, search, short videos,live streaming and interest-based information feeds over the years, which we believe havehelped broaden our appeal and generate more user traffic and engagement. However, there canbe no assurance that these and other strategies will continue to be effective. If we are unableto increase our user base and user engagement, our platform could be less attractive to potentialnew and existing users and customers, which would have a material and adverse impact on ourbusiness, financial condition and operating results.

If our users and platform partners do not continue to contribute content or theircontributions are not valuable to other users, we may experience a decline in user trafficand user engagement.

Our success depends on our ability to provide users with interesting and useful content, whichin turn depends on the content contributed by our users and platform partners. We believe thatone of our competitive advantages is the quality, quantity and open nature of the content onWeibo, and that access to rich content is one of the main reasons users visit Weibo. We seekto foster a broader and more engaged user community, and we encourage influencers, such ascelebrities, KOLs and other public figures, and platform partners, such as multi-channelnetworks, (the “MCNs”), media outlets and organizations with media rights, to use ourplatform to express their views and share interesting, and high quality content.

Among all our users, influencers have been contributing increasingly interesting and attractivecontents on our platform. We provide these content creators with the opportunity to monetizetheir social assets on Weibo through advertising, e-commerce, paid-subscription, tipping andother means. If content creators do not see significant value from their social marketingactivities on Weibo and find monetization on Weibo inadequate, we may have to subsidize themthrough direct content cost payout, which may have an adverse and material impact on ourbusiness and operating results. Alternatively, content creators may choose to switch to otherplatforms and contribute less or no content to Weibo, which may cause our user base and userengagement to decline and our customers view our products and services less attractive foradvertising and marketing purposes and consequently reduce their advertising spending on ourplatform.

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If users and platform partners do not continue to contribute content to Weibo due to policychanges, their use of alternative communication channels or any other reasons, and we areunable to provide users with interesting, useful and timely content, our user base and userengagement may decline. If we experience a decline in the number of users or the level of userengagement, customers may not view our products and services as attractive for theiradvertising and marketing expenditures and may reduce their spending with us, which wouldmaterially harm our business and operating results.

We rely on our partnership program with channel partners, which mainly includeapplication pre-install partners, programmatic buying partners and applicationmarketplaces, to drive traffic to our platform, and if our partnership program becomesless effective or if the smartphone market and shipment in China slow down compared tothe prior years, traffic to our platform could decline and our business and operatingresults could be adversely affected.

We work with application (app) pre-install partners, such as key domestic handsetmanufacturers for user acquisition and activation. Due to intense competition in themarketplace, app pre-install partners may raise prices to a point where it becomes costprohibitive for us to rely on them for Weibo user activation, or they may decide to discontinuetheir services to us altogether. The partnership also highly depends on the total amount ofhandset shipment and sales of our partners, which may fluctuate or slow down compared withprior years. The smartphone shipment in China decreased in 2020, compared to 2019. Thegrowth of Weibo’s user base is impacted by the growth of new users from Weibo app, andpre-installation of Weibo app on new smartphones is an important source of new Weibo users.A continuing slowdown of new smartphone shipment in China may adversely impact thegrowth rate of our new users. If this trend continues, our business and operating results maybe materially and adversely affected.

We also work with programmatic buying partners, such as top applications for traffic directionand user activation. Due to the real time bidding nature of programmatic buying, the prices forinventories on top applications may fluctuate or surge to a point where it becomes less costeffective for us to invest in the channel. In addition, inaccurate user targeting and the possiblehigh churn rate observed during the traffic direction step may also limit the overalleffectiveness of the partnership.

In addition, we work with application marketplaces, including app stores of key domestichandset manufacturers as well as other major application marketplaces, such as Tencent AppStore, Baidu Mobile Assistant and 360 Mobile Assistant, to drive downloads of our mobileapplications. In the future, Google (Android), Apple or other operators of applicationmarketplaces may make changes to their marketplaces and make access to our products andservices more difficult.

If we are unable to compete effectively for user traffic or user engagement, our businessand operating results may be materially and adversely affected.

Competition for user traffic and user engagement is intense and we face strong competition inour business. Major Chinese internet companies, such as Tencent and Bytedance, competedirectly with us for user traffic and user engagement, content, talent and marketing resources.As a social media featuring social networking services and messenger features, we are subjectto intense competition from providers of similar services as well as potentially new types ofonline services. These services include (i) messengers and other social apps and sites, such asWeixin/WeChat, QQ Mobile, Qzone Mobile and Momo; (ii) news apps and sites, such as those

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operated by other major internet companies, including Tencent, Bytedance, Baidu, NetEase,Sohu and Phoenix News Media; (iii) multimedia apps (photo, video and live streaming, etc.),such as Douyin/TikTok, Kuaishou, Bilibili, iQiyi, Tencent Video, Youku, Xigua Video, Red(Xiaohongshu), Momo and JOYY. In addition, as a media platform in nature, we also competewith traditional media companies for audiences and content.

We also compete with both offline and online games for the time and money of gamers. Weoffer social commerce solutions to our customers that enable them to conduct e-commerce onour platform. Consequently, our offerings compete with e-commerce companies and onlineverticals that enable merchants to conduct e-commerce, including location-based services andonline-to-offline services. In addition to direct competition, we face indirect competition fromcompanies that sponsor or maintain high traffic volume websites or provide an initial point ofentry for internet users, including but not limited to providers of search services, web browserand navigation pages, such as Baidu, UC Web and Qihoo 360. We may also face competitionfrom global social media, social networking services and messengers, such as Facebook,Instagram, Twitter, Youtube, TikTok, WhatsApp, Facebook Messenger, Snapchat, Pinterest,Line and Kakao Talk. Some of our competitors may have substantially more cash, traffic,technical and other resources than we do. We may be unable to compete successfully againstthese competitors or new market entrants, which may adversely affect our business andfinancial performance.

We believe that our ability to compete effectively for user traffic and user engagement dependsupon many factors both within and beyond our control, including:

• the popularity, usefulness, ease of use, performance and reliability of our products andservices compared to those of our competitors;

• the amount, quality and timeliness of content aggregated on our platform;

• our ability to enable celebrities, KOLs, media outlets and other content creators to quicklyand efficiently build a fan base and monetize from their social assets;

• our ability, and the ability of our competitors, to develop new products and services andenhancements to existing products and services to keep up with user preferences anddemands;

• the frequency, relevance and relative prominence of the advertisements displayed by usor our competitors;

• our ability to establish and maintain relationships with platform partners;

• our ability to provide effective customer service and support;

• changes mandated by, or that we elect to make to address, legislation, regulations orgovernment policies, some of which may have a disproportionate effect on us;

• acquisitions or consolidation within our industry, which may result in more formidablecompetitors; and

• our reputation and brand strength relative to our competitors.

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We may not be able to maintain or grow our revenues or our business.

We have experienced significant growth in revenues and in our business in recent years. Ourability to continue to grow our revenues depends on a number of factors. See “FinancialInformation — Factors Affecting Our Results of Operations” for a detailed discussion.

Our revenue growth also depends on our ability to continue to grow our core businesses,newly-developed businesses, as well as businesses we have acquired or which we consolidated.We are exploring and will continue to explore in the future new business initiatives, includingin industries and markets in which we have limited or no experience, as well as new businessmodels, that may be untested. Developing new businesses, initiatives and models requiressignificant investments of time and resources, and may present new and difficult technological,operational and compliance challenges. Many of these challenges may be specific to businessareas with which we do not have sufficient experience. We may encounter difficulties orsetbacks in the execution of various growth strategies and these growth strategies may notgenerate the returns we expect within the timeframe we anticipate, or at all.

In addition, our overall or segment revenue growth may slow or our revenues may decline forother reasons, including increasing competition and slowing growth of China’s smartphonemarket, disruptions to China’s economy or the global economy from pandemics, naturaldisasters or other events, as well as changes in the geopolitical landscape, government policiesor general economic conditions. As our revenue grows to a higher base level, our revenuegrowth rate may slow in the future. Furthermore, due to the size and scale we have achieved,our user base may decrease, not continue to grow as quickly or at all.

We generate a substantial majority of our revenues from online advertising andmarketing services. If we fail to generate sustainable revenue and profit through ouradvertising and marketing services, our result of operations could be materially andadversely affected.

We started to generate revenues in 2012 through advertising and marketing services, and to aless extent also through value-added services. Ever since then, advertising and marketingservices have been contributing a substantial majority of our total revenues, accounting for88% of our revenues in 2020 and 86% of our revenues for the six months ended June 30, 2021.Therefore, any failure to continue generating sustainable revenue and profit through ouradvertising and marketing services could materially harm our business.

Compared with traditional advertising and marketing solutions, online advertising andmarketing services are evolving rapidly and sometimes considered experimental. In addition,we, as well as the whole industry, are endeavoring to develop novel forms of advertising andmarketing services. As a result, we cannot guarantee that the advertising and marketingstrategies we have adopted can generate sustainable revenues and profit. Particularly, as iscommon in the industry, our advertising and marketing customers do not have long-termcommitments with us. In addition, some potential new customers may view our advertising andmarketing services as unproven, and we may need to devote additional time and resources toconvince them. Customers will not continue to do business with us or may only be willing toadvertise with us at reduced prices if we do not deliver advertising and marketing services inan effective manner, or if they do not believe that their investment in advertising and marketingwith us will generate a competitive return relative to alternative advertising platforms.

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Our ability to add new customers and increase spending of existing customers can beparticularly affected by our ability to provide timely and reliable measurement analysis ofcustomers’ advertising campaigns on Weibo, as some customers, especially key accounts, relyon advertisement measurement to evaluate advertising effectiveness. We are working withthird-party measurement firms to provide these data services to our customers but the onlineadvertisement measurement market in China is nascent. We cannot assure you that ourmeasurement partners will be able to provide measurement to the satisfaction of our customers.If our customers are unable to obtain measurement results on their marketing campaigns onWeibo to their satisfaction, our customers may be less willing to maintain or expand theiradvertising spending on our platform, and our financial conditions, results of operations andprospects may be materially and adversely affected.

We also need to adapt our advertising and marketing service offerings to the way usersconsume contents on our platforms. We introduced mobile-adapted promoted marketingsolutions, such as promoted feeds, to our advertisers as our mobile products gain more usertraffic. Users’ preferences on content format are also evolving. Online content in video formathas become increasingly prevalent in recent years. If we are unable to adapt our products andservices for the video environment and develop products and services to generate videoadvertising revenues, especially for the mobile environment, our results of operations andprospects may be materially and adversely affected.

Advertisements shown on our platform may subject us to penalties and otheradministrative actions.

Under PRC advertising laws and regulations, we are obligated to monitor the advertisingcontent shown on our platform to ensure that such content is true and accurate and incompliance with applicable PRC laws and regulations. PRC advertising laws and regulationsimpose prohibitions and restrictions on certain types of advertisements. For instance,advertisements for certain products, such as tobacco, are not allowed to be publicly posted, andadvertisements for other products and services, such as alcohol, medical treatment,pharmaceuticals or medical devices, healthcare food, real estate and financial products, aresubject to certain restrictions on content and other requirements. In addition, where a reviewby relevant governmental authorities is required before certain types of advertisements can beposted, such as advertisements for pharmaceuticals and medical devices, we are obligated toconfirm that such review has been performed and approval has been obtained.

The Chinese government may from time to time promulgate new advertising laws andregulations, including possible additional restrictions on online advertising services, and theserestrictions may relate to, among other attributes, the content, placement and appearance ofadvertisements. In addition, recent activities and technology trends in advertising, such as linksin comments or posts, and the proliferation of short video and live streaming platforms, withpaid promotions that are frequently not marked as advertising, have made advertising contentmonitoring more challenging. Moreover, technologies and tools attempting to circumvent,evade or deceive our advertisement content monitoring system are evolving, which makes itmore complicated for us to monitor and review the advertisements on our platform. When wediscover advertisements that violate laws and regulations, we will timely take correspondingmeasures. Although we have made significant efforts to ensure that the advertisements shownon our platform are in full compliance with applicable PRC laws and regulations, we cannotensure that we will be in compliance at all times with the requirements under any new laws andregulations. For a detailed description of the procedures we implement, see “Business — RiskManagement and Internal Control — Internal Control Risk Management.” Failure to complywith these obligations may subject us to fines and other administrative penalties.

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If advertisements shown on our platform are in violation of relevant PRC advertising laws andregulations, we may be subject to penalties, including fines, confiscation of advertisingincome, orders to cease dissemination of the advertisements and orders to publish correctiveinformation. In case of serious violation, the PRC governmental authorities may revoke ourbusiness licenses. During the Track Record Period, our Major Subsidiaries have received threepenalties, including fines from RMB1,000 to RMB200,000, and confiscation of advertisingincome. For example, in 2018, Beijing Haidian Administration for Industry and Commerceissued a decisions to impose an administrative penalty on Weimeng, including a fine ofRMB200,000 on Weibo and confiscation of the advertising revenue of RMB1,171.19, becausethe authorities was of the opinion that certain advertisements published on Weibo containedcontent that violated “good social customs.” We paid the fine and cooperated with the relevantgovernment authorities to take corrective measures as required. We believe these penalties,individually or in the aggregate, did not have a material adverse effect on our business,financial condition or results of operations during the Track Record Period. However, there canbe no assurance that there will not be any further penalties, which may have a material andadverse effect on our business, financial condition, results of operations and prospects, brandand reputation.

If we are unable to compete effectively for advertising and marketing spending, ourbusiness and operating results may be materially and adversely affected.

In addition to intense competition for users and user engagement, we also face significantcompetition for advertising and marketing spending. A substantial majority of our revenues arecurrently generated through advertising and marketing services. We compete against online andmobile businesses that offer such services, mainly including Tencent, Bytedance, Baidu,Kuaishou, iQiyi, NetEase and Sohu. We also compete with internet companies that offeronline-to-offline (O2O), purchase solutions and other performance-based advertising andmarketing services and digital media tailored to specific vertical industries including fastmoving consumer goods, IT, automobile, e-commerce, entertainment and travel, such asMeituan, Autohome, Bitauto and Qutoutiao. We also compete against traditional media outlets,such as television, radio and print, for advertising and marketing budgets.

In order to grow our revenues and improve our operating results, we must increase our marketshare of advertising and marketing spending relative to our competitors, many of which arelarger companies that offer more traditional and widely accepted advertising products. Inaddition, some of our larger competitors have substantially broader product or service offeringsand leverage their relationships based on other products or services to gain additional share ofadvertising and marketing budgets.

We believe that our ability to compete effectively for advertising and marketing spendingdepends upon many factors both within and beyond our control, including:

• the size, composition and activeness of our user base relative to those of our competitors;

• the breadth, innovation and effectiveness of our product and service offerings;

• the timing and market acceptance of our advertising and marketing products and services,including breadth, quality and variety of our advertisement formats and features and thoseof our competitors;

• the effectiveness of our advertisement targeting capabilities, and those of our competitors;

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• the volume, pricing and return on investment of our products and services relative tothose of our competitors;

• the reach, engagement and effectiveness of our advertising and marketing products andservices relative to those of our competitors;

• the availability, accuracy and utility of analytics and measurement solutions offered by usor our partners relative to those of our competitors;

• our ability to attract, retain and motivate talented employees;

• the effectiveness of our performance-based advertisements and real-time bidding systemrelative to those of our competitors;

• our sales and marketing efforts, and those of our competitors; and

• our reputation and the strength of our brand relative to our competitors.

Significant acquisitions and consolidation by and among our actual and potential competitorsmay present heightened competitive challenges for our business. Acquisitions of our platformpartners by our competitors could result in reduced content and functionality of our productsand services. Consolidation may also enable our larger competitors to offer bundled orintegrated products that feature alternatives to our platform. Reduced content and functionalityof our products and services, or our competitors’ ability to offer bundled or integrated productsthat compete directly with us, may cause our user base and user engagement to decline andcustomers to reduce their spending with us. If we are not able to compete effectively foradvertising and marketing spending, our business and operating results may be materially andadversely affected.

Our operating history may not be the indicator of our future prospects.

The market for social media is still evolving and may not develop as expected. People who arenot our users, customers or platform partners may not understand the value of our products andservices and new users, customers or platform partners may initially find our products andservices confusing. There may be a perception that our products and services are only usefulto users who post, or to influential users with large audiences. Convincing potential new users,customers and platform partners of the value of our products and services is critical toincreasing the number of our users, customers and platform partners and to the success of ourbusiness. Although we have experienced continued user growth as shown by the increase of ourMAUs and DAUs for the past few years, some of our peers may have experienced a declinein user base. If microblogging, social media, online media or social product, in general,declines in popularity among Chinese internet users, we may be unable to grow our user baseor maintain or increase user engagement.

We launched Weibo in August 2009 and began to generate revenues in 2012. Given the rapidlyevolving markets in which we compete, our historical operating results may not be useful toyou in predicting our future operating results. You should consider our business and prospectsin light of the risks and challenges we encounter or may encounter in this developing andrapidly evolving market. These risks and challenges include our ability to, among other things:

• increase the number of our users and the level of user engagement;

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• develop a reliable, scalable, secure, high-performance technology infrastructure that canefficiently handle increased usage;

• convince customers of the benefits and effectiveness of our advertising and marketingservices;

• refine our interest-based recommendation engine to enable more relevant contentrecommendation and effective audience targeting;

• increase demand for value-added services, such as VIP membership, live streaming, andgame-related services;

• develop and deploy new features, products and services for our users, customers andplatform partners, including video functionalities and interest-based information feeds;

• successfully compete with other companies, some of which have substantially greaterresources and market power than us, that are currently in, or may in the future enter, ourindustry, or duplicate the features of our products and services;

• attract, retain and motivate talented employees;

• process, store, protect and use personal data in compliance with governmentalregulations, contractual obligations and other obligations related to privacy and security;and

• defend ourselves against litigation, regulatory, intellectual property, privacy or otherclaims.

If we fail to educate potential users, customers and platform partners about the value of ourproducts and services, if the market for our platform does not develop as we expect or if wefail to address the needs of this market, our business will be harmed. Failure to adequatelyaddress these or other risks and challenges could harm our business and cause our operatingresults to suffer.

Alibaba is our largest customer and an important strategic partner. If we fail to maintainour collaboration with Alibaba, our results of operations and growth prospect may beadversely and materially affected.

From April 2013 to January 2016, we had a strategic collaboration with Alibaba and itsaffiliated entities to jointly explore social commerce and develop innovative marketingsolutions to enable merchants on Alibaba’s e-commerce platforms to better connect and buildrelationships with our users. Revenues generated from the strategic collaboration with Alibabaaccounted for 30% of our revenues from 2013 to 2015. Although revenue contribution byAlibaba has declined as a percentage to our total revenues in recent years, as a result of therapid growth of our business scale as well as our strategy to diversify revenue sources after thestrategic collaboration agreement expired in early 2016, Alibaba remains as our largestcustomer. More importantly, we rely on them to enable us to offer e-commerce advertisingsolutions to brands and merchants on both of our platforms. If we are unable to either maintainstrong cooperation with Alibaba or find other customers that can bring in similar amount ofrevenues to offset the possible decline of revenue from Alibaba or the revenue associated withAlibaba’s ecosystem, our results of operations and growth prospects may be adversely andmaterially affected.

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Our future performance depends in part on support from our platform partners,particularly copyright content providers and MCNs.

Although most of the content on our platform come from individual users, platform partnershave become an increasingly important source of high-quality content. We believe userengagement with our products and services depends in part on the quality of applications andcontent generated by our platform partners, particularly copyright content providers and theMCNs. Copyright content providers have traditionally been an important source of premiumcontent on our platform. Meanwhile, as content on our platform expands into various newformats, such as short videos, the role of MCNs as talent agencies for professional contentcreators is becoming increasingly important. We have built a large network of MCNs indifferent domains, such as video and e-commerce, and we rely on these platform partners toincubate and grow content creators so that they share more quality content on Weibo. If we areunable to enjoy continued collaboration with copyright content providers and expand ournetwork of MCNs and incentivize them to share more content, our content offerings may notbe as robust and competitive and our user base and user engagement may be adversely andmaterially affected.

We also work closely with third-party developers to build Weibo-integrated applications toenhance Weibo’s functionalities. Such existing and prospective developers may not besuccessful in building, growing, or monetizing mobile and/or web applications that create,maintain and enhance user engagement. Additionally, developers may choose to build on otherplatforms rather to integrate with Weibo. We are continuously seeking to balance thedistribution objectives of our developers with our desire to provide an optimal user experience,and we may not be successful in achieving a balance that continues to attract and retain suchdevelopers. If we are not successful in our efforts to continue to grow the number of developersthat choose to build products that integrate with Weibo or if we are unable to continue to buildand maintain good relationships with such developers, our user growth and user engagementand our financial results may be adversely and materially affected.

Our new products, services and initiatives and changes to existing products, services andinitiatives could fail to attract users and customers or generate revenues.

Our ability to increase the size and engagement of our user base, attract customers and generaterevenues will depend in part on our ability to successfully launch new products and services.We may introduce significant changes to our existing products and services or develop andintroduce new products and services, including technologies with which we have little or noprior development or operating experience. If new or enhanced products or services fail toengage users, customers and platform partners, we may fail to attract or retain users or togenerate sufficient revenues to justify our investments, and our business and operating resultscould be adversely affected. In addition, we may launch strategic initiatives that do not directlygenerate revenues but which we believe will enhance our attractiveness to users, customers andplatform partners. We may not be successful in future efforts to generate revenues from ournew products or services. If our strategic initiatives do not enhance our ability to monetize ourexisting products and services or enable us to develop new approaches to monetization, we maynot be able to maintain or grow our revenues or recover any associated development costs andour operating results may be adversely affected.

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If we fail to effectively manage our growth, our business and operating results could beharmed.

We operate our business in a rapidly evolving industry and highly competitive market, whichwill continue to place significant demands on our management, operational and financialresources to sustainably grow our business. We may encounter difficulties as we establish andexpand our operations, product development, sales and marketing, and general andadministrative capabilities. We face significant competition for talented employees from otherhigh-growth companies, which include both publicly traded and privately held companies, andwe may not be able to hire new employees quickly enough to meet our needs. To attract highlyskilled personnel, we have had to offer, and believe we will need to continue to offer,competitive compensation packages. As we continue to grow, we are subject to the risks ofover-hiring, over-compensating our employees and over-expanding our operatinginfrastructure, and to the challenges of integrating, developing and motivating a growingemployee base. In addition, we may not be able to innovate or execute as quickly as a smallerand more efficient organization. If we fail to effectively manage our hiring needs andsuccessfully integrate our new hires, our efficiency and ability to meet our forecasts and ouremployee morale, productivity and retention could suffer, and our business and operatingresults could be adversely affected.

As we strive to broaden our user base, increase user engagement, and develop new features andproducts, we often have to proactively devote significant resources to accommodate futuregrowth and to meet market demand. If market condition changes or we misjudged futuredemand, however, we may incur high costs and expenses relative to our return, which couldnegatively affect our operating results. In addition, copyright content is costly and thecompetition for it is fierce. Mismanagement of copyright content purchase and usage, such asfocus on content that turn out to be less popular or loss of valuable copyright content tocompetitors, may lead to a disproportional increase in expenses and adversely affect ourbusiness.

Continued growth could also strain our ability to maintain reliable service levels for our usersand customers, develop and improve our operational, financial, legal and management controls,and enhance our reporting systems and procedures. Our expenses may grow faster than ourrevenues, and our expenses may be greater than what we anticipate. Managing our growth willrequire significant expenditures and allocation of valuable management resources. If we fail toachieve the necessary level of efficiency in our organization as it grows, our business,operating results and financial condition could be harmed.

Our operating results may fluctuate from quarter to quarter, which makes it difficult topredict.

Our quarterly operating results have fluctuated in the past and will fluctuate in the future. Asa result, our past quarterly operating results are not necessarily indicators of futureperformance. Our operating results in any given quarter can be influenced by numerous factors,many of which we are unable to predict or are outside of our control, including:

• our ability to grow our user base and user engagement;

• fluctuations in spending by our advertising and marketing customers, including as a resultof seasonality, major events and extraordinary news events, pandemics or other factors;

• our ability to attract and retain advertising and marketing customers;

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• the occurrence of planned or unplanned significant events, including events that maycause substantial stock-based compensation or other charges;

• the development and introduction of new products or services or changes in features ofexisting products or services;

• the impact of competitors or competitive products and services;

• the pricing of our products and services;

• our ability to maintain or increase revenues;

• our ability to maintain or improve gross margins, operating margins and net margins;

• increases in our costs and expenses that we may incur to grow and expand our operationsand to remain competitive;

• system failure or outages, which could prevent us from displaying advertisements for anyperiod of time;

• changes in U.S. GAAP and the related policies, guidance or interpretations;

• changes in the legal or regulatory environment or proceedings, including with respect tosecurity, privacy or enforcement by government regulators, including fines, orders orconsent decrees; and

• changes in Chinese or global business or macroeconomic conditions.

Given our limited operating history and the rapidly evolving market in which we compete, ourhistorical operating results may not be useful to you in predicting our future operating results.Our limited operating history and our rapid growth make it difficult for us to identify recurringseasonal trends in our business. The advertising industry in China experiences seasonality.Historically, advertising spending tends to be the lowest in the first quarter of each calendaryear due to long holidays around the Lunar New Year, and we believe that this seasonalityaffects our quarterly results. In addition, economic concerns continue to create uncertainty andunpredictability and add risk to our future outlook. An economic downturn in China or globallycould cause our advertising and marketing customers to reduce their advertising budgets, andresult in other adverse effects that could harm our operating results. Other factors that maycause our operating results to fluctuate include popular sports events, such as the FIFA WorldCup and the Olympic Games. Due to our rapid growth and limited operating history, theseasonal trends that we have experienced in the past may not apply to, or be indicative of, ourfuture operating results.

Spam could diminish the user experience on our platform, which could damage ourreputation and deter our current and potential users from using our products andservices.

“Spam” on Weibo refers to a range of abusive activities that are prohibited by our terms ofservice and is generally defined as unsolicited actions that negatively impact other users withthe general goal of drawing user attention to a given account, site, product or idea. Thisincludes posting large numbers of unsolicited mentions of a user, duplicate feeds, misleadinglinks (e.g., to malware or click-jacking pages) or other false or misleading content, andaggressively following and un-following accounts, sending unsolicited invitations, reposting

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feeds and favoring feeds to inappropriately attract attention. Our terms of service also prohibitthe creation of serial or bulk accounts, both manually or using automation, for disruptive orabusive purposes, such as to post spam or to artificially inflate the popularity of users seekingto promote themselves on Weibo. Although we continue to invest resources in reducing spamon Weibo, we expect spammers will continue to seek ways to act inappropriately on ourplatform. In addition, we expect that increases in the number of users on our platform willresult in increased efforts by spammers to misuse our platform. We continuously combat spam,including by suspending or terminating accounts we believe to be spammers and launchingalgorithmic changes focused on curbing abusive activities. Our actions to combat spam requirethe diversion of significant time and focus of our engineering team from improving ourproducts and services. If we are unable to effectively manage and reduce spam on Weibo, ourreputation for delivering relevant content could be damaged, user engagement could declineand our operational costs could increase.

We are subject to changing laws and regulations regarding regulatory matters, corporategovernance and public disclosure that have increased both our costs and the risk ofnon-compliance.

We are subject to rules and regulations by various governing bodies, including, for example,the Securities and Exchange Commission, which is charged with the protection of investors andthe oversight of companies whose securities are publicly traded, and the various regulatoryauthorities in China and the Cayman Islands, and to new and evolving regulatory measuresunder applicable law. Our efforts to comply with new and changing laws and regulations haveresulted in and are likely to continue to result in, increased general and administrative expensesand a diversion of management time and attention from revenue-generating activities tocompliance activities.

Moreover, because these laws, regulations and standards are subject to varying interpretations,their application in practice may evolve over time as new guidance becomes available. Thisevolution may result in continuing uncertainty regarding compliance matters and additionalcosts necessitated by ongoing revisions to our disclosure and governance practices. If we failto address and comply with these regulations and any subsequent changes, we may be subjectto penalty and our business may be harmed.

Privacy concerns relating to our products and services and the use of user informationcould damage our reputation, deter current and potential users and customers from usingWeibo and negatively impact our business.

We collect personal data from our users in order to better understand our users and their needsand to help our customers target specific demographic groups. Concerns about the collection,use, disclosure or security of personal information or other privacy-related matters, even ifunfounded, could damage our reputation, cause us to lose users and customers and adverselyaffect our operating results. While we strive to comply with applicable data protection laws andregulations, as well as our own posted privacy policies and other obligations we may have withrespect to privacy and data protection, the failure or perceived failure to comply may result,and in some cases has resulted, in inquiries and other proceedings or actions against us bygovernment agencies or others, as well as negative publicity and damage to our reputation andbrand, each of which could cause us to lose users and customers, which could have an adverseeffect on our business.

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Any systems failure or compromise of our security that results in the unauthorized access toor release of our users’ or customers’ data could significantly limit the adoption of our productsand services, as well as harm our reputation and brand and, therefore, our business. We strictlylimit third-party developers’ access to user privacy and user data, and we expend significantresources on technology and product development to protect against leakage of userinformation and other security breaches. Nonetheless, given its great commercial value, ouruser data may still be misused by third-parties, which could expose us to legal and regulatoryrisks and seriously harm our business.

The PRC regulatory and enforcement regime with regard to data security and data protectionis evolving. The PRC Civil Code (《中華人民共和國民法典》), the PRC Cyber Security Law(《中華人民共和國網絡安全法》), the Personal Information Protection Law (《個人信息保護法》) and the PRC Data Security Law (《數據安全法》) protect individual privacy andpersonal data security in general by requiring internet service providers to collect data inaccordance with the laws and in proper manner, and obtain consents from internet users priorto the collection, use or disclosure of internet users’ personal data. See “Regulatory Overview— Regulations on Information Security” and “Regulatory Overview — Regulations on InternetPrivacy.” In addition, the Cyber Security Law sets high requirements for the operationalsecurity of facilities deemed to be part of China’s “critical information infrastructure.” See“Risk Factors — Risks Relating to Doing Business in the People’s Republic of China —Substantial uncertainties exist with respect to the interpretation and implementation ofcybersecurity related regulations and cybersecurity review as well as any impact these mayhave on our business operations.” We have been advised by our PRC Legal Adviser that theselaws and regulations are relatively new, and therefore there are substantial uncertainties withrespect to the interpretation and implementation of these data security laws and regulations.Weibo may need to adjust its business to comply with data security requirements from time totime. Weibo has taken measures to comply with existing laws and regulations, see “Business— Risk Management and Internal Control — Data and technology system risk management.”

Furthermore, if privacy concerns or regulatory restrictions prevent us from sellingdemographically targeted advertising, we may become less attractive to our customers. In HongKong, however, the Personal Data (Privacy) Ordinance provides that an internet company maynot collect information about its users, analyze the information for a profile of the user’sinterests and sell or transmit the profiles to third parties for direct marketing purposes withoutthe user’s consent. In the European Union, or EU, the General Data Protection Regulation, orGDPR, which came into effect on May 25, 2018, present increased challenges and risks inrelation to policies and procedures relating to data collection, storage, transfer, disclosure,protection and privacy, and will impose significant penalties for non-compliance, including forexample, penalties calculated as a percentage of global revenue under the GDPR. The potentialrisks associated with non-compliance therewith are difficult to predict. Other jurisdictions mayhave similar prohibitions. Although less than 1% of our revenues in 2020 are generated in HongKong, EU and other jurisdictions with similar prohibitions, we hope to attract more users inthese jurisdictions and if we are unable to construct demographic profiles of internet usersbecause they refuse to give consent, we will be less attractive to customers and our businesscould suffer.

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In addition to the possibility of fines, enforcement actions can result in orders requiring us tochange our practices, which could have an adverse effect on our business and operating results.In March 2020, we experienced a data leakage caused by malicious queries by users throughour application programming interface, for which the Ministry of Industry and InformationTechnology, or the MIIT summoned our representatives to a meeting on March 21, 2020 andinstructed us to take steps to improve data security in accordance with the applicableregulations, including improving our privacy policy, strengthening user information protectionand internal data security management, and other measures. We immediately took measures inresponse to this incident, including upgrading our security interface.

Since January 2019, in order to better implement the PRC Cyber Security Law (《網絡安全法》and the PRC Law for the Protection of Consumer Rights and Interests (《消費者權益保護法》), relevant PRC government departments jointly launched nationwide specialrectification programs on the illegal collection and use of personal information by mobile appseach year. In the 2020 Special Rectification Program, launched on July 22, 2020 by thecyberspace Administration of China, the MIIT, the Ministry of Public Security, and the StateAdministration for Market Regulation, and focusing on identifying and rectifying conducts ofvarious apps in illegal collection of personal facial features and other biometric information,unauthorized recording of users’ voice or access of users’ photos, and unauthorized uploadingof personal information, Weibo was identified by the authorities as having misled users toagree to the collection of personal information and failed to list out the purpose and type ofpersonal information collected by certain software development kits on its platforms inNovember 2020. Weibo took actions in response to the identified issues and completed therectification as required. On July 23, 2021, MIIT launched the 2021 Special RectificationProgram aiming at rectifying disruption of market order, infringement on users’ rights andinterests, threaten on data security, and violation of relevant regulations on qualifications andresources management by the internet companies, for which Weibo, together with 24 othermajor internet companies, attended a meeting about the 2021 Special Rectification Program onInternet Industry held by the MIIT on July 30, 2021, to discuss and receive instructionsregarding self-examination and self-rectification under the Special Rectification Program. Therectification procedures generally include three steps: first, our company to conduct aself-examination and self-rectification and deliver a report to the relevant governmentauthority for review; second, the government authority to provide comments on the report andguidance for our company to achieve compliance with the relevant PRC laws and regulations;and third, the government will make an inspection and confirm the rectification results. Weibohas initiated a self-examination and self-rectification and submitted the report as requiredunder the 2021 Special Rectification Program, which is under the review of governmentauthority.

New laws or regulations concerning data protection, or the interpretation and application ofexisting consumer and data protection laws or regulations, which is often uncertain and in flux,may be inconsistent with our practices. Complying with new laws, regulations and orders fromcompetent governmental authorities could cause us to incur substantial costs or require us tochange our business practices in a manner materially adverse to our business.

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If our security measures are breached, or if our products and services are subject toattacks that degrade or deny the ability of users to access our products and services, ourproducts and services may be perceived as not being secure, users and customers maycurtail or stop using our products and services and our business and operating resultsmay be harmed.

Our products and services involve the storage and transmission of users’ and customers’information, and security breaches expose us to a risk of loss of this information, litigation andpotential liability. We experience cyber-attacks of varying degrees on a regular basis, includinghacking into our user accounts and redirecting our user traffic to other websites, and we havebeen able to rectify attacks without significant impact to our operations in the past. Functionsthat facilitate interactivity with other websites, such as Weibo Connect, which among otherthings allows users to log in to partner websites using their Weibo identities, could increase thescope of access of hackers to user accounts.

Our security measures may also be breached due to employee error, malfeasance or otherwise.Additionally, outside parties may attempt to fraudulently induce employees, users or customersto disclose sensitive information in order to gain access to our data or our users’ or customers’data or accounts, or may otherwise obtain access to such data or accounts.

Since our users and customers may use their Weibo accounts to establish and maintain onlineidentities, unauthorized communications from Weibo accounts that have been compromisedmay damage their reputations and brands as well as ours. Any such breach or unauthorizedaccess could result in significant legal and financial exposure, damage to our reputation and aloss of confidence in the security of our products and services that could have an adverse effecton our business and operating results. Because the techniques used to obtain unauthorizedaccess, disable or degrade service or sabotage systems change frequently and often are notrecognized until launched against a target, we may be unable to anticipate these techniques orto implement adequate preventative measures. If an actual or perceived breach of our securityoccurs, the market perception of the effectiveness of our security measures could be harmed,we could lose users and customers and we may be exposed to significant legal and financialrisks, including legal claims and regulatory fines and penalties. Any of these actions could havea material and adverse effect on our business, reputation and operating results.

We rely on assumptions and estimates to calculate certain key operating metrics, and realor perceived inaccuracies in such metrics may harm our reputation and negatively affectour business.

The numbers of daily and monthly active users of Weibo, average spending per advertiser andnumber of advertisement customers are calculated using internal company data that has notbeen independently verified. While these numbers are based on what we believe to bereasonable calculations for the applicable periods of measurement, there are inherentchallenges in measuring usage and user engagement across our large user base. For example,there are a number of false or spam accounts in existence on Weibo. Although we continuouslycombat spam by suspending or terminating these accounts, our active user number may includea number of false or spam accounts and therefore may not accurately represent the actualnumber of active accounts. We treat each account as a separate user for purposes of calculatingour active users, because it may not always be possible to identify people and organizationsthat have set up more than one account. Additionally, some accounts used by organizations areused by many people within the organization. Accordingly, the calculations of our active usersmay not accurately reflect the actual number of people or organizations using Weibo.

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We regularly review and may adjust our processes for calculating our internal metrics toimprove their accuracy. Our measures of user growth and user engagement may differ fromestimates published by third parties or from similarly titled metrics used by our competitorsdue to differences in methodology. If customers, platform partners or investors do not perceiveour user metrics to be accurate representations of our user base or user engagement, or if wediscover material inaccuracies in our user metrics, our reputation may be harmed andcustomers and platform partners may be less willing to allocate their spending or resources toWeibo, which could negatively affect our business and operating results.

Our business is highly sensitive to the strength of our brand and market influence, andwe may not be able to maintain current or attract new users, customers and platformpartners for our products and services if we do not continue to increase the strength ofour brand and develop new brands successfully in the marketplace.

Our operational and financial performance is highly dependent on the strength of our brand andmarket influence. Such dependency will increase further as the number of internet and mobileusers as well as the number of market entrants in China grows. In order to retain existing andattract new internet users, customers and platform partners, we may need to substantiallyincrease our expenditures to create and maintain brand awareness and brand loyalty.

In addition, we receive a high degree of media coverage in Chinese communities around theworld. Negative coverage in the media of our company, including about our product quality andreliability, changes to our products and services, privacy and security practices, litigation,regulatory activity, the actions of our users, the experience of our users, platform partners andadvertisers with our products and services, alleged misconduct by our employees or businesspartners, unethical business practices, or rumors relating to our business, management andemployees, our shareholders and affiliates, our competitors and peers, even if inaccurate, couldthreaten our reputation and the perception of our brands. We cannot assure you that we will beable to defuse negative press coverage about our company to the satisfaction of our investors,users, customers and platform partners. If we are unable to defuse negative press coverageabout our company, our brand may suffer in the marketplace, our operational and financialperformance may be negatively impacted and the price of our Class A ordinary shares and/orADSs may decline.

User misconduct and inappropriate content may adversely impact our brand image,business and results of operations, and we may be held liable for information or contentdisplayed on, retrieved from or linked to our app or website or distributed to our users.

Our platform enables users to discover, create, and distribute content and interact with otherson our platform in real time. As it is difficult to control user behavior in real time, our platformmay be misused by individuals or groups of individuals who engage in, among other things,immoral, inappropriate, disrespectful, fraudulent or illegal activities. While we have developedtechnologies and a series of measures to detect inappropriate content and activities, we cannotguarantee that we will be able to fully prevent inappropriate content from being posted on ourplatform or inappropriate activities from being carried out on our platform. Moreover, as wehave limited control over the offline behavior of our users, to the extent that such behavior isassociated with our platform, our ability to protect our brand image and reputation may belimited. Our business and the public perception of our brand may be materially and adverselyaffected by misconduct conducted on or linked to our platform. It is possible that our users mayengage in conversations or activities on our platform that may be deemed illegal underapplicable laws and regulations. We may be subject to fines or other disciplinary actions,

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including suspension of certain services, if we are deemed to not have taken actions to stop usermisconduct or the display of inappropriate or illegal content posted by third parties on ourplatform or distributed to our users. If any of our users suffers or alleges to have sufferedphysical, financial or emotional harm arising from any contact initiated on our platform, wemay face civil lawsuits or other proceedings initiated by the affected user, or governmental orregulatory actions. Defending such actions could be costly and involve significant time andattention of our management and other resources, which could materially and adversely affectour business, financial condition, results of operations and prospects. There can be noassurance that we can detect all illegal or inappropriate content displayed on, retrieved fromor linked to our platform. If we are held liable for any of the aforementioned incidents in thefuture, our business, financial condition and results of operations may be materially andadversely affected.

Misconduct, error and failure to follow laws, regulations and our corporate governancepolicies by our employees may adversely impact our brand image, reputation, businessand results of operations, and we may be held liable for these inappropriate activities.

Misconduct, including illegal, fraudulent or collusive activities, unauthorized businessconducts and behavior, misuse of corporate authorization, or errors by our employees or theirfailure to perform their duties could subject us to legal liability and negative publicity. Ouremployees may conduct fraudulent activities to bypass our internal systems and to completeshadow transactions and/or transactions outside our official or authorized procedures. Theymay conduct activities in violation of law against unfair competition, which may expose us tounfair competition allegations and risks or conduct activities that may damage our reputation,corporate culture or internal working environment. We have experienced such incidents in thepast and may continue to experience or be subject to incidents of similar nature in the future.We terminated employment with the involved employees for serious misconducts andrecovered our losses from those employees in certain cases. While we have been strengtheningour code of conduct and related internal policies, including updating our employees’ code ofconduct and anti-bribery policy, we cannot assure you that such incidents will not occur in thefuture. It is not always possible to identify and deter such misconduct, and the precautions wetake to detect and prevent these activities may not be effective in controlling unknown orunmanaged risks or losses or in protecting us from governmental investigations or other actionsor lawsuits stemming from a failure to prevent such misconduct. Such misconduct coulddamage our brand and reputation, which could adversely affect our business and results ofoperations.

If our goodwill or intangible assets become impaired, we may be required to record asignificant charge to earnings.

We review our intangible assets for impairment when events or changes in circumstancesindicate that the carrying value may not be recoverable, such as a decline in stock price andmarket capitalization. We test goodwill for impairment at least once a year. If such goodwillor intangible assets are deemed to be impaired, an impairment loss equal to the amount bywhich the carrying amount exceeds the fair value of the assets would be recognized. We maybe required to record a significant charge in our financial statements during the period in whichany impairment of goodwill or intangible assets is determined, which would negatively affectour results of operations. We recorded an impairment charge of US$10.6 million for thegoodwill arising from certain game business acquisitions under value-added services segmentdue to failure in meeting forecasted financial performance that supports goodwill withoutprospect of recovering in 2018, and no impairment provision for goodwill and intangible assetswas recorded for the rest of Track Record Period.

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As of June 30, 2021, the total amount of our goodwill and intangible assets was US$270.8million. A substantial portion of the goodwill and intangible assets arose from the acquisitionsof the live streaming business of www.yizhibo.com, or Yizhibo, a live streaming platform inChina, in 2018 from Yixia Tech Co., Ltd., or Yixia Tech and Shanghai Jiamian InformationTechnology Co., Ltd., or JM Tech, in 2020, as well as the indirect acquisition of ShanghaiBenqu Network Technology Co., Ltd., the Wuta beauty camera app developer, in the secondquarter of 2021. Therefore, we may have to reassess and even record impairment loss if therespective industry prospects deteriorate.

The monetization of our services may require users to accept promoted marketing in theirfeeds or private messages, which may affect user experience and cause a decline in usertraffic and a delay in our monetization.

Weibo users typically can log in to their personal accounts to view feeds and private messagesfrom accounts that they have selected to follow. Social platform has been subject to negativecomments, and even lawsuits, for introducing promoted advertising into their users’information feeds. We started to test promoted products on Weibo at the end of 2012 and havealso received user complaints. If we are unable to address user complaints adequately, userexperience may be negatively affected, the monetization of our products and services may bedelayed and our user base or user engagement may decline, which may adversely impact ouroperations.

New technologies could block our advertisements. Users of PC and mobile devices mayenable technical measures that could hinder our traffic growth and limit our monetizationopportunities.

Technologies have been developed that can disable the display of our advertisements and thatprovide tools to users to opt out of our advertising products. Most of our revenues are derivedfrom fees paid to us by customers in connection with the display of advertisements to our users.In addition, our traffic growth is significantly dependent on content viewed via mobile devices,such as smartphones and tablets. Technologies and tools for personal computers and mobiledevices, such as operating systems, internet browsers, anti-virus software and otherapplications, as well as mobile application stores could set up technical measures to divert usertraffic, require a fee for the download of our products or block our products and servicesaltogether, which could adversely affect our overall traffic and ability to monetize our productsand services.

Our business and growth could suffer if we are unable to hire and retain key personnel.

We depend on the continued contributions of our senior management and other key employees,many of whom are difficult to replace. The loss of the services of any of our executive officersor other key employees could harm our business. Competition for qualified talent in China isintense. Our future success is dependent on our ability to attract a significant number ofqualified employees and retain existing key employees. If we are unable to do so, our businessand growth may be materially and adversely affected and the trading price of our Class Aordinary shares and/or ADSs could suffer. Our need to significantly increase the number of ourqualified employees and retain key employees may cause us to materially increasecompensation-related costs, including stock-based compensation.

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We have incurred and expect to continue to incur substantial stock-based compensationexpenses.

We have adopted share incentive plans in August 2010 and March 2014. See “Directors andSenior Management — Compensation — Share Incentive Plans” for a detailed discussion. Forthe years ended December 31, 2018, 2019, 2020 and for the six months ended June 30, 2021,we recorded US$41.0 million, US$61.3 million, US$67.1 million and US$36.2 million,respectively, in stock-based compensation expenses. We will continue to grant stock-basedcompensation in the future in order to attract and retain key personnel and employees.Consequently, our stock-based compensation expenses may be recurring and even significantlyincrease in absolute amount, which may have a material adverse effect on our results ofoperations.

Future investments in and acquisitions of complementary assets, technologies andbusinesses may fail and may result in equity or earnings dilution.

We have in the past and may continue to invest in or acquire assets, technologies andbusinesses that are complementary to our existing business. Our investments or acquisitionsmay not yield the results we expect. In addition, investments and acquisitions could result inthe use of substantial amounts of cash, potentially dilutive issuances of equity securities,significant amortization expenses related to intangible assets and exposure to potentialunknown liabilities of the acquired business. Moreover, the cost of identifying andconsummating investments and acquisitions, and integrating the acquired businesses into ours,may be significant, and the integration of acquired businesses may be disruptive to our existingbusiness operations. In addition, we may have to obtain approval from the relevant PRCgovernmental authorities for the investments and acquisitions and comply with any applicablePRC rules and regulations, which may be costly. Our investments and acquisitions may also besubject to merger control review and antitrust investigations under the PRC Anti-MonopolyLaw, the Interim Provisions on the Review of Concentrations of Undertakings and other PRCanti-monopoly laws, regulations and guidance. In the event that our investments andacquisitions are not successful, our financial condition and results of operations may bematerially and adversely affected.

Delay or failure of payment by our customers could harm our cash flows and profitability.

We are subject to credit risk arising from our accounts receivable from our customers. Ouraccounts receivable primarily include amounts due in one year or less from advertisingcustomers. As of December 31, 2018, 2019 and 2020 and June 30, 2021, our accountsreceivable due from third parties, net of respective allowances, were US$190.0 million,US$262.2 million, US$314.2 million and US$467.2 million, respectively. If any of ourcustomers’ cash flow, working capital, financial condition or results of operations deteriorates,it may be unable, or it may otherwise be unwilling, to pay accounts receivables owed to uspromptly or at all. Any substantial default or delay of a customer’s payment obligations maymaterially and adversely affect our working capital, financial condition and results ofoperations. As of 31 December 2018, 2019 and 2020 and June 30, 2021, our accountsreceivable due from Alibaba, net of respective allowances, were US$48.2 million, US$60.4million, US$135.3 million and US$123.0 million, respectively. Any substantial default or delayof Alibaba’s payment obligations may materially and adversely affect our working capital,financial condition and results of operations.

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We might not be able to fulfil our obligation in respect of deferred revenue, which mighthave impact on our cash or liquidity position.

Our deferred revenues related to unsatisfied performance obligations at the end of the periodare mainly from the customer advance of the advertising and marketing services and the salesof the fee-based services, such as VIP membership, live streaming, and virtual currency orin-game virtual items sold for game related services. The deferred revenues are recognizedbased on customers’ consumption or amortized on a straight-line basis through the serviceperiod for different products/services. As of December 31, 2018, 2019 and 2020 and June 30,2021, the balance of our deferred revenues were US$100.0 million, US$108.8 million,US$143.7 million, and US$146.1 million, respectively. Due to the generally short-termduration of the contracts, the majority of the performance obligations are satisfied in thefollowing reporting period. However, deferred revenue at any particular date may not berepresentative of actual revenue for any current or future period. Any failure to fulfil theobligations in respect of deferred revenue may have an adverse impact on our results ofoperations and liquidity.

We may face credit risk for our amount due from SINA.

Accounts receivable amounts directly related to Weibo but for which SINA will receivepayments and remit payments to us, as well as accounts receivable directly from SINA areincluded in the amount due from SINA. Our amount due from SINA increased from US$105.3million as of December 31, 2018, to US$384.8 million as of December 31, 2019, and furtherto US$548.9 million as of December 31, 2020. We recorded US$498.6 million of amount duefrom SINA as of June 30, 2021. As of December 31, 2018, 2019, 2020 and June 30, 2021, theamount due from SINA also included loans to and interest receivable from SINA of US$43.6million at an annual interest rate of 4.8%, US$236.6 million at an annual interest rate of 4.5%,US$547.9 million and US$480.7 million at annual interest rates ranging from 1.0% to 4.5% ofmaturity within one year, respectively. For a detailed description, see “Related PartyTransactions — Transactions with SINA.”

We cannot assure you that we will be able to collect payment fully and in a timely manner onour existing and future outstanding amount due from SINA. Our failure to collect paymentwould adversely impact our business operations and financial positions.

Our financial results could be adversely affected by our long-term investments.

We periodically review our investments in publicly traded companies, privately heldcompanies, and limited partnerships for impairment. If we conclude that any of theseinvestments is impaired, we will write down the asset to its fair value and take a correspondingcharge to our consolidated statements of comprehensive income. For the fiscal years endedDecember 31, 2018, 2019, 2020 and the six months ended June 30, 2021, we recognizedimpairment charges of US$23.6 million, US$230.9 million, US$126.8 million and US$66.6million, respectively, on the carrying value of our investments. We may continue to incurimpairment charges in the future, which could depress our profitability or subject us to incura net loss.

As of June 30, 2021, our investments included US$881.7 million in private companies, whichmay not have the resources nor level of controls in place like public companies to timely andaccurately provide updates about their company to us. Furthermore, many of our investmentsare at an early, pre-revenue stage of development, and their impairment may be difficult toassess as market information on internet-related startups is not readily available. After our

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adoption of ASU 2016-01 “Classification and Measurement of Financial Instruments” startingJanuary 1, 2018, we measure long-term investments other than equity method investments atfair value through earnings. Our investments other than equity method are subject to a widevariety of market related risks that could substantially reduce or increase the fair value of ourholdings. For example, identification of observable price change in orderly transaction forthose investments without readily determinable fair value may result in our recognition of gainor loss on such investments.

Determination of estimated fair value of these investments require complex and subjectivejudgments due to their limited financial and operating history, unique business risks andlimited public information. Consequently, we may not receive information about ourinvestments on a timely basis to properly account for them. We recognized a net loss ofUS$69.5 million for the six months ended June 30, 2021 as a result of fair value changes. Weare unable to control these factors and an impairment charge recognized by us, especiallyuntimely recorded, may adversely impact our financial results and share price.

Fluctuation of fair value change of short-term investments may affect our financialposition.

During the Track Record Period, we have spent a portion of our capital in short-terminvestments, which represent bank time deposits and certain wealth management products. Forwealth management products whose interest rates are indexed to performance of the underlyingassets, we carried these investments at fair value. We measure the fair value of our short-terminvestments on a recurring basis and the fair value of our short-term investments aredetermined based on the quoted market price for similar products. Changes in fair value arereflected in our consolidated statements of income.

Any change in securities prices and market conditions could lead to volatility in the fair valuesof our short-term investments accounted for at fair value, which could impact our financialcondition and results of operations and may also impact our ability to dispose of theseinvestments at favorable prices.

If we cannot obtain sufficient cash when we need it, we may not be able to meet ourpayment obligations under our notes.

In October 2017, we issued US$900 million principal amount of convertible senior notes due2022, which we refer to as 2022 Notes in this document. The 2022 Notes bear an annualinterest rate of 1.25%, payable semiannually in arrears on May 15 and November 15 of eachyear, beginning on May 15, 2018, and will mature on November 15, 2022. In July 2019, weissued US$800 million in aggregate principal amount of senior notes due 2024, which we referto as 2024 Notes in this document. The 2024 Notes were issued at par value and bear an annualinterest rate of 3.50%, payable semiannually in arrears on January 5 and July 5 of each year,beginning on January 5, 2020. The 2024 Notes will mature on July 5, 2024, unless previouslyrepurchased or redeemed in accordance with their terms prior to maturity. In July 2020, weissued US$750 million in aggregate principal amount of senior notes due 2030, which we referto as 2030 Notes in this document. The 2030 Notes bear an annual interest rate of 3.375%,payable semiannually in arrears on January 8 and July 8 of each year, beginning on January 8,2021. The 2030 Notes will mature on July 8, 2030, unless previously repurchased or redeemedin accordance with their terms prior to maturity. We may not have sufficient funds to pay theinterest or fulfill other obligations under these notes.

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We derive most of our revenues from, and hold most of our assets through, our subsidiaries.As a result, we may rely in part upon distributions and advances from our subsidiaries in orderto help us meet our payment obligations under the notes and our other obligations. Oursubsidiaries are distinct legal entities and do not have any obligation, legal or otherwise, toprovide us with distributions or advances. We may face tax or other adverse consequences, orlegal limitations, on our ability to obtain funds from these entities. In addition, our ability toobtain external financing in the future is subject to a variety of uncertainties, including:

• our financial condition, results of operations and cash flows;

• general market conditions for financing activities by internet companies; and

• economic, political and other conditions in the PRC and elsewhere.

If we are unable to obtain funding in a timely manner or on commercially acceptable terms, wemay not be able to meet our payment obligations under our convertible notes. If we fail to payinterest on the notes, we will be in default under the indenture governing the notes, which inturn may constitute a default under existing and future agreements governing our indebtedness.

We may need additional capital, and financing may not be available on terms acceptableto us, or at all.

We may require additional cash resources if we experience changes in business conditions orother developments. In addition to the 2022 Notes, 2024 Notes and 2030 Notes, we may seekto issue equity or equity linked securities or obtain debt financing. The issuance and sale ofadditional equity would result in further dilution to our shareholders. The incurrence ofindebtedness would result in increased fixed obligations and could result in operatingcovenants that would restrict our operations. We cannot assure you that financing will beavailable in amounts or on terms acceptable to us, if at all.

Many of our products and services contain open source software, and we license some ofour software through open source projects, which may pose particular risks to ourproprietary software, products, and services in a manner that could have a negative effecton our business.

We use open source software in our products and services and will use open source softwarein the future. In addition, from time to time, we contribute software source code to open sourceprojects under open source licenses or release internal software projects under open sourcelicenses, and anticipate doing so in the future. The terms of many open source licenses to whichwe are subject have not been interpreted by domestic or foreign courts, and there is a risk thatopen source software licenses could be construed in a manner that imposes unanticipatedconditions or restrictions on our ability to provide or distribute our products or services.Additionally, we may from time to time face claims from third parties claiming ownership of,or demanding release of, the open source software or derivative works that we developed usingsuch software, which could include our proprietary source code, or otherwise seeking toenforce the terms of the applicable open source license. These claims could result in litigationand could require us to make our software source code freely available, purchase a costlylicense or cease offering the implicated products or services unless and until we canre-engineer them to avoid infringement. This re-engineering process could require significantadditional research and development resources, and we may not be able to complete itsuccessfully. In addition to risks related to license requirements, use of certain open source

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software can lead to greater risks than use of third-party commercial software, as open sourcelicensors generally do not provide warranties or controls on the origin of software.Additionally, because any software source code we contribute to open source projects ispublicly available, our ability to protect our intellectual property rights with respect to suchsoftware source code may be limited or lost entirely, and we are unable to prevent ourcompetitors or others from using such contributed software source code. Any of these riskscould be difficult to eliminate or manage, and, if not addressed, could have a negative effecton our business, financial condition and operating results.

We may not be able to adequately protect our intellectual property, which could cause usto be less competitive.

We rely on a combination of patent, copyright, trademark and trade secret laws and restrictionson disclosure to protect our intellectual property rights. Despite our efforts to protect ourproprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectualproperty, seek court declarations that they do not infringe upon our intellectual property rights,or allege that certain of our products and services, or user content, infringe their intellectualproperty rights. Monitoring unauthorized use of our intellectual property is difficult and costly,and we cannot be certain that the steps we have taken will prevent misappropriation of ourintellectual property. From time to time, we may have to resort to litigation to enforce or defendour intellectual property rights, which could result in substantial costs and diversion of ourresources. For example, the Trademark Review and Adjudication Board, or TRAB, issueddecisions in June and July, 2017 to cancel the two trademarks owned by Weibo Interactive dueto the lack of the proof of use. We have appealed TRAB’s decisions through the BeijingIntellectual Property Court. On December 25, 2017, Beijing Intellectual Property Court madetwo first instance judgments, each lifting TRAB’s decision and instructing TRAB to issue newdecisions on the application for review regarding the two trademarks. On May 8, 2018, TRABissued that the trademarks are valid for all registered items including computer programs andcomputer game software.

We may be subject to intellectual property infringement claims or other allegations bythird parties for information or content displayed on, retrieved from or linked to ourplatform, or distributed to our users, which may materially and adversely affect ourbusiness, financial condition and prospects.

Companies in the internet, technology and media industries are frequently involved inlitigation based on allegations of infringement of intellectual property rights, unfaircompetition, invasion of privacy, defamation, and other violations of other parties’ rights. Inaddition, various “non-practicing entities” that own patents and other intellectual propertyrights often attempt to aggressively assert their rights in order to extract value from technologycompanies. The validity, enforceability and scope of protection of intellectual property rightsin internet-related industries, particularly in China, are uncertain and still evolving. As we faceincreasing competition and as litigation becomes more common in China in resolvingcommercial disputes, we face a higher risk of being the subject of intellectual propertyinfringement claims. Furthermore, from time to time we may introduce or acquire new productsor services, including in areas where we historically have not competed, which could increaseour exposure to patent and other intellectual property claims from competitors and non-practicing entities.

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We allow users to upload written materials, images, pictures and other content on our platformand download, share, link to and otherwise access games and applications (some of which aredeveloped by third parties) as well as audio, video and other content either on our platform orfrom other websites through our platform. We have procedures designed to reduce thelikelihood that content might be used without proper licenses or third-party consents. However,these procedures may not be effective in preventing the unauthorized posting of copyrightedcontent.

With respect to games and applications available on our platform, we have procedures designedto reduce the likelihood of infringement. However, such procedures might not be effective inpreventing games and applications, particularly those developed by third parties, frominfringing upon other parties’ rights. We may face liability for copyright or trademarkinfringement, defamation, unfair competition, libel, negligence, and other claims based on thenature and content of the materials that are delivered, shared or otherwise accessed through ourplatform.

We may receive notice from patent holders and other parties alleging that certain of ourproducts and services, or user content, infringe their intellectual property rights. Defendingintellectual property litigation is costly and can impose a significant burden on ourmanagement and employees, and there can be no assurances that favorable final outcomes willbe obtained in all cases. Such claims, even if they do not result in liability, may harm ourreputation. Any resulting liability or expenses, or changes required to our platform to reducethe risk of future liability, may have a material adverse effect on our business, financialcondition and prospects.

User growth and engagement depend upon effective interoperation with operatingsystems, networks, devices, web browsers and standards that we do not control.

We make our products and services available across a variety of operating systems and throughwebsites. We are dependent on the interoperability of our products and services with populardevices, desktop and mobile operating systems and web browsers that we do not control, suchas Windows, Mac OS, Android, iOS, and others. Any changes in such systems, devices or webbrowsers that degrade the functionality of our products and services or give preferentialtreatment to competitive products or services could adversely affect usage of our products andservices. Further, if the number of platforms for which we develop our products increases, itwill result in an increase in our costs and expenses. In order to deliver high quality productsand services, it is important that our products and services work well with a range of operatingsystems, networks, devices, web browsers and standards that we do not control. In addition,because a majority of our users access our products and services through mobile devices, weare particularly dependent on the interoperability of our products and services with mobiledevices and operating systems. We may not be successful in developing relationships with keyparticipants in the mobile industry or in developing products or services that operateeffectively with these operating systems, networks, devices, web browsers and standards. In theevent that it is difficult for our users to access and use our products and services, particularlyon their mobile devices, our user growth and user engagement could be harmed, and ourbusiness and operating results could be adversely affected.

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Our operations depend on the performance of the internet infrastructure and fixedtelecommunications networks in China.

Almost all access to the internet in China is maintained through state-ownedtelecommunication operators under the administrative control and regulatory supervision of theMinistry of Industry and Information Technology, or the MIIT. Moreover, we primarily rely ona limited number of telecommunication service providers to provide us with datacommunications capacity through local telecommunications lines and internet data centers tohost our servers. We have limited access to alternative networks or services in the event ofdisruptions, failures or other problems with China’s internet infrastructure or the fixedtelecommunications networks provided by telecommunication service providers. Web traffic inChina has experienced significant growth during the past few years. Effective bandwidth andserver storage at internet data centers in large cities such as Beijing are scarce. With theexpansion of our business, we may be required to upgrade our technology and infrastructureto keep up with the increasing traffic on our platform. We had not experienced materialdisruptions to our business operations as a result of service capacity constraints during theTrack Record Period. However, we cannot assure you that the internet infrastructure and thefixed telecommunications networks in China will be able to support the demands associatedwith the continued growth in internet usage. If we are unable to increase our online content andservice delivering capacity accordingly, we may not be able to continuously grow our traffic,and the adoption of our products and services may be hindered, which could adversely impactour business and our share price.

In addition, we have no control over the costs of the services provided by telecommunicationservice providers. If the prices we pay for telecommunications and internet services risesignificantly, our results of operations may be materially and adversely affected. Furthermore,if internet access fees or other charges to internet users increase, particularly as content shiftstoward video, some users may be prevented from accessing the internet and thus cause thegrowth of internet users to decelerate. Such deceleration may adversely affect our ability tocontinue to expand our user base and increase our attractiveness to online customers.

Our business and operating results may be harmed by service disruptions, or by ourfailure to timely and effectively scale and adapt our existing technology andinfrastructure.

One of the reasons people come to Weibo is for real-time information. We have experienced,and may in the future experience, service disruptions, outages and other performance problemsdue to a variety of factors, including infrastructure changes, human or software errors,hardware failure, capacity constraints due to an overwhelming number of people accessing ourproducts and services simultaneously, computer viruses and denial of service, fraud andsecurity attacks. Any disruption or failure in our infrastructure could hinder our ability tohandle existing or increased traffic on our platform or cause us to lose content stored on ourplatform, which could significantly harm our business and our ability to retain existing usersand attract new users.

As the number of our users increases and our users generate more content, including photos andvideos on our platform, we may be required to expand and adapt our technology andinfrastructure to continue to reliably store and analyze this content. It may become increasinglydifficult to maintain and improve the performance of our products and services, especiallyduring peak usage times, as our products and services become more complex and our usertraffic increases. In addition, because we lease our data center facilities, we cannot be assuredthat we will be able to expand our data center infrastructure to meet user demand in a timelymanner, or on favorable economic terms, or at all. We rely on SINA, our controlling

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shareholder, and third-party vendors to provide infrastructure services. We cannot assure youthat their infrastructure will operate without interruptions and that we can maintain arelationship with these parties on favorable economic terms. If our users are unable to accessWeibo or we are not able to make information available rapidly on Weibo, or at all, users maybecome frustrated and seek other channels to obtain the information, and may not return toWeibo or use Weibo as often in the future, or at all. This would negatively impact our abilityto attract users and customers and maintain the level of engagement of our users.

We prioritize product innovation and user experience over short-term operating results,which may harm our revenues and operating results.

We encourage employees to quickly develop and help us launch new and innovative features.We focus on improving the user experience for our products and services and on developingnew and improved products and services for the customers on our platform. We prioritizeinnovation and the experience for users and customers on Weibo over short-term operatingresults. We frequently make product and service decisions that may reduce our short-termoperating results if we believe that the decisions are consistent with our goals to improve theuser experience and performance for customers, which we believe will improve our operatingresults over the long term. These decisions may not be consistent with the short-termexpectations of investors and may not produce the long-term benefits that we expect, in whichcase our user growth and user engagement, our relationships with customers and our businessand operating results could be adversely and materially harmed. In addition, our focus on theuser experience may negatively impact our relationships with our existing or prospectivecustomers. This could result in a loss of customers and platform partners, which couldadversely and materially harm our revenues and operating results.

We may face lawsuits or incur liability as a result of content published, made availablethrough, or linked to our social media platform.

As a social media platform, we have faced and will continue to face liability relating to contentthat is published, made available through, or linked to our platform. In particular, the natureof our business exposes us to claims related to defamation, intellectual property rights, rightsof publicity and privacy, illegal content, content regulation and personal injury torts. The lawrelating to the liability of providers of online products or services for activities of their usersremains somewhat unsettled in China. In addition, the public nature of communications on ourplatform exposes us to risks arising from the creation of impersonation accounts intended tobe attributed to our users or customers. We could incur significant costs investigating anddefending these claims. If we incur costs or liability as a result of these events, our business,financial condition and operating results could be adversely affected.

We may be subject to litigation for user-generated content provided on our platform,which may be time-consuming and costly to defend.

Our platform is open to the public for posting user-generated content. Although we haverequired our users to post only legally compliant and inoffensive materials and have set upscreening procedures, our screening procedures may fail to screen out all potentially offensiveor non-compliant user-generated content. Even if properly screened, a third party may still finduser-generated content postings on our platform offensive and take actions against us inconnection with the posting of such information. As with other companies who provideuser-generated content on their websites, we have had to deal with such claims in the past andanticipate that such claims will increase as user-generated content becomes more popular inChina. Any such claim, with or without merit, could be time-consuming and costly to defend,and may result in litigation and divert management’s attention and resources.

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We may face certain risks related to financial products available on our Weibo wallet.

Weibo wallet enables users to purchase different types of financial products and services,including micro-loan facilitation offered by our related party, insurance, funds and otherfinancial services offered by Weibo’s business partners who are third-parties with relevantlicenses. The Chinese laws and regulations on internet finance have been developing rapidlyin recent years. To ensure the services provided on Weibo wallet remain in compliance withPRC laws and regulations on internet finance services, we have made relevant adjustments tothe services available through Weibo wallet from time to time over the past several years. Wewere not subject to any penalty or punishment with respect to our services available on Weibowallet during the Track Record Period.

For example, on March 28, 2018, the Internet Financing Risks Special Rectification WorkLeading Group under the State Council issued a Notice on Strengthening the Rectification andInspection of Asset Management Operations via Internet (《關於加大通過互聯網開展資產管理業務整治力度及開展驗收工作的通知》), which requires any entity that issues or sells fund andasset management products via the internet to obtain an asset management business license orasset management product sales license issued by the central financial managementdepartment. We have engaged third parties with relevant operating licenses to provide theservices and products legally. After our adjustments, Weibo wallet now acts as a platform for,instead of an operator of, the financial products, including micro-loan facilitation offered byour related party, insurance, funds and other financial services offered by Weibo’s businesspartners who are third parties with relevant licenses. As advised by our PRC legal adviser, suchpractice is in compliance with the current PRC laws and regulations.

On January 13, 2021, the General Office of the China Banking and Insurance RegulatoryCommission and the General Office of the People’s Bank of China jointly issued a Circular onRegulating the Personal Deposit Business Conducted by Commercial Banks through theInternet (《關於規範商業銀行通過互聯網開展個人存款業務有關事項的通知》), pursuant towhich commercial banks are not allowed to engage in the business of providing fixed depositsor time-demand optional deposits through non-self-operated online platforms. On February 19,2021, the General Office of the China Banking and Insurance Regulatory Commission issueda Circular on Further Regulating the Internet Loan Business of Commercial Banks, pursuantto which local banks engaged in online loan business shall serve local customers and are notallowed to operate online loan business outside of their registered local administrative areas,subject to certain exemptions. As such, we ceased our internet deposit cooperation withcommercial banks and delisted all internet deposit services.

On March 12, 2021, the People’s Bank of China issued the Announcement of the People’s Bankof China [2021] No.3 (《中國人民銀行公告[2021]第3號》), pursuant to which all loanproducts shall explicitly indicate their annualized loan interest rate, and we have included therequested information timely after the issuance of this announcement.

On December 7, 2020, the China Banking and Insurance Regulatory Commission issued theMeasures for the Regulation of Internet Insurance Business (《互聯網保險業務監管辦法》),effective February 1, 2021, which provides that self-operated network platforms with insurancesales or insurance application functions and information management systems shall be undersecurity protection of class III or above, with appropriate customer information protectionsystems. As such, our cooperation partner for the relevant business is preparing for anapplication for the certification of security protection of Class III for our core system andanticipate completing this before December 31, 2021. In addition, we formulated Rules onUsers’ Rights Protection of Weibo Insurance Mall to strengthen the protection of users’information and privacy rights.

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Although we believe our operation of Weibo wallet complies with relevant PRC laws andregulations in all material aspects during the Track Record Period, we cannot assure you thatthe government authorities will deem the business operation by our related party or ourthird-party business partners to be compliant with PRC laws and regulations. If any of thefinancial products or services available on Weibo wallet are found to be in violation of relevantregulations, Weibo may face warnings, fines, confiscation of illegal gains, license revocationsor the discontinuation of the relevant business, and our business, financial condition andoperating results could be adversely affected.

We have limited business insurance coverage.

The insurance industry in China is still young and the business insurance products offered inChina are limited. We have limited business liability or disruption insurance coverage for ouroperations. Any business disruption, litigation or natural disaster may cause us to incursubstantial costs and divert our resources.

We face risks related to health epidemics and other outbreaks, such as the outbreak ofCOVID-19, as well as natural disasters, which could significantly disrupt our operationsand adversely affect our business, financial condition or results of operation.

In addition to the impact of COVID-19, our business could be adversely affected by the effectsof Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, Severe Acute Respiratory Syndrome, orSARS, or other epidemics. Our business operations could be disrupted if any of our employeesis suspected of having Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, SARS, COVID-19or other epidemics, since it could require our employees to be quarantined and/or our officesto be disinfected. In addition, our results of operations and financial performance could beadversely affected to the extent that any of these epidemics harms the Chinese economy ingeneral.

In early 2020, to contain the spread of COVID-19, the Chinese government had taken certainemergency measures, including extension of the Lunar New Year holidays, implementation oftravel bans, blockade of certain roads and suspension of operation factories and businesses.These emergency measures have been significantly relaxed by the Chinese government as ofthe Latest Practicable Date. However, there has been an increasing number of COVID-19cases, including the COVID-19 Delta variant cases, in various cities in China, and the Chineselocal authorities have reinstated certain measures to keep COVID-19 in check, including travelrestrictions and stay-at-home orders. In addition, the highly-transmissible Delta variant ofCOVID-19 has caused authorities in various countries to reimpose restrictions such as maskmandates, curfews and prohibitions on large gatherings. The COVID-19 pandemic has causedmaterial negative impact to our total revenues, slower collection of accounts receivables andadditional allowance for credit losses in the year of 2020, particularly in its first half. Althoughour advertising business has gradually recovered, if the impact of COVID-19, includingsubsequent outbreaks driven by new variants of COVID-19, is prolonged or worsens further,it may still disrupt our business, which may in turn adversely affect our revenue and financialconditions. Our headquarters are located in Beijing, and we currently lease the majority of ouroffices in various parts of China to support our operations. This outbreak of communicabledisease has caused, and may cause again in the future, companies, including us and certain ofour business partners, to implement temporary adjustment of work schemes allowingemployees to work from home and adopt remote collaboration. We have taken measures toreduce the impact of this epidemic outbreak, including upgrading our telecommuting system,monitoring our employees’ health on a daily basis, arranging shifts of our employees workingonsite and from home to avoid infection transmission and optimizing our technology system tosupport potential growth in user traffic. There remain significant uncertainties surrounding

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COVID-19 and its further development as a global pandemic, including the effectiveness ofvaccine programs against existing and any new variants of COVID-19, and their impacts on ourcustomers’ advertising budget and spending more broadly. The extent to which COVID-19,including subsequent outbreaks driven by new variants of COVID-19, impacts our financialposition, results of operations and cash flows in 2021 will depend on future developments,which are highly uncertain and cannot be predicted, including new information which mayemerge concerning the severity of COVID-19, the spread of new variants, the actions to containthe coronavirus or treat its impact, the availability of vaccine and treatment for COVID-19,among others.

We are also vulnerable to natural disasters and other calamities. Fire, floods, typhoons,earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks orsimilar events may give rise to server interruptions, breakdowns, system failures, technologyplatform failures or internet failures, which could cause the loss or corruption of data ormalfunctions of software or hardware as well as adversely affect our ability to provide productsand services on our platform.

Divestitures of businesses and assets may have a material and adverse effect on ourbusiness and financial condition.

We may undertake in the future, partial or complete divestitures or other disposal transactionsin connection with certain of our businesses and assets, particularly ones that are not closelyrelated to our core focus areas or might require excessive resources or financial capital, to helpour company meet its objectives. These decisions are largely based on our management’sassessment of the business models and likelihood of success of these businesses. However, ourjudgment could be inaccurate, and we may not achieve the desired strategic and financialbenefits from these transactions. Our financial results could be adversely affected by theimpact from the loss of earnings and corporate overhead contribution/allocation associatedwith divested businesses.

Dispositions may also involve continued financial involvement in the divested business, suchas through guarantees, indemnities or other financial obligations. Under these arrangements,performance by the divested businesses or other conditions outside of our control could affectour future financial results. We may also be exposed to negative publicity as a result of thepotential misconception that the divested business is still part of our consolidated group. Onthe other hand, we cannot assure you that the divesting business would not pursue opportunitiesto provide services to our competitors or other opportunities that would conflict with ourinterests. If any conflicts of interest that may arise between the divesting business and uscannot be resolved in our favor, our business, financial condition, results of operations couldbe materially and adversely affected.

Furthermore, reducing or eliminating our ownership interests in these businesses mightnegatively affect our operations, prospects, or long-term value. We may lose access toresources or know-how that would have been useful in the development of our own business.Our ability to diversify or expand our existing businesses or to move into new areas of businessmay be reduced, and we may have to modify our business strategy to focus more exclusivelyon areas of business where we already possess the necessary expertise. We may sell ourinterests too early, and thus forego gains that we otherwise would have received had we notsold. Selecting businesses to dispose of or spin off, finding buyers for them (or the equityinterests in them to be sold) and negotiating prices for what may be relatively illiquidownership interests with no easily ascertainable fair market value will also require significantattention from our management and may divert resources from our existing business, which inturn could have an adverse effect on our business operations.

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We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements in Paragraph 3(b) of Practice Note 15 to the Hong KongListing Rules such that we are able to list a subsidiary entity on the Hong Kong StockExchange within three years of the Listing. While we currently do not have any plan withrespect to any spin-off listing on the Hong Kong Stock Exchange, we may consider a spin-offlisting on the Hong Kong Stock Exchange for one or more of our businesses within the threeyear period subsequent to the Listing. The waiver granted by the Hong Kong Stock Exchangeis conditional upon us confirming to the Hong Kong Stock Exchange in advance of any spin-offthat it would not render our Company incapable of fulfilling the eligibility requirements underRule 19C.05 of the Hong Kong Listing Rules based on the financial information of the entityor entities to be spun-off at the time of the Company’s Listing (calculated cumulatively if morethan one entity is spun-off). For additional information, see “Waivers and Exemptions — ThreeYear Restrictions to Spin-offs.”

RISKS RELATING TO OUR CARVE-OUT FROM SINA AND OUR RELATIONSHIPWITH SINA

We rely on SINA for a broad range of support and there can be no assurance that SINAwill continue to provide the same level of support.

SINA is a leading internet media company in China, and our social media business hasbenefited significantly from SINA’s strong market position in China and its expertise in bothinternet and media-related businesses. For example, our advertising and marketing revenueshave benefited from SINA’s ability to attract large brand advertisers that are interested inadvertising on the internet. Prior to our initial public offering in April 2014, SINA provided uswith financial, administrative, sales and marketing, human resources and legal services and theservices of a number of its executives and employees. After we became a stand-alone publiccompany, SINA has continued to provide us with certain support services.

Although we have entered into a series of agreements with SINA relating to our ongoingbusiness partnership and service arrangements with SINA, we cannot assure you we willcontinue to receive the same level of support from SINA going forward. To the extent thatSINA does not continue to provide us with such support, we will need to create our ownsupport systems. We may encounter operational, administrative and strategic difficulties if weare to adjust to providing these support services on our own, which may cause us to reactslower than our competitors to industry changes, may divert our management’s attention fromrunning our business or may otherwise harm our operations.

On March 22, 2021, New Wave Mergersub Limited (a wholly owned subsidiary of Sina GroupHolding Company Limited, formerly known as New Wave Holdings Limited) merged with andinto SINA, with SINA continuing as the surviving company. As a result of this merger, SINAbecame a wholly owned subsidiary of Sina Group Holding Company Limited, which is awholly owned subsidiary of New Wave MMXV Limited, a business company incorporated inthe British Virgin Islands and controlled by Mr. Charles Chao. Following the completion of themerger, SINA has ceased to be a reporting company under the Exchange Act and its shares haveceased trading on NASDAQ.

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Our agreements with SINA may be less favorable to us than similar agreements negotiatedbetween unaffiliated parties. In particular, our non-competition agreement with SINAlimits the scope of business that we are allowed to conduct.

We have entered into a series of agreements with SINA and the terms of such agreements maybe less favorable to us than would be the case if they were negotiated with unaffiliated thirdparties. In particular, under the non-competition agreement we have entered into with SINA,we agreed not to, during the non-competition period (which will end on the later of (1) fiveyears after the first date when SINA ceases to own in aggregate at least 20% of the votingpower of our then outstanding securities and (2) the fifteenth anniversary of the completion ofour initial public offering in 2014), compete with SINA in the business currently conducted bySINA, as described in its periodic filings with the SEC, other than the microblogging and socialnetworking business currently operated by us and any business developed by us operatingunder either the domain names or the brands owned by us as of the date of the agreement. Suchcontractual limitations significantly affect our ability to diversify our revenue sources and maymaterially and adversely impact our business and prospects should the growth of social mediain China slow down. In addition, pursuant to our master transaction agreement with SINA, wehave agreed to indemnify SINA for liabilities arising from litigation and other contingenciesrelated to our business and assumed these liabilities as part of our carve-out from SINA. Theallocation of assets and liabilities between SINA and our company may not reflect theallocation that would have been reached by two unaffiliated parties. Moreover, so long as SINAcontinues to control us, we may not be able to bring a legal claim against SINA in the eventof contractual breach, notwithstanding our contractual rights under the agreements describedabove and other inter-company agreements entered into from time to time.

Our sales, marketing and brand promotion have benefited significantly from ourassociation with SINA. Any negative development in SINA’s market position or brandrecognition may materially and adversely affect our marketing efforts and the strength ofour brand.

As a controlled subsidiary of SINA, we have benefited significantly from our association withSINA in marketing our brand and our platform. For example, we have benefited by providingservices to SINA’s clients. We also benefit from SINA’s strong brand recognition in China,which has provided us credibility and a broad marketing reach. If SINA loses its marketposition, the effectiveness of our marketing efforts through our association with SINA may bematerially and adversely affected. In addition, any negative publicity associated with SINAwill likely have an adverse impact on the effectiveness of our marketing as well as ourreputation and our brand.

SINA will control the outcome of shareholder actions in our company.

SINA held approximately 44.6% of our total issued and outstanding ordinary shares,representing 70.7% of our total voting power as of June 30, 2021. SINA has advised us that itdoes not anticipate disposing of its voting control in us in the near future. SINA’s voting powergives it the power to control actions that require shareholder approval under Cayman Islandslaw, our memorandum and articles of association and Nasdaq requirements, including theelection and removal of a majority of our board of directors, approval of significant mergersand acquisitions and other business combinations, changes to our memorandum and articles ofassociation, the number of shares available for issuance under share incentive plans, and theissuance of significant amounts of our ordinary shares in private placements.

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SINA’s voting control may cause transactions to occur that might not be beneficial to holdersof Class A ordinary shares and/or ADSs and may prevent transactions that would be beneficialto you. For example, SINA’s voting control may prevent a transaction involving a change ofcontrol of us, including transactions in which you as a holder of our Class A ordinary sharesand/or ADSs might otherwise receive a premium for your securities over the then-currentmarket price. In addition, SINA is not prohibited from selling a controlling interest in us to athird party and may do so without the approval of the Class A ordinary shares and/or ADSholders and without providing for a purchase of the Class A ordinary shares held by investorsand/or ADSs held by the ADS holders. If SINA is acquired or otherwise undergoes a changeof control, any acquirer or successor will be entitled to exercise the voting control andcontractual rights of SINA, and may do so in a manner that could vary significantly from thatof SINA.

We are a “controlled company” within the meaning of the Nasdaq Stock Market Rulesand, as a result, may rely on exemptions from certain corporate governance requirementsthat provide protection to shareholders of other companies.

We are a “controlled company” as defined under the Nasdaq Stock Market Rules because SINAholds more than 50% of our voting power. For so long as we remain a controlled companyunder that definition, we are permitted to elect to rely, and will rely, on certain exemptionsfrom corporate governance rules, including:

• an exemption from the rule that our director nominees must be selected or recommendedsolely by independent directors; and

• an exemption from having a corporate governance and nominating committee that iscomposed entirely of independent directors with a written charter addressing thecommittee’s purpose and responsibilities.

As a result, the ADS holders do not have the same protection afforded to shareholders ofcompanies that are subject to these corporate governance requirements.

We may have conflicts of interest with SINA and, because of SINA’s controlling ownershipinterest in our company, we may not be able to resolve such conflicts on favorable termsfor us.

Conflicts of interest may arise between SINA and us in a number of areas relating to our pastand ongoing relationships. Potential conflicts of interest that we have identified include thefollowing:

• Indemnification arrangements with SINA. We have agreed to indemnify SINA withrespect to lawsuits and other matters relating to our social media business, includingoperations of that business when it was a private company and a subsidiary of SINA.These indemnification arrangements could result in our having interests that are adverseto those of SINA, for example, with respect to settlement arrangements in litigation. Inaddition, under these arrangements, we have agreed to reimburse SINA for liabilitiesincurred (including legal defense costs) in connection with any litigation, while SINA willbe the party prosecuting or defending the litigation.

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• Non-competition arrangements with SINA. We and SINA have entered into a non-competition agreement under which we agree not to compete with each other’s corebusiness. SINA agrees not to compete with us in a business that is of the same nature asthe microblogging and social networking business operated by us as of the date of theagreement. We agree not to compete with SINA in the business currently conducted bySINA, as described in its periodic filings with the SEC, other than the microblogging andsocial networking business operated by us as of the date of the agreement.

• Employee recruiting and retention. Because both SINA and we are engaged internet-related businesses in China, we may compete with SINA in the hiring of new employees,in particular with respect to media and advertising-related matters. We have a non-solicitation arrangement with SINA that restricts us and SINA from hiring any of eachother’s employees.

• Our board members or executive officers may have conflicts of interest. Two directors ofour company are also executive officers of SINA. In addition, we may continue to grantincentive share compensation to SINA’s employees and consultants from time to time.These relationships could create, or appear to create, conflicts of interest when thesepersons are faced with decisions with potentially different implications for SINA and us.

• Sale of shares in our company. SINA may decide to sell all or a portion of our shares thatit holds to a third party, including to one of our competitors, thereby giving that thirdparty substantial influence over our business and our affairs. Such a sale could be contraryto the interests of our employees or our other shareholders.

• Allocation of business opportunities. Business opportunities may arise that both we andSINA find attractive, and which would complement our respective businesses. SINA maydecide to take the opportunities itself, which would prevent us from taking advantage ofthose opportunities.

• Developing business relationships with SINA’s competitors. So long as SINA remains asour controlling shareholder, we may be limited in our ability to do business with itscompetitors, such as other online media companies in China. This may limit our abilityto market our services for the best interests of our company and our other shareholders.

Although our company has become a stand-alone public company, we expect to operate, for aslong as SINA is our controlling shareholder, as an affiliate of SINA. SINA may from time totime make strategic decisions that it believes are in the best interests of its business as a whole,including our company. These decisions may be different from the decisions that we wouldhave made on our own. SINA’s decisions with respect to us or our business may be resolvedin ways that favor SINA and therefore SINA’s own shareholders, which may not coincide withthe interests of our other shareholders. We may not be able to resolve any potential conflicts,and even if we do so, the resolution may be less favorable to us than if we were dealing witha non-controlling shareholder. Even if both parties seek to transact business on terms intendedto approximate those that could have been achieved among unaffiliated parties, this may notsucceed in practice.

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RISKS RELATING TO OUR CORPORATE STRUCTURE

Uncertainties exist with respect to the interpretation and implementation of the PRCForeign Investment Law and how it may impact the viability of our current corporatestructure, corporate governance and business operations.

The National People’s Congress approved the Foreign Investment Law (《中華人民共和國外商投資法》) on March 15, 2019 and the State Council approved the Regulation onImplementing the Foreign Investment Law (《中華人民共和國外商投資法實施條例》) (the“Implementation Regulations”) on December 26, 2019, effective from January 1, 2020, whichreplaced the trio of existing laws regulating foreign investment in China, namely, theSino-foreign Equity Joint Venture Enterprise Law (《中外合資經營企業法》), the Sino-foreignCooperative Joint Venture Enterprise Law (《中外合作經營企業法》) and the Wholly Foreign-invested Enterprise Law (《外資企業法》), together with their implementation rules andancillary regulations. The Supreme People’s Court of China issued the Interpretation on theApplication of the Foreign Investment Law of the PRC on December 26, 2019, effective fromJanuary 1, 2020, to ensure fair and efficient implementation of the Foreign Investment Law.According to the judicial interpretation, courts in China shall not, among other things, supportcontracted parties to claim foreign investment contracts in sectors not on the SpecialAdministrative Measures for Access of Foreign Investment (Negative List) as void because thecontracts have not been approved or registered by administrative authorities. The ForeignInvestment Law and Implementation Regulations embody an expected PRC regulatory trend torationalize its foreign investment regulatory regime in line with prevailing internationalpractice and the legislative efforts to unify the corporate legal requirements for both foreignand domestic investments.

However, since these rules are relatively new, uncertainties still exist in relation to theirinterpretation. For instance, under the Foreign Investment Law, “foreign investment” refers tothe investment activities directly or indirectly conducted by foreign individuals, enterprises orother entities in China. Though it does not explicitly classify contractual arrangements as aform of foreign investment, there is no assurance that foreign investment via contractualarrangement would not be interpreted as a type of indirect foreign investment activities underthe definition in the future. In addition, the definition contains a catch-all provision whichincludes investments made by foreign investors through means stipulated in laws oradministrative regulations or other methods prescribed by the State Council. Therefore, it stillleaves leeway for future laws, administrative regulations or provisions promulgated by theStale Council to provide for contractual arrangements as a form of foreign investment. In anyof these cases, it will be uncertain whether our contractual arrangements will be deemed to bein violation of the market access requirements for foreign investment under the PRC laws andregulations, or whether they may be invalid in whole or in part. Furthermore, if future laws,administrative regulations or provisions prescribed by the State Council mandate furtheractions to be taken by companies with respect to existing contractual arrangements, we mayface substantial uncertainties as to whether we can complete such actions in a timely manner,or at all. Failure to take timely and appropriate measures to cope with any of these or similarregulatory compliance challenges could materially and adversely affect our current corporatestructure, corporate governance and business operations.

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If the PRC government finds that the agreements establishing the structure for operatingour businesses in China do not comply with PRC regulations on foreign investment ininternet and other related businesses, or if these regulations or their interpretation changein the future, we could be subject to severe penalties or be forced to relinquish ourinterests in those operations.

Current PRC laws and regulations impose certain restrictions or prohibitions on foreignownership of companies that engage in internet and other related businesses, including theprovision of internet content and online game operations. Specifically, foreign ownership of aninternet content provider may not exceed 50%. We are a company incorporated in the CaymanIslands and Weibo Technology, our PRC subsidiary, is considered a foreign-invested enterprise.To comply with PRC laws and regulations, we conduct our business in China principallythrough Weimeng, and its subsidiaries based on a series of contractual arrangements by andamong Weibo Technology, Weimeng and its shareholders. We also operate certain investmentsin China through Beijing Weimeng Chuangke Investment Management Co., Ltd., or WeimengChuangke, and its subsidiaries, based on a series of contractual arrangements by and amongWeibo Technology, Weimeng Chuangke and its shareholders. As a result of these contractualarrangements, we exert control over Weimeng and Weimeng Chuangke and treat them asconsolidated VIEs. Consequently, we consolidate their operating results in our financialstatements under U.S. GAAP. Weimeng and Weimeng Chuangke hold certain assets that areimportant to our business operations, including the Internet Content License, the OnlineCulture Operating Permit and domain names held by Weimeng and our investments held byWeimeng Chuangke. For a detailed description of these contractual arrangements, see“Contractual Arrangements.” We conduct our operations in China through our PRCsubsidiaries and our VIEs with which we maintained these contractual arrangements. Investorsin our Class A ordinary shares or the ADSs are not purchasing equity interest in our VIEs inChina but instead are purchasing equity interest in a Cayman Islands holding company with nodirect equity ownership of our VIEs.

In the opinion of our PRC Legal Adviser, TransAsia Lawyers, our current ownership structure,the ownership structure of our PRC subsidiaries and our VIEs, and the contractualarrangements among our PRC subsidiaries, the VIEs and their respective shareholders are incompliance with existing PRC laws, rules and regulations. There are, however, substantialuncertainties regarding the interpretation and application of current or future PRC laws andregulations. Thus, we cannot assure you that the PRC government will not ultimately take aview contrary to the opinion of our PRC Legal Adviser.

Weibo Corporation, our VIEs and investors of our company face uncertainties about potentialactions by the PRC government that could affect the enforceability of the contractualarrangements with our VIEs and, consequently, the business, financial condition, and results ofoperations of our VIEs and our company as a group. It is uncertain whether any new PRC lawsor regulations relating to VIE structures will be adopted, or, if adopted, what requirementswould be made. In particular, the National People’s Congress approved the Foreign InvestmentLaw and the PRC State Council approved the Implementation Rules of Foreign Investment Lawin 2019. There are uncertainties as to how the Foreign Investment Law and its implementationrules would be further interpreted and implemented, and if it would represent a major changeto the laws and regulations relating to the VIE structures. See “— Risks Relating to DoingBusiness in the People’s Republic of China — Uncertainties exist with respect to theinterpretation and implementation of the PRC Foreign Investment Law and how it may impactthe viability of our current corporate structure, corporate governance and business operations.”If we are found in violation of any PRC laws or regulations, the relevant governmentalauthorities would have broad discretion in dealing with such violation, including, withoutlimitation, levying fines, restricting our right to collect revenues, confiscating our income or

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the income of our VIEs, revoking our business licenses or the business licenses of our VIEs,requiring us to restructure our ownership structure or operations, and requiring us or our VIEsto discontinue any portion or all of our business. Any of these actions could cause significantdisruption to our business operations and may materially and adversely affect our business,financial condition and results of operations.

We rely on contractual arrangements with our VIEs and their respective shareholders forour operations in China, which may not be as effective in providing operational controlas direct ownership.

Due to the PRC restrictions or prohibitions on foreign ownership of internet and other relatedbusinesses in China, we operate our business in China through our VIEs, in which we have noownership interest. We rely on a series of contractual arrangements with our VIEs and theirrespective shareholders to control and operate their business. These contractual arrangementsare intended to provide us with effective control over these VIEs and allow us to obtaineconomic benefits from them. See “History and Corporate Structure — Corporate Structure —Contractual Arrangements” for more details about these contractual arrangements.

Although we have been advised by our PRC Legal Adviser, TransAsia Lawyers, that thesecontractual arrangements are valid, binding and enforceable under existing PRC laws andregulations, these contractual arrangements may not be as effective in providing control overthese VIEs as direct ownership. If any of these VIEs or their shareholders fail to perform theirrespective obligations under the contractual arrangements, we may incur substantial costs andexpend substantial resources to enforce our rights. All of these contractual arrangements aregoverned by and interpreted in accordance with PRC law, and disputes arising from thesecontractual arrangements will be resolved through arbitration in China. However, the legalsystem in China, particularly as it relates to arbitration proceedings, is not as developed as inother jurisdictions, such as the United States. See “Risk Factors — Risks Relating to DoingBusiness in the People’s Republic of China — Uncertainties in the interpretation andenforcement of PRC laws and regulations could limit the legal protections available to you andus.” There are very few precedents and little official guidance as to how contractualarrangements in the context of a variable interest entity (“VIE”) should be interpreted orenforced under PRC law. There remain significant uncertainties regarding the ultimate outcomeof arbitration should legal action become necessary. These uncertainties could limit our abilityto enforce these contractual arrangements. In addition, arbitration awards are final and can onlybe enforced in PRC courts through arbitration award recognition proceedings, which couldcause additional expenses and delays. In the event we are unable to enforce these contractualarrangements or we experience significant delays or other obstacles in enforcing thesecontractual arrangements, we may not be able to exert effective control over our affiliatedentities and may lose control over the assets owned by our VIEs and their subsidiaries. As aresult, we may be unable to consolidate Weimeng or Weimeng Chuangke and their respectivesubsidiaries in our consolidated financial statements, our ability to conduct our business maybe negatively affected, and our business operations could be severely disrupted, which couldmaterially and adversely affect our results of operations and financial condition.

In April 2020, WangTouTongDa (Beijing) Technology Co., Ltd., an entity affiliated withZhongWangTou (Beijing) Technology Co., Ltd, made an investment of RMB10.7 million inWeimeng for 1% of Weimeng’s enlarged registered capital. Such third party minority stakeholder is not a party to the contractual arrangements that are currently in effect amongWeimeng, Weibo Technology and Weimeng’s other shareholders. As such, despite the fact thatwe are still able to enjoy economic benefits and exercise effective control over Weimeng andits subsidiaries, we are not able to purchase or have the third party minority stake holder pledgeits 1% equity interests in Weimeng in the same manner as agreed under existing contractual

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arrangements, nor are we granted the authorization of voting rights over these 1% equityinterests. However, we believe Weibo Technology, our wholly-owned PRC subsidiary, stillcontrols and is the primary beneficiary of Weimeng as it continues to have a controllingfinancial interest in Weimeng pursuant to ASC 810-10-25-38A after the issuance of such 1%equity interests.

Shareholders of our VIEs may have potential conflicts of interest with us, which mayaffect the performance of the contractual arrangements with our VIEs and theirrespective shareholders, which may in turn materially and adversely affect our businessand financial condition.

Other than the third-party minority stake holder that holds 1% of Weimeng’s equity interests,our VIEs’ shareholders (the “Individual Shareholders”) are PRC employees of our company orSINA. Although each of these Individual Shareholders has authorized Weibo Technology toexercise all of his/her voting powers in Weimeng or Weimeng Chuangke, and we may replaceany of these Individual Shareholders at any time pursuant to the share transfer agreements, wecannot assure you that these Individual Shareholders will act in the best interest of ourcompany should any conflict arise. If they were to act in bad faith towards us, we may haveto take legal actions to enforce their contractual obligations, which may be expensive,time-consuming and disruptive to our operations. As there remain significant uncertaintiesregarding the ultimate outcome of a legal action due to the limited number of precedents andlack of official guidance as to how contractual arrangements in the context of a variable interestentity should be interpreted or enforced under PRC law, we cannot assure you that conflictswill be resolved in our favor. If we are unable to resolve any such conflicts, or if we suffersignificant delays or other obstacles as a result of such conflicts, our business and operationscould be severely disrupted, which could materially and adversely affect our results ofoperations and financial condition.

We may lose the ability to use and enjoy assets held by any of our VIEs that are importantto the operation of our business if such VIE declares bankruptcy or becomes subject to adissolution or liquidation proceeding.

Our VIEs hold certain assets that are important to our business operations, including theInternet Content Provision License, the Online Culture Operating Permit and domain namesheld by Weimeng and our investments held by Weimeng Chuangke. Under our contractualarrangements with our VIEs, the Individual Shareholders may not voluntarily liquidate the VIEor approve the VIE to sell, transfer, mortgage or dispose of its assets or legal or beneficialinterests in the business in any manner without our prior consent. However, in the event thatthe Individual Shareholders breach this obligation and voluntarily liquidate any VIE, or anyVIE declares bankruptcy, or all or part of its assets become subject to liens or rights ofthird-party creditors, we may be unable to continue some or all of our business operations,which could materially and adversely affect our business, financial condition and results ofoperations. Furthermore, if any of our VIEs or their subsidiaries undergoes a voluntary orinvoluntary liquidation proceeding, their shareholders or unrelated third-party creditors mayclaim rights to some or all of their assets, thereby hindering our ability to operate our business,which could materially and adversely affect our business, financial condition and results ofoperations.

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Contractual arrangements we have entered into with our VIEs may be subject to scrutinyby the PRC tax authorities. A finding that we owe additional taxes could substantiallyreduce our consolidated net income and the value of your investment.

Pursuant to applicable PRC laws and regulations, arrangements and transactions among relatedparties may be subject to audit or challenge by the PRC tax authorities. We may be subject toadverse tax consequences if the PRC tax authorities determine that the contractualarrangements among our PRC subsidiaries, our VIEs and their Individual Shareholders are noton an arm’s length basis and therefore constitute favorable transfer pricing. As a result, thePRC tax authorities could require any of our VIEs to adjust its taxable income upward for PRCtax purposes. Such a pricing adjustment could adversely affect us by increasing such VIE’s taxexpenses without reducing the tax expenses of our PRC subsidiaries, subjecting such VIE tolate payment fees and other penalties for under-payment of taxes, and resulting in our PRCsubsidiaries’ loss of its preferential tax treatment. Our results of operations may be adverselyaffected if any of our VIEs’ tax liabilities increase or if it is subject to late payment fees orother penalties.

If the chops of our PRC subsidiaries, our VIEs and their respective subsidiaries are notkept safely, are stolen or are used by unauthorized persons or for unauthorized purposes,the corporate governance of these entities could be severely and adversely compromised.

In China, a company chop or seal serves as the legal representation of the company towardsthird parties even when unaccompanied by a signature. Each legally registered company inChina is required to maintain a company chop, which must be registered with the local PublicSecurity Bureau. In addition to this mandatory company chop, companies may have severalother chops which can be used for specific purposes. The chops of our PRC subsidiary, ourVIEs and their respective subsidiaries are generally held securely by personnel designated orapproved by us in accordance with our internal control procedures. To the extent those chopsare not kept safely, are stolen or are used by unauthorized persons or for unauthorizedpurposes, the corporate governance of these entities could be severely and adverselycompromised and those corporate entities may be bound to abide by the terms of anydocuments so chopped, even if they were chopped by an individual who lacked the requisitepower and authority to do so. In addition, if the holders of such chops at any of our VIEs failedto employ them in accordance with the terms of the various VIE-related agreements or removedthem from the premises, the operation of such VIE could be significantly and adverselyimpacted.

RISKS RELATING TO DOING BUSINESS IN THE PEOPLE’S REPUBLIC OF CHINA

Regulation and censorship of information disseminated over the internet in China mayadversely affect our business and subject us to liability for information displayed onWeibo, or Yizhibo.

The PRC government has adopted regulations governing internet access and the distribution ofinformation over the internet. Under these regulations, internet content providers and internetpublishers are prohibited from posting or displaying the internet content that, among otherthings, impairs the national dignity of China, is reactionary, obscene, superstitious, fraudulentor defamatory, or otherwise violates PRC laws and regulations. Failure to comply with theserequirements may result in the revocation of licenses to provide internet content and otherlicenses and the closure of the concerned websites and levy of fines. The website operator mayalso be held liable for such censored information displayed on or linked to the website.

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In addition, the MIIT has published regulations that subject website operators to potentialliability for content displayed on their websites and for the actions of users and others usingtheir systems, including liability for violations of PRC laws prohibiting the dissemination ofcontent deemed to be socially destabilizing. The Ministry of Public Security has the authorityto order any local internet service provider to block any internet website at its sole discretion.From time to time, the Ministry of Public Security stops the dissemination over the internet ofinformation which it believes to be socially destabilizing. The State Administration for theProtection of State Secrets is also authorized to block any website it deems to be leaking statesecrets or failing to meet the relevant regulations relating to the protection of state secrets inthe dissemination of online information. Cyberspace Administration of China, or the CAC, setup in May 2011 to supervise internet content management nationwide, has also promulgatedregulations and taken a number of other measures to regulate and monitor online content.

We endeavor to eliminate illicit content from our platform, including through the use of our“Blue Plan” system on Weibo since July 2019, and for a detailed description of the procedureswe implement, see “Business — Risk Management and Internal Control — Internal ControlRisk Management.” Although we attempt to monitor the content posted by users on Weibo andYizhibo, we are not able to effectively control or restrict content generated or placed on Weiboor Yizhibo by our users. In particular, with various features such as posts, comments and chatgroups and the growing popularity of multimedia content, such as photos, videos and livestreaming, and long-form articles, content monitoring has become much more complicated andchallenging than text-based feeds.

To the extent that PRC regulatory authorities find any content displayed on Weibo or Yizhiboobjectionable, they may require us to limit, prevent, or eliminate the dissemination of suchinformation on our platform. The CAC launched the “Clear and Bright” campaign (清朗行動)to rectify various areas of online misconduct in May 2021, in response to which, certain policeswere issued and actions were launched. On June 15, 2021, the CAC launched the “Fan GroupChaos Rectification” special action, followed by issuance of the Notice on FurtherStrengthening the Management of Chaos in Fan Groups (《關於進一步加強“飯圈”亂象治理的通知》) on August 25, 2021. Both of the special action and notice are intended to modifybehavior in the online fan groups for celebrities, specifically, in features such as celebrityrankings, hot topics, fan communities, and fans interactive functions, so as to curb verbalabuse, stigmatization, instigation, confrontation, insults, slander, rumors, malicious marketingand the spread of other harmful information. This notice requested, among other things, thecancellation of all rankings of celebrities. The rankings of music, film and television works arestill allowed, but the network platforms should optimize and adjust ranking rules to focus onthe art works themselves and to base rankings on professional evaluation. Furthermore, minorsare not allowed to make virtual gifting or spend money on supporting idols, or act as theorganizer or manager of a fan group. As of the Latest Practicable Date, we have taken measuresspecified in this notice to the extent applicable to our business, including removing thefunction of the “star power list” on our platform. In August 2021, we started to conductself-examinations and self-rectifications in response to the PRC regulatory authorities’ recentregulatory focus on financial blogs. We have identified and rectified certain for-profit bloggers,including KOLs, with inappropriate nicknames, self-descriptions, marketing events, andpublication of financial and economics related information. We have publicly disclosed therectification results on our platform, and established a hotline for users to report anyinappropriate events. During the Track Record Period, we have identified and disposed ofaround 438 million pieces of inappropriate or illegal content, via removal, blocking or othermeasures. We do not believe our rectifications have made a material adverse impact on ourbusiness. On October 26, 2021, the CAC issued the Notice on Further Strengthening theRegulation on Online Information of Entertainment Celebrities (《關於進一步加強娛樂明星網上信息規範相關工作的通知》), which requests internet platforms to, among others, monitor

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information posted by celebrities online so as to timely identify hot topics that could involveillegal actions and to promptly report to the competent authorities in such event. Failure tocomply with the requirements from PRC regulatory authorities on content regulation maysubject us to liabilities and penalties and may even result in the temporary blockage orcomplete shutdown of our online operations. During the Track Record Period, we received 43penalties for inappropriate or illegal content transmitted on our platform, and we havecooperated with the relevant government authorities to take corrective measures in all cases.For example, in June 2020, CAC imposed a fine of RMB500,000 on us for failing to timelydiscover and remove user posts violating PRC laws and regulations from our platform, andrequired us to rectify and suspend the operation of Weibo hot search feature for one week.During the Track Record Period, we have received an aggregate penalties of RMB11.3 millionfor disseminating illegal content on our platform from the relevant regulatory authorities. Webelieve these past incidents, individually or in the aggregate, did not have a material adverseeffect on our business, financial condition or results of operations during the Track RecordPeriod. In addition, the restrictions on internet content under rules and regulations promulgatedby PRC regulatory authorities may negatively impact the operation results of our livestreaming business. During the Track Record Period, we generated less than 5% of totalrevenues from live streaming business. However, government standards and interpretationsmay change in a manner that could render our current monitoring and managing effortsinsufficient. The PRC government has wide discretion in regulating online activities and,irrespective of our efforts to control the content on our platform, government campaigns andother actions to reduce inappropriate or illegal content and activities could subject us tonegative press or regulatory challenges and sanctions, including imposition of fines,suspension or revocation of our licenses to operate in China or a ban of our platform, includingclosure of one or more parts of or our entire business. If government actions or sanctions arebrought against us, or if there are widespread rumors about any actual or potential governmentactions or sanctions against us, our reputation could be harmed, we may lose users and othercustomers, and our revenues and results of operation may be materially and adversely affected.

In addition, the Judicial Interpretation on the Application of Law in Trial of Online Defamationand Other Online Crimes (《關於辦理利用信息網絡實施誹謗等刑事案件適用法律若干問題的解釋》) jointly promulgated by the Supreme People’s Court and Supreme People’sProcuratorate, which became effective on September 10, 2013, imposes up to a five-year prisonsentence on internet users who fabricate or knowingly share defamatory false informationonline. The implementation of this judicial interpretation may have a significant and adverseeffect on the traffic of our platform and discourage the creation of user-generated content,which in turn may impact the results of our operations and ultimately the trading price of ourClass A ordinary shares and/or ADSs. Regulation and censorship of information disseminatedover the internet in China may adversely affect our user experience and reduce users’engagement and activities on our platform as well as adversely affect our ability to attract newusers to our platform. Any and all of these adverse impacts may ultimately materially andadversely affect our business and results of operations.

Substantial uncertainties exist with respect to the interpretation and implementation ofcybersecurity related regulations and cybersecurity review as well as any impact thesemay have on our business operations.

The cybersecurity legal regime in China is relatively new and evolving rapidly, and theirinterpretation and enforcement involve significant uncertainties. As a result, it may be difficultto determine what actions or omissions may be deemed to be in violations of applicable lawsand regulations in certain circumstances.

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Network operators in China are subject to numerous laws and regulations, and have theobligations to, among others, (i) establish internal security management systems that meet therequirements of the classified protection system for cybersecurity, (ii) implement technicalmeasures to monitor and record network operation status and cybersecurity incidents, (iii)implement data security measures such as data classification, backups and encryption, and (iv)submit for cybersecurity review under certain circumstances.

On November 7, 2016, the Standing Committee of the National People’s Congress issued theCyber Security Law (《網絡安全法》), which came into effect on June 1, 2017. Cyber SecurityLaw imposes more stringent requirements on operators of “critical information infrastructure,”especially in data storage and cross-border data transfer. See “Regulatory Overview —Regulations on Information Security.” On April 13, 2020, twelve PRC governmentalauthorities, including the CAC, issued the Measures for Cybersecurity Review (《網絡安全審查辦法》), effective from June 1, 2020, which provide detailed cybersecurity reviewprocedures for the purchase of network products and services by operators of “criticalinformation infrastructure.” Before purchasing any network products or services, an operatorof “critical information infrastructure” shall assess potential national security risks that mayarise from the launch or use of such products or services, and apply for a cybersecurity reviewwith the cybersecurity review office of CAC if national security will or may be affected.

There can be no assurance that we will not be identified as an operator of “critical informationinfrastructure.” If we are identified as an operator of “critical information infrastructure,” wewill be subject to stricter requirements on business operations and cybersecurity compliance,and we may need to follow cybersecurity review procedure and apply with CybersecurityReview Office before making certain purchases of network products and services. Duringcybersecurity review, we may be required to suspend providing any existing or new servicesto our users, and we may experience other disruptions of our operations, which could cause usto lose users and customers therefore leading to adverse impacts on our business. Thecybersecurity review could also lead to negative publicity and a diversion of time and attentionof our management and our other resources. It could be costly and time-consuming for us toprepare application materials and make the applications. Furthermore, there can be noassurance that we will obtain the clearance or approval for these applications from theCybersecurity Review Office and the relevant regulatory authorities in a timely manner, or atall. If we are found to be in violation of cybersecurity requirements in China, the relevantgovernmental authorities may, at their discretion, conduct investigations, levy fines, requestapp stores to take down our apps and cease to provide viewing and downloading servicesrelated to our apps, prohibit the registration of new users on our platform, or require us tochange our business practices in a manner materially adverse to our business. Any of theseactions could cause significant disruptions to our business operations and materially andadversely affect our business, financial condition, and results of operations.

On July 10, 2021, the CAC published a discussion draft of the proposed amended Measures forCybersecurity Review (《網絡安全審查辦法(修訂草案徵求意見稿)》), or the Draft AmendedMeasures for Cybersecurity Review, which provides that the relevant operators shall applywith the Cybersecurity Review Office for a cybersecurity review under the followingcircumstances: (i) operators of “critical information infrastructure” or data processors holdingover one million users’ personal information when listing abroad (國外上市), (ii) operators of“critical information infrastructure” that intend to purchase internet products and services thatwill or may affect national security, and (iii) data processors carrying out data processing thatwill or may affect national security. The CAC solicited comments on this draft, but there is notimetable as to when it will be enacted. As such, substantial uncertainties exist with respect toits enactment timetable, final content, interpretation and implementation. The Draft AmendedMeasures for Cybersecurity Review, if enacted as proposed, may materially impact business

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operations in many aspects. As advised by our PRC Legal Adviser, the exact scope of operatorsof “critical information infrastructure” under the Draft Amended Measures for CybersecurityReview and current PRC regulatory regime remains unclear, and is subject to the decisions ofthe relevant PRC government authorities that have been delegated the authority to identifyoperators of “critical information infrastructure” in their respective jurisdictions (includingregions and industries). Those PRC government authorities have wide discretion in theinterpretation and enforcement of these laws, including the identification of operators of“critical information infrastructure” and the interpretation and enforcement of requirementspotentially applicable to such operators of “critical information infrastructure.” As a majorinternet platform, we are at risk of being deemed to be an operator of “critical informationinfrastructure” and a data processor meeting the above criteria under PRC cybersecurity laws.In such case, we would be required to fulfill various obligations as required under PRCcybersecurity laws and other applicable laws for such operators of “critical informationinfrastructure” thus currently not applicable to us, including, among others, setting up a specialsecurity management organization, organizing regular cybersecurity education and training,formulating emergency plans for cyber security incidents and conducting regular emergencydrills. In addition, although the internet products and services we purchase are primarilybandwidth, copyright content and marketing services, we cannot assure you that we will not besubject to any cybersecurity review. As of the date of this document, we have not been involvedin any investigations or cybersecurity reviews by the CAC for making those purchases ofinternet products and services during the Track Record Period, and we have not received anyinquiry, notice, warning, or sanction in such respect. If a cybersecurity review for any of ouractivities is required, we will actively cooperate with the CAC to conduct such cybersecurityreview. We have already met several key obligations currently applicable to operators of“critical information infrastructure,” including setting up a special security managementorganization, organizing regular cybersecurity education and training, formulating emergencyplans for cyber security incidents and conducting regular emergency drills, but if we aredeemed to be an operator of “critical information infrastructure” or a relevant data processor,such designation may disrupt our operations and adversely affect our business, results ofoperations and financial condition.

On November 14, 2021, the CAC published a discussion draft of the Administrative Measuresfor Internet Data Security (《網絡數據安全管理條例(徵求意見稿)》), or the Draft Measuresfor Internet Data Security, which provides that data processors conducting the followingactivities shall apply for cybersecurity review: (i) merger, reorganization or division of Internetplatform operators that have acquired a large number of data resources related to nationalsecurity, economic development or public interests affects or may affect national security; (ii)listing abroad (國外上市) of data processors processing over one million users’ personalinformation; (iii) listing in Hong Kong which affects or may affect national security; or (iv)other data processing activities that affect or may affect national security. There have been noclarifications from the authorities as of the date of this document as to the standards fordetermining such activities that “affects or may affect national security”. The CAC hassolicited comments on this draft until December 13, 2021, but there is no timetable as to whenit will be enacted. As such, substantial uncertainties exist with respect to the enactmenttimetable, final content, interpretation and implementation, including the standards fordetermining whether a listing in Hong Kong “affects or may affect national security”. TheDraft Measures for Internet Data Security, if enacted as proposed, may materially impact ourcapital raising activities. If our proposed Listing is considered a listing in Hong Kong thataffects or may affect national security, we may be required to apply for cybersecurity review,

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but there can be no assurance that we are able to obtain approval from the regulatory authoritiesin a timely manner, or at all. Any failure to obtain such approval or clearance from theregulatory authorities could materially constrain our liquidity and have a material adverseimpact on our business operations and financial results, especially if we need additional capitalor financing.

The interpretation and application of these cybersecurity laws, regulations and standards arestill uncertain and evolving, especially the draft Amended Measures for Cybersecurity Reviewand the Draft Measures for Internet Data Security. We cannot assure you that relevantgovernmental authorities will not interpret or implement these and other laws or regulations inways that may negatively affect us.

We are required to, but have not been able to, verify the identities of all of our users whopost on Weibo or Yizhibo, and our noncompliance exposes us to potentially severe penaltyby the Chinese government.

The Rules on the Administration of Microblog Development (《北京市微博客發展管理若干規定》), issued by the Beijing Municipal Government in 2011, stipulate that users who postpublicly on microblogs are required to disclose their real identity to the microblogging serviceprovider, though they may still use pen names on their accounts. Microblogging serviceproviders are required to verify the identities of their users. In addition, microblogging serviceproviders based in Beijing were required to verify the identities of all of their users, includingexisting users who post publicly on their websites. Furthermore, pursuant to the Cyber SecurityLaw passed by the Standing Committee of the National People’s Congress, which came intoeffect on June 1, 2017, we will also be required to verify users’ real identities when they signup. Further, both the Administrative Measures on Group Chat Service (《互聯網群組信息服務管理規定》), which was issued on September 7, 2017 and became effective on October 8,2017, and the Administrative Measures on Internet User Public Account Information Service(《互聯網用戶公眾賬號信息服務管理規定》), which was issued on September 7, 2017 andbecame effective on October 8, 2017 and amended on January 22, 2021, require verification ofany user’s identity. On August 1, 2018, the CAC and the other five PRC governmentalauthorities jointly issued the Circular on Tightening the Administration of Online Livestreaming Services (《關於加強網絡直播服務管理工作的通知》), or the Online Livestreaming Services Circular, which specifies that online live streaming service providers arerequired to implement real name verification system for users. Several additional regulations,including the Cyber Security Law, the Administrative Measures on Group Chat Service, and theAdministrative Measures on Internet User Public Account Information Service, also requiresverification of users’ identify when they sign up.

We have made significant efforts to comply with the user verification requirements. However,for reasons including existing user behaviors, the nature of the microblogging product andonline live streaming and the lack of clarity on specific implementation procedures, we havenot been able to verify the identities of all of the users who post content publicly on Weibo orYizhibo. We are potentially liable for our noncompliance and may be subject to penaltiesincluding the deactivation of certain features on Weibo or Yizhibo, a written warning,suspension or termination of Weibo or Yizhibo operations, fines, revocation of licenses orbusiness license, or other penalties imposed by the Chinese government. Any of the aboveactions may have a material and adverse impact on the trading price of our Class A ordinaryshares and/or ADSs.

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Regulatory investigations could cause us to incur additional expenses or change ourbusiness practices in a manner materially adverse to our business.

Internet content regulation in China is continuously evolving, which can at times result insustained periods of enhanced enforcement of content censorship, cyber security reviews, userprivacy compliance, and internet financial services oversight. In April 2018, relevantregulators have ordered the suspension or significant curtailment of four of China’s mostpopular news content apps as well as one of the most popular humor platforms, all inconnection with content being shared or accessed by users.

In a period of enhanced scrutiny of internet content, we may be become subject to regulatoryinvestigations or audits in connection with products or services we provide or for informationor content displayed on, retrieved from or linked to our platform, or distributed to our users.During such investigation, some or all of our products, services, features or functionalitiescould be terminated, and our Apps could be removed from relevant App stores. It is alsopossible that a regulatory investigation could result in changes to our policies or practices,could result in reputational harm, prevent us from offering certain products, services, featuresor functionalities, cause us to incur substantial costs, or require us to change our businesspractices in a manner materially adverse to our business.

We may have to register our encryption software with Chinese regulatory authorities. Ifthey request that we change our encryption software, our business operations could bedisrupted as we develop or license replacement software.

Pursuant to the Regulations for the Administration of Commercial Encryption (《商用密碼管理條例》) promulgated in 1999, foreign companies or individuals in China are required to seekapproval from the Office of the State for Cipher Code Administration, the Chinese encryptionregulatory authority, for the use of commercial encryption products or equipment involvingencryption technology. Companies operating in China are allowed to use only commercialcipher code products approved by this authority and are prohibited to use self-developed orimported cipher code products without approval. In addition, all cipher code products shall beproduced by those producers appointed and approved by this authority. Additional rulesbecame effective in 2006 and amended in 2017 regulating many aspects of commercial ciphercode products in detail, including development, production and sales.

Because these regulations do not specify what constitutes a cipher code product, we are unsureas to whether or how they apply to us and the encryption software we utilize. We may berequired to register or apply for permits for our current or future encryption software. If thePRC authorities request that we register our encryption software or change our currentencryption software to an approved cipher code product produced by an appointed producer,it could disrupt our business operations.

Regulations on virtual currency may adversely affect our game operations revenues.

We have provided Weibo Credit as an online virtual currency for users to purchase in-gamevirtual items or other types of fee-based services on our platform. In the fourth quarter of 2020,we acquired the majority equity shares of JM Tech, a company operating several onlineinteractive entertainment apps in China including “Pocket Werewolves.” JM Tech provides“gold coin” as an online virtual currency for users to purchase items to be used in those apps.The Notice on the Strengthening of Administration on Online Game Virtual Currency (《文化部、商務部關於加強網絡遊戲虛擬貨幣管理工作的通知》), jointly issued by the Ministry ofCulture and the Ministry of Commerce in 2009, broadly defined virtual currency as a type ofvirtual exchange instrument issued by internet game operation enterprises, purchased directly

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or indirectly by the game users by exchanging legal currency at a certain exchange rate, savedoutside the game programs, stored in servers provided by the internet game operationenterprises in electronic record format and represented by specific numeric units. Virtualcurrency is used to exchange internet game services provided by the issuing enterprise for adesignated extent and time, and is represented by several forms, such as online prepaid gamecards, prepaid amounts or internet game points, and does not include game props obtained fromplaying online games. In 2009, the Ministry of Culture further promulgated the FilingGuidelines on Online Game Virtual Currency Issuing Enterprises and Online Game VirtualCurrency Trading Enterprises, which specifically defines “issuing enterprise” and “tradingservice enterprise” and stipulates that a single enterprise may not operate both types ofbusiness.

Although we believe our operations are in compliance with the Notice on the Strengthening ofAdministration on Online Game Virtual Currency (《文化部、商務部關於加強網絡遊戲虛擬貨幣管理工作的通知》), as we do not offer online game virtual currency trading services, wecannot assure you that the PRC regulatory authorities will not take a view contrary to ours, inwhich case we may be subject to fines or even required by the PRC regulators to change ourpractices related to Weibo Credit or “gold coin” in games operated by JM Tech, whichconsequently will have an adverse effect on our game-related revenues.

Adverse changes in China’s or global economic and political policies could have amaterial and adverse effect on overall economic growth in China, which could materiallyand adversely affect our business.

Substantially all of our operations are conducted in China and substantially all of our revenuesare sourced from China. Accordingly, our results of operations, financial condition andprospects are influenced by economic, political and legal developments in China. Economicreforms begun in the late 1970s have resulted in significant economic growth. However, anyeconomic reform policies or measures in China may from time to time be modified or revised.China’s economy differs from the economies of most developed countries in many respects,including the extent of the government involvement, level of development, growth rate, controlof foreign exchange and allocation of resources. The PRC government exercises significantcontrol over China’s economic growth through strategically allocating resources, controllingthe payment of foreign currency-denominated obligations, setting monetary policy andproviding preferential treatment to particular industries or companies. The PRC governmenthas significant authority to exert influence on the ability of a China-based company, such asus, to conduct its business. Therefore, investors of our company and our business face potentialuncertainties from the PRC government.

While the PRC economy has experienced significant growth in the past decades, growth hasbeen uneven across different regions and between economic sectors, and the growth rate of theChinese economy has gradually slowed since 2010, which trend may continue. Furthermore,China’s GDP growth turned negative in the first quarter of 2020. Any adverse changes ineconomic conditions in China, in the policies of the Chinese government or in the laws andregulations in China could have a material adverse effect on the overall economic growth ofChina. Such developments could adversely affect our business and operating results, lead toreduction in demand for our products and services and adversely affect our competitiveposition. The Chinese government has implemented various measures to encourage economicgrowth and guide the allocation of resources. Some of these measures may benefit the overallChinese economy, but may have a negative effect on us. For example, our financial conditionand results of operations may be adversely affected by government control over capitalinvestments or changes in tax regulations.

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COVID-19 had a severe and negative impact on the Chinese and the global economy in the firstquarter of 2020. Whether this will lead to a prolonged downturn in the economy is stillunknown. Even before the outbreak of COVID-19, the global macroeconomic environment wasfacing numerous challenges. The growth rate of the Chinese economy has gradually slowed inrecent years and the trend may continue. There is considerable uncertainty over the long-termeffects of the expansionary monetary and fiscal policies which had been adopted by the centralbanks and financial authorities of some of the world’s leading economies, including the UnitedStates and China, even before 2020. Unrest, terrorist threats and the potential for war in theMiddle East and elsewhere may increase market volatility across the globe. There have alsobeen concerns about the relationship between China and other countries, including thesurrounding Asian countries, which may potentially have economic effects. In particular, thereis significant uncertainty about the future relationship between the United States and Chinawith respect to trade policies, treaties, government regulations and tariffs. Economic conditionsin China are sensitive to global economic conditions, as well as changes in domestic economicand political policies and the expected or perceived overall economic growth rate in China. TheCOVID-19 pandemic has impacted the global and Chinese economy severely in 2020. Ourresults of operations and financial condition have been affected negatively by the spread ofCOVID-19 during the year of 2020. Any severe or prolonged slowdown in the global orChinese economy may further materially and adversely affect our business, results ofoperations and financial condition.

Uncertainties in the interpretation and enforcement of PRC laws and regulations couldlimit the legal protections available to you and us.

The PRC legal system is a civil law system based on written statutes. Unlike the common lawsystem, prior court decisions may be cited for reference but have limited precedential value.

In 1979, the PRC government began to promulgate a comprehensive system of laws andregulations governing economic matters in general. The overall effect of legislation over thepast four decades has significantly enhanced the protections afforded to various forms offoreign investments in China. However, China has not developed a fully integrated legalsystem, and recently enacted laws and regulations may not sufficiently cover all aspects ofeconomic activities in China. In particular, the interpretation and enforcement of these lawsand regulations involve uncertainties. Since PRC administrative and court authorities havesignificant discretion in interpreting and implementing statutory and contractual terms, it maybe difficult to evaluate the outcome of administrative and court proceedings and the level oflegal protection available to you and us.

Furthermore, the PRC legal system is based in part on government policies and internal rules,some of which are not published on a timely basis or at all, and which may have a retroactiveeffect. As a result, we may not be aware of our violation of any of these policies and rules untilsometime after the violation. Such uncertainties, including uncertainty over the scope andeffect of our contractual, property (including intellectual property) and procedural rights, andany failure to respond to changes in the regulatory environment in China could materially andadversely affect our business and impede our ability to continue our operations.

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We face uncertainties with respect to the enactment, interpretation and implementationof Notice 78.

On November 12, 2020, the NRTA issued the Notice on Strengthening the Management ofOnline Show Live Streaming and E-commerce Live Streaming, or the Notice 78. According tothe Notice 78, platforms providing online show live streaming or e-commerce live streamingservices shall, among other things, register their information and business operations byNovember 30, 2020, ensure real-name registration for all live streaming hosts and virtualgifting users, prohibit users that are minors or without real-name registration from virtualgifting, and set a limit on the maximum amount of virtual gifting per time, per day, and permonth.

There is currently no explicit provisions as to what limits on virtual gifting will be imposed bythe NRTA pursuant to Notice 78 and it is unclear how and to what degree any such limits wouldbe imposed on different platforms. Given there is no explicit provisions on how to set the limiton virtual gifting, we are currently not able to assess the potential impact from this requirementunder Notice 78 on the virtual gifting spending activities on our platform. Any such limitsultimately imposed may negatively impact our revenues derived from virtual gifting and ourresults of operations.

Notice 78 requests the live streaming platforms for online shows and e-commerce to registerin the National Internet Audio-Visual Platforms Information Management System. Weibo hascompleted such registration, which was valid until May 1, 2021 and is currently under theannual renewal process. Notice 78 also sets forth requirements for certain live streamingbusinesses with respect to, among others, real-name registration, limits on user spending onvirtual gifting, restrictions on minors on virtual gifting, live streaming review personnelrequirements, and content tagging requirements. We have implemented real-name registrationsystem for all of our live streaming hosts and users. See “Business — Risk Management andInternal Control — Internal Control Risk Management.” For more information on Notice 78,see “Regulatory Overview — Regulations on Online Live streaming Services.”

Since Notice 78 was only issued in November 2020 and some of the requirements in Notice 78are unclear and have no explicit provisions or implementation standards, we are still in theprocess of getting further guidance from regulatory authorities and evaluating the applicabilityand effect of the various requirements under Notice 78 on our business. Any further rulemakingunder Notice 78 or other intensified regulation with respect to live streaming may increase ourcompliance burden in the live streaming business, and may have an adverse impact on ourbusiness and results of operations.

Any failure or perceived failure by us to comply with the Anti-Monopoly Guidelines forInternet Platforms Economy Sector and other PRC anti-monopoly laws and regulationsmay result in governmental investigations or enforcement actions, litigation or claimsagainst us and could have an adverse effect on our business, financial condition andresults of operations.

The PRC anti-monopoly enforcement agencies have strengthened enforcement under the PRCAnti-Monopoly Law in recent years. On December 28, 2018, the SAMR issued the Notice onAnti-monopoly Enforcement Authorization (《國家市場監督管理總局關於反壟斷執法授權的通知》), pursuant to which its province-level branches are authorized to conduct anti-monopoly enforcement within their respective jurisdictions. On September 11, 2020, theAnti-Monopoly Commission of the State Council issued Anti-monopoly Compliance Guidelinefor Operators (《經營者反壟斷合規指南》), which requires operators to establish anti-monopoly compliance management systems under the PRC Anti-Monopoly Law to manage

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anti-monopoly compliance risks. On February 7, 2021, the Anti-Monopoly Commission of theState Council published Anti-Monopoly Guidelines for the Internet Platform Economy Sector(《國務院反壟斷委員會關於平台經濟領域的反壟斷指南》) that specified circumstanceswhere an activity of an internet platform will be identified as monopolistic act as well asconcentration filing procedures for business operators, including those involving variableinterest entities. On March 12, 2021, the SAMR published several administrative penalty casesabout concentration of business operators that violated PRC Anti-Monopoly Law in the internetsector. On April 13, 2021, we, together with 33 other major internet platforms in China,attended an administrative guidance meeting for Internet platform enterprises jointly convenedby the CAC, the China Taxation Administration and the SAMR. In the meeting, we wereinstructed to conduct a self-inspection within one month to focus on rectifying possibleviolation of anti-monopoly laws, such as exclusivity arrangements known as “pick one out oftwo,” abuse of dominant market position, monopolistic agreements, and the illegalconcentration of business operators, and to submit compliance commitments for publicsupervision. The rectification procedures generally include three steps: first, our company toconduct a self-examination and self-rectification and deliver a report to the relevantgovernment authority for review; second, the government authority to provide comments onthe report and guidance for our company to achieve compliance with the relevant PRC laws andregulations; and third, the government will make an inspection and confirm the rectificationresults. Weibo has initiated a self-inspection and rectification following the instructionsreceived in this meeting, and submitted a report which is currently under the review ofgovernment authority. It is still uncertain how these requirements will be implemented andwhether there will be further legislation and administration activities.

In August 2021, the SAMR issued two investigation notices to Weimeng Chuangke regardingrecent share acquisitions by Weimeng Chuangke, namely, acquisition of 68.8591% shares ofShanghai Jiamian Information Technology Co., Ltd. (上海假面信息科技有限公司) from itsexisting shareholders for the aggregate consideration of US$218.6 million and acquisition of36% shares of Jinhua Ruian Investment Management Co., Ltd. (金華睿安投資管理有限公司),the holding entity of Shanghai Benqu Network Technology Co., Ltd., a developer of Wutabeauty camera app, from its existing shareholders for the aggregate consideration of US$41.7million, in respect of potential illegal concentration of business operators under theAnti-Monopoly Law. Both acquisitions reached the threshold for a prior-filing under theProvisions of the State Council on the Threshold for the Reporting of Concentration ofBusiness Operators (國務院關於經營者集中申報標准的規定) but Weimeng Chuangke did notmake the filing before the consummation of these transactions.

On November 16, 2021, the SAMR issued a decision of administrative penalty to WeimengChuangke with a fine of RMB500,000 based on the determination that Weimeng Chuangke’sshare acquisition of Jinhua Ruian Investment Management Co., Ltd. (金華睿安投資管理有限公司) constituted a concentration of business operators without prior filing pursuant to theAnti-Monopoly Law (中華人民共和國反壟斷法). Weimeng Chuangke will timely pay the fineas required by such decision of administrative penalty.

As of the date of this document, the investigation into the share acquisition of ShanghaiJiamian Information Technology Co., Ltd. (上海假面信息科技有限公司), or JM Tech, isongoing and Weimeng Chuangke is actively cooperating with the SAMR. We are not able topredict the status or the results of the investigation at this stage. According to the PRCAnti-Monopoly Law (中華人民共和國反壟斷法), if a business operator carries out aconcentration in violation of the law, the relevant authority shall order the business operatorto terminate the concentration, dispose of the shares or assets or transfer the business within

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a specified time limit, or take other measures to restore the pre-concentration status, and mayimpose a fine of up to RMB500,000. As such, our PRC legal adviser is of the view that wecould be subject to fines of up to RMB500,000 and other legal actions disclosed above for suchshare acquisition, which however would not have a material adverse effect on our businesssince JM Tech contributed US$11.5 million of revenues and US$7.2 million of net income tothe Group in 2020. On October 23, 2021, the Standing Committee of the National People’sCongress issued a discussion draft of the amended Anti-Monopoly Law, which proposes toincrease the fines for illegal concentration of business operators to “no more than ten percentof its last year’s sales revenue if the concentration of business operator has or may have aneffect of excluding or limiting competition; or a fine of up to RMB5 million if theconcentration of business operator does not have an effect of excluding or limitingcompetition.” The draft also proposes for the relevant authority to investigate transactionwhere there is evidence that the concentration has or may have the effect of eliminating orrestricting competition, even if such concentration does not reach the filing threshold.

We are of the view that (i) the strengthened enforcement of the Anti-Monopoly Law couldresult in investigations on our acquisition transactions conducted in the past and make ouracquisition transactions in the future more difficult due to the prior filing requirement; (ii)although we do not expect that the PRC anti-monopoly laws will materially and adverselyaffect our business, it may increase our compliance burden, particularly in the context ofrelevant PRC authorities recently strengthening supervision and enforcement of the Anti-Monopoly Law against internet platforms; given that we do not hold a dominant marketposition in the relevant markets and we have not entered into any monopolistic agreement, ourPRC legal adviser is of the view that, except for our acquisitions that are under investigationfor concentration of business operators, we are in compliance with the currently effective PRCanti-monopoly laws in all material aspects; however, if the PRC regulatory authorities identifyany of our activities as monopolistic under the PRC Anti-Monopoly Law or the Anti-MonopolyGuidelines for the Internet Platform Economy Sector, or identify us holding a dominant marketposition or of abusing such dominant position, we may be subject to other investigations andadministrative penalties, such as termination of monopolistic act and confiscation of illegalgains; and (iii) there are significant uncertainties associated with the evolving legislativeactivities and varied local implementation practices of anti-monopoly and competition lawsand regulations in China, especially with respect to the enactment timetable, final content,interpretation and implementation of the amended Anti-Monopoly Law. If it is enacted asproposed, it will be more difficult to complete the acquisition transaction. It will be costly forus to adjust our business practices in order to comply with these evolving laws, regulations,rules, guidelines and implementations. Any non-compliance or associated inquiries,investigations and other governmental actions may divert significant management time andattention and our financial resources, lead to negative publicity, liabilities or administrativepenalties, therefore materially and adversely affect our financial conditions, operations andbusiness prospects. If we are required to take any rectifying or remedial measures or are subjectto any penalties, our reputation and business operations may be materially and adverselyaffected.

We may be adversely affected by the complexity, uncertainties and changes in PRClicensing and regulation of internet businesses.

The PRC government extensively regulates the internet industry, including the licensing andpermit requirements pertaining to companies in this industry. Internet-related laws andregulations in China are relatively new and evolving, and their interpretation and enforcementinvolve significant uncertainty. As a result, it may be difficult to determine what actions oromissions may be deemed to be violations of applicable laws and regulations in certaincircumstances.

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Weimeng holds an Internet Content Provision License and an Online Culture Operating Permitthat are necessary for operating our current business in China. Weimeng also holds aninter-regional Value-Added Telecommunications Services Operating License for provision ofvalue-added telecommunication services nationwide. However, we cannot assure you that wehave obtained all the permits or licenses required for conducting our business in China or willbe able to maintain our existing licenses or obtain any new licenses if required by any new lawsor regulations. Companies engaging in internet broadcasting activities, such as the Yizhibo livestreaming business we acquired in October 2018, must first obtain an audio/video programtransmission license. See “Regulatory Overview — Regulations on Broadcasting Audio/VideoPrograms through the Internet” for more details. Weimeng is not qualified to obtain the internetaudio/video program transmission license under the current legal regime as it is not a whollystate-owned or state-controlled company and it was not operating prior to the issuance of theRules for the Administration of Internet Audio and Video Program Services, commonly knownas Circular 56. Weimeng plans to apply for an internet audio/video program transmissionlicense when feasible to do so. In June 2017, the State Administration of Press, Publication,Radio, Film and Television of the People’s Republic of China issued a public notice stating thatit had requested the local competent authorities to take measures to suspend several companies’video and audio services due to their lacking of an internet audio/video program transmissionlicense and posting of certain commentary programs with content in violation of governmentregulations on their sites, and Weibo is named as one of these companies. In 2018 and 2019,Beijing Integrated Law Enforcement on the Cultural Market issued three decisions onadministrative penalties to Weimeng, each of which imposed a warning and a fine ofRMB30,000 on Weimeng on the grounds that Weimeng carried on internet audio/video programservices without obtaining the internet audio/video program transmission license and providedonline broadcasting services for relevant programs posted by certain registered users of Weibo.We have cooperated with the relevant government authorities to take corrective measures,including, among other measures, immediate removal of relevant audio/video programming,warning or banning live streaming hosts, and improving our ability to identify and interceptillegal content. We have registered with the National Internet Audio-Visual PlatformsInformation Management System, through which our operations is supervised and guided bythe National Radio and Television Administration and its local branches. This registration wasvalid until May 1, 2021 and is currently under the annual renewal process. However, there canbe no assurance that there will not be any further enforcement action, the occurrence of whichmay result in further liabilities, penalties and operational disruption. In addition, we may berequired to obtain an internet publishing permit due to the online game related services weprovided and the contents generated by our users. See “Regulatory Overview — Regulations onOnline Game Operations and Cultural Products.” Weimeng has been actively communicatingwith the relevant regulator for the application of an internet publishing permit. Weimeng maynot be able to obtain such license due to inappropriate or illegal content generated by users.Before we obtain such licenses or any additional licenses required by new laws and regulations,we could be subject to liabilities and penalties for providing online publishing services withoutthe relevant licenses, including removal of the relevant online publications, confiscation ofillegal income, fines, and/or the closure of our relevant websites, which could lead to severedisruption to our business operation.

Foreign investment in online game operation is prohibited under PRC law. We currentlyprovide our online game services through Weimeng, Weibo Interactive and WeimengChuangke’s subsidiaries. However, certain contracts relating to our online game services wereentered into between our PRC subsidiaries, Weimeng and the game developers, under whichour PRC subsidiaries, together with Weimeng, provides certain technical services through ourwebsite. Under these agreements, our PRC subsidiaries, foreign-invested enterprises, may bedeemed to be providing value-added telecommunication services without the necessarylicenses. If so, we may be subject to sanctions, including payment of delinquent taxes andfines, which may significantly disrupt our operations and materially and adversely affect ourbusiness, results of operations and financial condition.

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Furthermore, the operation of online games in China is highly regulated by the PRCgovernment. The publication of a new online game or a significant upgrade of an existingonline game requires approval from the National Press and Publication Administration, or theNPPA. There are uncertainties with respect to the interpretation and implementation of the lawsand regulations governing online games. Although most of the games on our website haveobtained approval from the NPPA, certain games may not be able to obtain such approval dueto the narrow interpretation of the scope of “game” adopted by NPPA in practice. For example,“Pocket Werewolves” operated by JM Tech may not be able to obtain the approval from NPPAas it is considered a social app instead of a game app. If any online game operated on ourplatform or by JM Tech fails to timely obtain necessary regulatory approval, the operator of therelevant game may be subject to various penalties and the operation of the relevant game couldbe suspended or discontinued, which could adversely affect our business. The InterimMeasures for the Administration of Online Games (《網絡遊戲管理暫行辦法》) that wasissued by the Ministry of Culture, on June 3, 2010, and last amended on December 15, 2017,comprehensively regulated the activities related to online game business until July 10, 2019when it was abolished by the Culture and Tourism of the PRC according to the Decision onAbolishing the Interim Measures for the Administration of Online Games and the Measures forthe Administration of Tourism Development Planning. As of the Latest Practicable Date, thegovernmental authorities have not issued laws or regulations to replace the Interim Measureson Administration of Online Games.

In addition, due to the increasing popularity and use of the internet, online games and otheronline services, it is possible that additional laws and regulations may be adopted with respectto the internet, online games or other online services covering issues such as user privacy,pricing, content, copyrights and distribution. The adoption of additional laws or regulationsmay decrease the growth of the internet, online games or other online services, which could inturn decrease the demand for our products and services and increase our cost of doing business.

If the game publishers and operators fail to maintain the normal publication and operation oftheir online games, or if they fail to complete or obtain the necessary approvals of their onlinegames, our operations may be negatively impacted, and we may be subject to penalties for livestreaming such games.

Furthermore, the PRC government has taken steps to limit the method and manner that theinternet companies may apply when using the algorithms. For instance, the CAC, together witheight other governmental authorities, jointly issued the Guidelines on Strengthening theComprehensive Regulation of Algorithms for Internet Information Services (關於加強互聯網信息服務算法綜合治理的指導意見) on September 17, 2021, which provides that dailymonitoring of data use, application scenarios and effects of algorithms shall be carried out bythe relevant regulators, and security assessments of algorithms shall be conducted by therelevant regulators. The guidelines also provide that an algorithm filing system shall beestablished, and classified security management of algorithms shall be promoted. In addition,the Cyberspace Administration of China issued a discussion draft of Administrative Provisionson Algorithm Recommendation of Internet Information Services (互聯網信息服務算法推薦管理規定(徵求意見稿)) on 27 August 2021, which provides that algorithms recommendationservice providers are not allowed to use algorithms to register false user accounts, blockinformation, give excessive recommendations, and that users should be given the option toeasily turn off algorithm recommendation services. Although the CAC has solicited commentson this draft since August 27, 2021, there is no timetable as to when it will be enacted. As such,substantial uncertainties exist with respect to its enactment timetable, final content,interpretation and implementation. Our social interest graph recommendation engine, whichleverages our database of users’ social interest graphs based on their engagement actions on ourplatform, allows us to push the content that the users may find more relevant and interesting.

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If the draft of the Administrative Provisions on Algorithm Recommendation of InternetInformation Services is enacted as proposed, we may need to further adjust our business andoperations. For instance, under this draft, algorithms recommendation service providers arerequired to publicly disclose the basic principles, purposes, intention, and operatingmechanism of our algorithm-related products. In response to this draft, we have publiclydisclosed the operation mechanism for “Weibo hot search” and provided an option for our usersto limit algorithm-driven recommendations for content and advertisements in certain ways.However, the impact on our business operations is still substantially uncertain since the draftis not yet enacted. In the event the draft is eventually enacted, the impact on our SIGrecommendation engine still depends largely on the number of users who actually turn off ouralgorithm recommendation services. If such opt-out ratio turns out to be on the high end, theadvertisement efficiency on our platform may ultimately be lowered and our businessoperations may be adversely affected.

PRC regulations of loans to PRC entities and direct investment in PRC entities byoffshore holding companies may delay or prevent us from using offshore funds to makeloans or additional capital contributions to our PRC subsidiaries.

We may transfer funds to our PRC subsidiaries or finance our PRC subsidiaries by means ofshareholder loans or capital contributions. Any loans from us to our PRC subsidiaries, whichis a foreign-invested enterprise, cannot exceed statutory limits based on the difference betweenthe registered capital and the investment amount of such subsidiaries or 200% of its net assets,and shall be registered with the State Administration of Foreign Exchange, or SAFE, or itslocal counterparts. Any capital contributions we make to our PRC subsidiaries is subject to therequirement of necessary filings in the Foreign Investment Comprehensive ManagementInformation System and registration with other governmental authorities. We may not be ableto obtain these government registrations or approvals on a timely basis, if at all. If we fail toreceive such registrations or approvals, our ability to provide loans or capital contributions toour PRC subsidiaries in a timely manner may be negatively affected, which could materiallyand adversely affect our liquidity and our ability to fund and expand our business.

On March 30, 2015, SAFE issued the Circular on Reform of the Administrative Rules of thePayment and Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises (《國家外匯管理局關於改革外商投資企業外匯資本金結匯管理方式的通知》), or SAFE Circular 19,which became effective on June 1, 2015. SAFE Circular 19 adopts a concept of “discretionaryconversion,” which is defined as the conversion of a foreign-invested enterprise’s foreigncurrency registered capital in accordance with the enterprise’s actual business needs. Noreview of the purpose of the funds is required at the time of conversion under SAFECircular 19. However, use of any RMB funds converted from its registered capital shall bebased on true transactions. In addition, equity investments using converted registered capitalare no longer prohibited under SAFE Circular 19.

SAFE issued the Circular on Reforming and Regulating Policies on the Control over ForeignExchange Settlement of Capital Accounts (《國家外匯管理局關於改革和規範資本項目結匯管理政策的通知》), or SAFE Circular 16, on June 9, 2016, which became effective on the sameday. Pursuant to SAFE Circular 16, enterprises registered in the PRC may also convert theirforeign debts from foreign currency to RMB on self-discretionary basis. SAFE Circular 16provides an integrated standard for conversion of foreign exchange under capital account items(including but not limited to foreign currency capital and foreign debts) on self-discretionarybasis which applies to all enterprises registered in the PRC. SAFE Circular 16 reiterates theprinciple that RMB converted from foreign currency-denominated capital of a company maynot be directly or indirectly used for purposes beyond its business scope or prohibited by PRC

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laws or regulations, while such converted RMB shall not be provided as loans to itsnon-affiliated entities, or used for construction and purchase of non-self-used real estate(excluding real estate enterprises) or unless otherwise expressly provided in law, directly orindirectly used in securities investment or other financial management excluding the bankcapital preservation products.

Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties.SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer anyforeign currency we hold, including the net proceeds from our equity offering and notesoffering, to our PRC subsidiaries, which may adversely affect our liquidity and our ability tofund and expand our business in China.

On October 23, 2019, SAFE issued the Notice of the State Administration of Foreign Exchangeon Further Promoting the Facilitation of Cross-border Trade and Investment (《國家外匯管理局關於進一步促進跨境貿易投資便利化的通知》), or SAFE Circular 28. SAFE Circular 28allows non-investment foreign-invested enterprises to use their capital funds to make equityinvestments in China, provided that such investments do not violate the Negative List and thatthe target investment projects are genuine and in compliance with PRC laws.

In light of the various requirements imposed by PRC regulations on loans to and directinvestment in PRC entities by offshore holding companies, we cannot assure you that we willbe able to complete the necessary government registrations or obtain the necessary governmentapprovals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiariesor with respect to future capital contributions by us to our PRC subsidiaries. If we fail tocomplete such registrations or obtain such approvals, our ability to use the proceeds wereceived from our equity offering and notes offering and to capitalize or otherwise fund ourPRC operations may be negatively affected, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.

We may be subject to penalties, including restriction on our ability to inject capital intoour PRC subsidiaries and our PRC subsidiaries’ ability to distribute profits to us, if ourPRC resident shareholders beneficial owners fail to comply with relevant PRC foreignexchange rules.

The SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident’sInvestment and Financing and Roundtrip Investment through Special Purpose Vehicles (《國家外匯管理局關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》), or SAFE Circular 37, in July 2014 that requires PRC residents or entities to register withSAFE or its local branch in connection with their establishment or control of an offshore entityestablished for the purpose of overseas investment or financing. In addition, such PRCresidents or entities must update their SAFE registrations when the offshore special purposevehicle undergoes material events relating to any change of basic information (includingchange of such PRC citizens or residents, name and operation term), increases or decreases ininvestment amount, transfers or exchanges of shares, or mergers or divisions.

SAFE Circular 37 is issued to replace the Notice on Relevant Issues Concerning ForeignExchange Administration for PRC Residents Engaging in Financing and Roundtrip Investmentsvia Overseas Special Purpose Vehicles (《國家外匯管理局關於境內居民通過境外特殊目的公司融資及返程投資外匯管理有關問題的通知》), or SAFE Circular 75.

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If our shareholders who are PRC residents or entities do not complete their registration withthe local SAFE branches, our PRC subsidiaries may be prohibited from distributing theirprofits and proceeds from any reduction in capital, share transfer or liquidation to us, and wemay be restricted in our ability to contribute additional capital to our PRC subsidiaries.Moreover, failure to comply with the SAFE registration described above could result inliability under PRC laws for evasion of applicable foreign exchange restrictions.

We have requested all of our current shareholders and/or beneficial owners to disclose whetherthey or their shareholders or beneficial owners fall within the ambit of Circular 37 and haveurged relevant shareholders and beneficial owners, upon learning they are PRC residents, toregister with the local SAFE branch as required under Circular 37. However, we may not beinformed of the identities of all the PRC residents or entities holding direct or indirect interestin our company, nor can we compel our beneficial owners to comply with SAFE registrationrequirements. As a result, we cannot assure you that all of our shareholders or beneficialowners who are PRC residents or entities have complied with, and will in the future make orobtain any applicable registrations or approvals required by, SAFE regulations. Failure by suchshareholders or beneficial owners to comply with SAFE regulations, or failure by us to amendthe foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legalsanctions, restrict our overseas or cross-border investment activities, limit our PRCsubsidiaries’ ability to make distributions or pay dividends to us or affect our ownershipstructure, which could adversely affect our business and prospects.

We and/or our Hong Kong subsidiary may be classified as a “PRC resident enterprise” forPRC enterprise income tax purposes. Such classification would likely result inunfavorable tax consequences to us and our non-PRC shareholders and have a materialadverse effect on our results of operations and the value of your investment.

The Enterprise Income Tax Law (《中華人民共和國企業所得稅法》) provides that anenterprise established outside China or established pursuant to foreign (regional) laws whose“de facto management body” is located in China is considered a “PRC resident enterprise” andwill generally be subject to the uniform 25% enterprise income tax on its global income. Underthe Implementation Rules of the Enterprise Income Tax Law, “de facto management body” isdefined as the organizational body which substantially and comprehensively manages andcontrols the production and operation, personnel, accounting and properties of an enterprise.

Pursuant to the Notice Regarding the Determination of Chinese-Controlled OffshoreIncorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De FactoManagement Bodies (《關於境外註冊中資控股企業依據實際管理機構標準認定為居民企業有關問題的通知》), issued by the State Administration of Taxation in 2009, a foreign enterprisecontrolled by PRC enterprises or PRC enterprise groups is considered a PRC residententerprise if all of the following conditions are met: (i) the senior management and coremanagement departments in charge of daily operations are located mainly within the PRC;(ii) financial and human resources decisions are subject to determination or approval bypersons or bodies in the PRC; (iii) major assets, accounting books, company seals and minutesand files of board and shareholders’ meetings are located or kept within the PRC; and (iv) atleast half of the enterprise’s directors with voting rights or senior management often residewithin the PRC. Although the notice states that these standards only apply to offshoreenterprises that are controlled by PRC enterprises or PRC enterprise groups, such standardsmay reflect the general view of the State Administration of Taxation in determining the taxresidence of foreign enterprises.

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We believe that neither our company nor our Hong Kong subsidiary is a PRC residententerprise because neither our company nor our Hong Kong subsidiary meets all of theconditions enumerated. For example, board and shareholders’ resolutions of our company andour Hong Kong subsidiary are adopted in Hong Kong and the minutes and related files are keptin Hong Kong. However, if the PRC tax authorities were to disagree with our position, ourcompany and/or our Hong Kong subsidiary may be subject to PRC enterprise income taxreporting obligations and to a 25% enterprise income tax on our global taxable income, exceptfor our income from dividends received from our PRC subsidiary, which may be exempt fromPRC tax. If we and/or our Hong Kong subsidiary are treated as a PRC resident enterprise, the25% enterprise income tax may adversely affect our ability to satisfy any of our cash needs.

In addition, if we were to be classified as a PRC “resident enterprise” for PRC enterpriseincome tax purpose, dividends we pay to our non-PRC enterprise shareholders and gainsderived by our non-PRC enterprise shareholders from the sale of our shares and ADSs may bebecome subject to a 10% PRC withholding tax. In addition, future guidance may extend thewithholding tax to dividends we pay to our non-PRC individual shareholders and gains derivedby such shareholders from transferring our shares and ADSs. In addition to the uncertainty inhow the “resident enterprise” classification could apply, it is also possible that the rules maychange in the future, possibly with retroactive effect. If PRC income tax were imposed on gainsrealized through the transfer of our ADSs or ordinary shares or on dividends paid to ournon-resident shareholders, the value of your investment in our ADSs or ordinary shares maybe materially and adversely affected.

Any limitation on the ability of our PRC subsidiaries to make payments to us, or the taximplications of making payments to us, could have a material adverse effect on our abilityto conduct our business or our financial condition.

We are a holding company, and we rely principally on dividends and other distributions fromour PRC subsidiaries for our cash needs, including the funds necessary to pay dividends to ourshareholders or service any debt we may incur. Current PRC regulations permit our PRCsubsidiaries to pay dividends only out of its accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, our PRC subsidiariesare required to set aside at least 10% of its after-tax profits each year, if any, to fund certainstatutory reserve funds until the aggregate amount of such reserve funds reaches 50% of itsregistered capital. Apart from these reserves, our PRC subsidiaries may allocate discretionaryportion of their after-tax profits to staff welfare and bonus funds at their discretion. Thesereserves and funds are not distributable as cash dividends. Furthermore, if our PRC subsidiariesincur debt, the debt instruments may restrict its ability to pay dividends or make otherpayments to us. We cannot assure you that our PRC subsidiaries will generate sufficientearnings and cash flows in the near future to pay dividends or otherwise distribute sufficientfunds to enable us to meet our obligations, pay interest and expenses or declare dividends.

Distributions made by PRC companies to their offshore parents are generally subject to a 10%withholding tax under the Enterprise Income Tax Law. Pursuant to the Enterprise Income TaxLaw and the Arrangement between the Mainland of China and the Hong Kong SpecialAdministrative Region for the Avoidance of Double Taxation and the Prevention of FiscalEvasion with respect to Taxes on Income, the withholding tax rate on dividends paid by ourPRC subsidiaries to our Hong Kong subsidiary would generally be reduced to 5%, providedthat our Hong Kong subsidiary is the beneficial owner of the PRC sourced income. Further, theState Taxation Administration promulgated the Announcement of the Certain Issues withRespect to the “Beneficial Owner” in Tax Treaties (《國家稅務總局關於稅收協定中“受益所有人”有關問題的公告》) in 2018, which sets forth certain detailed factors in determining

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“beneficial owner” status, and specifically, if an applicant’s business activities do notconstitute substantive business activities, the applicant will not qualify as a “beneficial owner”.Although our PRC subsidiary is wholly owned by our Hong Kong subsidiary, we will not beable to enjoy the 5% withholding tax rate with respect to any dividends or distributions madeby our PRC subsidiary to its parent company in Hong Kong if our Hong Kong subsidiary is notregarded as a “beneficial owner.”

In addition, if Weibo HK were deemed to be a PRC resident enterprise, then dividends payableby Weibo HK to Weibo Corporation may become subject to 10% PRC dividend withholdingtax. Under such circumstances, it is not clear whether dividends payable by Weibo Technologyto Weibo Corporation would still be subject to PRC dividend withholding tax and whether suchtax, if imposed, would be imposed at a rate of 5% or 10%.

Restrictions on the remittance of RMB into and out of China and governmental controlof currency conversion may limit our ability to pay dividends and other obligations, andaffect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreigncurrencies and the remittance of currency out of China. We receive substantially all of ourrevenues in RMB and the majority of our cash inflows and outflows are denominated in RMB.Under our current corporate structure, our cash needs are dependent on dividend paymentsfrom our subsidiaries in China after it receives payments from our VIEs under various servicesand other contractual arrangements. We may convert a portion of our RMB into othercurrencies to meet our foreign currency obligations, such as payments of dividends declared inrespect of our ordinary shares, if any. Shortages in the availability of foreign currency mayrestrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividendsor other payments to us, or otherwise satisfy its foreign currency denominated obligations.

Under existing PRC foreign exchange regulations, payments of current account items,including profit distributions, interest payments and trade and service-related foreign exchangetransactions, can be made in foreign currencies without prior SAFE approval as long as certainroutine procedural requirements are fulfilled. Therefore, our PRC subsidiaries is allowed to paydividends in foreign currencies to us without prior SAFE approval by following certain routineprocedural requirements. However, approval from or registration with competent governmentauthorities is required where the RMB is to be converted into foreign currency and remitted outof China to pay capital expenses such as the repayment of loans denominated in foreigncurrencies. The PRC government may at its discretion restrict access to foreign currencies forcurrent account transactions in the future. If the foreign exchange control system prevents usfrom obtaining sufficient foreign currencies to satisfy our foreign currency demands, we maynot be able to pay dividends in foreign currencies to our shareholders, including holders of ourClass A ordinary shares and/or ADSs.

Discontinuation of preferential tax treatment or imposition of any additional taxes couldadversely affect our financial condition and results of operations.

The Enterprise Income Tax Law and its implementing rules have adopted a uniform statutoryenterprise income tax rate of 25% to all enterprises in China. The Enterprise Income Tax Lawand its implementing rules also permit qualified “software enterprises” to enjoy a two-yearincome tax exemption starting from the first profit making year, followed by a reduced tax rateof 12.5% for the subsequent three years. In addition, qualified “key software enterprises” canenjoy a reduced tax rate of 10%. Weibo Technology, our PRC subsidiary, was qualified as a“software enterprise” on December 19, 2011, the qualification of which was renewed each year.

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Accordingly, Weibo Technology is eligible for the relevant preferential tax treatment uponfiling with the relevant tax authorities. Its qualification as a “software enterprise” is subject toannual evaluation by the relevant authorities in China. Weibo Technology, a qualified softwareenterprise, enjoyed the relevant tax holiday from its first accumulative profitable year in 2015and was subject to a reduced enterprise income tax rate of 12.5% from 2017 to 2019. AlthoughWeibo Technology was qualified as a “software enterprise” in 2020, it will not enjoy a reducedtax rate as it has been five years since it first became profitable in 2015. Weibo Technologycompleted its filings as a “key software enterprise” with the tax authority in 2018, 2019 and2020 for its status of 2017, 2018 and 2019, therefore is entitled to enjoy a further reducedpreferential tax rate of 10% for 2017, 2018 and 2019. The qualification as a “key softwareenterprise” is subject to annual evaluation and approval by the relevant authorities in China andwe will only recognize the preferential tax treatment of “key software enterprise” status whenapproval from the relevant authorities is obtained, usually one year in arrears. On February 7,2021, the NDRC published the Circular on the Requirements for the Formulation of the Listof Integrated Circuit Enterprises or Project and Software Enterprises Enjoying Tax Preferences(《關於印發享受稅收優惠的集成電路企業或項目、軟件企業清單制定有關要求的通知(徵求意見稿)》) for the public comment by March 8, 2021, which provides higher requirements on“key software enterprise” than before. If Weibo Technology fails to maintain its “key softwareenterprise” qualification, its applicable corporate income tax rate would increase to 25%,which could have an adverse effect on our financial condition and results of operations.

Furthermore, certain enterprises may still benefit from a preferential tax rate of 15% under theEnterprise Income Tax Law and its implementing rules if they qualify as a “High and NewTechnology Enterprise” subject to certain general factors described in the Enterprise IncomeTax Law and the related regulations. Weibo Technology is qualified as a High and NewTechnology Enterprise and is entitled to a preferential tax rate of 15% for the fiscal years from2017 to 2022. Its qualification as a “High and New Technology Enterprise” is subject to annualevaluation and a three-year review by the relevant authorities in China. If Weibo Technologyfails to maintain its “High and New Technology Enterprise” qualification, its applicablecorporate income tax rate would increase to 25%, which could have an adverse effect on ourfinancial condition and results of operations.

Moreover, there are also news articles reporting that the PRC government may charge data taxin the future potentially by having tech giants that possess huge amount of personal data returnportions of their revenues generated by transactions to owners of the data, which may in turnhave an adverse effect on our business or financial conditions.

Failure to comply with PRC regulations regarding the registration requirements for stockownership plans or stock option plans may subject PRC plan participants or us to finesand other legal or administrative sanctions.

In February 2012, SAFE promulgated the Notices on Issues concerning the Foreign ExchangeAdministration for Domestic Individuals Participating in Stock Incentive Plan of OverseasPublicly Listed Company (《關於境內個人參與境外上市公司股權激勵計劃外匯管理有關問題的通知》), or the Stock Option Rule, replacing the earlier rules promulgated in March 2007and January 2008. Under the Stock Option Rule, PRC residents who participate in an employeestock ownership plan or stock option plan in an overseas publicly listed company are requiredto register with SAFE or its local branch and complete certain other procedures. Participantsof a stock incentive plan who are PRC residents must retain a qualified PRC agent, which couldbe a PRC subsidiary of such overseas publicly listed company, to conduct the SAFEregistration and other procedures with respect to the stock incentive plan on behalf of theseparticipants. Such participants must also retain an overseas entrusted institution to handlematters in connection with their exercise or sale of stock options. In addition, the PRC agentis required to amend the SAFE registration with respect to the stock incentive plan if there isany material change to the stock incentive plan, the PRC agent or the overseas entrustedinstitution or other material changes.

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We and our PRC resident employees who participate in our share incentive plans have beensubject to these regulations since our company became publicly listed in the United States. Ifwe or our PRC resident employees who participate in our share incentive plans fail to complywith these regulations in the future, we or our PRC resident employees who participate in ourshare incentive plans and their local employers may be subject to fines and legal sanctions. See“Regulatory Overview — Regulations on Employee Stock Options Plans.”

Fluctuation in the value of the RMB may have a material adverse effect on the value ofyour investment.

The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on ratesset by the People’s Bank of China. The value of Renminbi against the U.S. dollar and othercurrencies is affected by changes in China’s political and economic conditions and by China’sforeign exchange policies, among other things. We cannot assure you that Renminbi will notappreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficultto predict how market forces or PRC or U.S. government policy may impact the exchange ratebetween Renminbi and the U.S. dollar in the future.

Our revenues and costs are mostly denominated in RMB, and a significant portion of ourfinancial assets are also denominated in RMB, whereas our reporting currency is the U.S.dollar. Any significant depreciation of the RMB may materially and adversely affect ourrevenues, earnings and financial position as reported in U.S. dollars. To the extent that we needto convert U.S. dollars we received from offerings or debt financing into RMB for ouroperations, appreciation of the RMB against the U.S. dollar would have an adverse effect onthe RMB amount we would receive from the conversion. Conversely, if we decide to convertour RMB into U.S. dollars for the purpose of making payments for dividends on our ordinaryshares or ADSs or for other business purposes, appreciation of the U.S. dollar against the RMBwould have a negative effect on the U.S. dollar amount available to us.

PRC laws and regulations establish more complex procedures for some acquisitions ofChinese companies by foreign investors, which could make it more difficult for us topursue growth through acquisitions in China.

A number of PRC laws and regulations, including the Regulations on Mergers and Acquisitionsof Domestic Enterprises by Foreign Investors (《關於外國投資者併購境內企業的規定》)adopted by six PRC regulatory agencies in 2006 and last amended in 2009, or the M&A Rules,the Anti-Monopoly Law (《中華人民共和國反壟斷法》), and the Rules of Ministry ofCommerce on Implementation of Security Review System of Mergers and Acquisitions ofDomestic Enterprises by Foreign Investors (《商務部實施外國投資者併購境內企業安全審查制度的規定》) promulgated by the Ministry of Commerce in August 2011, or the SecurityReview Rules, have established procedures and requirements that are expected to make mergerand acquisition activities in China by foreign investors more time consuming and complex.These include requirements in some instances that the Ministry of Commerce be notified inadvance of any change of control transaction in which a foreign investor takes control of a PRCdomestic enterprise, or that the approval from the Ministry of Commerce be obtained incircumstances where overseas companies established or controlled by PRC enterprises orresidents acquire affiliated domestic companies. PRC laws and regulations also require certainmerger and acquisition transactions to be subject to merger control review or security review.

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The Security Review Rules were formulated to implement the Notice of the General Office ofthe State Council on Establishing the Security Review System for Mergers and Acquisitions ofDomestic Enterprises by Foreign Investors (《國務院辦公廳關於建立外國投資者併購境內企業安全審查制度的通知》), also known as Circular 6, which was promulgated in 2011. Underthese rules, a security review is required for mergers and acquisitions by foreign investorshaving “national defense and security” concerns and mergers and acquisitions by which foreigninvestors may acquire the “de facto control” of domestic enterprises have “national security”concerns. In addition, when deciding whether a specific merger or acquisition of a domesticenterprise by foreign investors is subject to the security review, the Ministry of Commerce willlook into the substance and actual impact of the transaction. The Security Review Rules furtherprohibits foreign investors from bypassing the security review requirement by structuringtransactions through proxies, trusts, indirect investments, leases, loans, control throughcontractual arrangements or offshore transactions.

There is no requirement for foreign investors in those mergers and acquisitions transactionsalready completed prior to the promulgation of Circular 6 to submit such transactions to theMinistry of Commerce for security review. As we have already obtained the “de facto control”over our affiliated PRC entities prior to the effectiveness of these rules, we do not believe weare required to submit our existing contractual arrangements to the Ministry of Commerce forsecurity review.

However, as there is a lack of clear statutory interpretation on the implementation of the same,there is no assurance that the Ministry of Commerce will not apply these national securityreview-related rules to the acquisition of equity interest in our PRC subsidiaries. If we arefound to be in violation of the Security Review Rules and other PRC laws and regulations withrespect to the merger and acquisition activities in China, or fail to obtain any of the requiredapprovals, the relevant regulatory authorities would have broad discretion in dealing with suchviolation, including levying fines, confiscating our income, revoking our PRC subsidiaries’business or operating licenses, requiring us to restructure or unwind the relevant ownershipstructure or operations. Any of these actions could cause significant disruption to our businessoperations and may materially and adversely affect our business, financial condition andresults of operations. Further, if the business of any target company that we plan to acquire fallsinto the ambit of security review, we may not be able to successfully acquire such companyeither by equity or asset acquisition, capital contribution or through any contractualarrangement. We may grow our business in part by acquiring other companies operating in ourindustry. Complying with the requirements of the relevant regulations to complete suchtransactions could be time consuming, and any required approval processes, including approvalfrom the Ministry of Commerce, may delay or inhibit our ability to complete such transactions,which could affect our ability to expand our business or maintain our market share.

The approval of the CSRC or other PRC government authorities may be required inconnection with this offering under PRC law, and, if required, we cannot predict whetherwe will be able to obtain such approval.

The M&A Rules purport to require offshore special purpose vehicles that are controlled byPRC companies or individuals and that have been formed for the purpose of seeking a publiclisting on an overseas stock exchange through acquisitions of PRC domestic companies orassets to obtain CSRC approval prior to the listing and trading of their securities on an overseasstock exchange. However, the interpretation and application of these regulations remainunclear. If CSRC approval is required, it is uncertain whether it would be possible for us toobtain the approval, how long it would take to obtain such approval, or, even if obtained,whether CSRC would rescind it. Any delay in obtaining, failure to obtain CSRC approval forthis offering, or rescission of CSRC approval if obtained, would subject us to sanctionsimposed by the CSRC and other PRC regulatory authorities.

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Our PRC counsel, TransAsia Lawyers, has advised us that, based on its understanding of thecurrent PRC laws and regulations, we will not be required to submit an application to the CSRCfor the approval of the listing and trading of our Class A ordinary shares because (i) the CSRCcurrently has not issued any definitive rules or interpretations concerning whether offeringslike ours under this document are subject to such regulation, (ii) our wholly-owned PRCsubsidiaries were not established through a merger or acquisition of the equity or assets of a“PRC domestic company” as such term is defined under the M&A Rules, and (iii) no provisionin this regulation clearly classifies contractual arrangements as a type of transaction subject toits regulation.

However, we cannot assure you that relevant PRC government authorities, including the CSRC,would reach the same conclusion as our PRC counsel, and in such event we may faceregulatory actions or other sanctions from the CSRC or other PRC regulatory authorities. If itis determined that the approval from the CSRC or other regulatory authorities, or otherprocedures, are required for this offering, it would be uncertain whether we can or how longwill it take to obtain such approval or complete such procedures. Furthermore, we cannotassure you that any obtained approval or clearance will not be rescinded by the governmentalauthorities, and in any of such cases, we may face sanctions from the CSRC or other PRCregulatory authorities for the failure to seek approval or clearance from CSRC or othercompetent regulatory authorities for this offering. These sanctions may include fines andpenalties for our operations in China, restrictions or limitations on our ability to pay dividendsoutside of China, and other forms of sanctions that may materially and adversely affect ourbusiness, results of operations and financial condition, or other actions that could have amaterial and adverse effect on our business, financial condition, results of operations,reputation and prospects, as well as the trading price of our listed securities. The CSRC or otherPRC regulatory agencies may also take actions requiring us, or making it advisable for us, tohalt this offering before the settlement and delivery of the securities that we are offering.Consequently, if you engage in market trading or other activities in anticipation of and priorto the settlement and delivery of the securities we are offering, you would be doing so at therisk that the settlement and delivery may not occur. In addition, if the CSRC or other regulatoryagencies later promulgate new rules or explanations requiring that we obtain their approvals forthis offering, we may be unable to obtain a waiver of such approval requirements, if and whenprocedures are established to obtain such a waiver. Any uncertainties or negative publicityregarding such approval requirement could materially and adversely affect our business,prospects, financial condition, reputation, and the trading price of our listed shares.

Several PRC authorities recently issued the Opinions on Strictly Combating Illegal SecuritiesActivities (《關於依法從嚴打擊證券違法活動的意見》) which emphasize on the prevention ofillegal securities activities and tightened supervision over overseas listings by China-basedcompanies. The opinions aim to achieve this by establishing a regulatory system and revisingthe existing rules for overseas listings of Chinese entities and affiliates including potentialextraterritorial application of China’s securities laws. As the opinions are new, officialguidance and implementation rules have not been issued and the final interpretation of andpotential impact from these opinions remain unclear at this stage. As of the date of thisdocument, we have not received any inquiry, notice, warning, or sanction regarding thisoffering from the CSRC or any other PRC regulatory agencies. However, we cannot assure youthat any new rules or regulations promulgated in the future will not impose additionalrequirements on us. As of the date of this document, we have not received any inquiry, notice,warning, or sanction regarding this offering from the CSRC or any other PRC regulatoryagencies.

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The heightened scrutiny over acquisition transactions by the PRC tax authorities mayhave a negative impact on our business operations, our acquisition or restructuringstrategy or the value of your investment in us.

The State Administration of Taxation has issued several rules and notices to tighten the scrutinyover acquisition transactions in recent years, including the Notice on Certain Corporate IncomeTax Matters Related to Indirect Transfer of Properties by Non-PRC Resident Enterprises (《國家稅務總局關於非居民企業間接轉讓財產企業所得稅若干問題的公告》) issued in February2015, or SAT Circular 7. Pursuant to these rules and notices, except for a few circumstancesfalling into the scope of the safe harbor provided by SAT Circular 7, such as open markettrading of stocks in public companies listed overseas, if a non-PRC resident enterpriseindirectly transfers PRC taxable properties (i.e. properties of an establishment or a place in thePRC, real estate properties in the PRC or equity investments in a PRC tax resident enterprise)by disposing of equity interest or other similar rights in an overseas holding company, withouta reasonable commercial purpose and resulting in the avoidance of PRC enterprise income tax,such indirect transfer should be deemed as a direct transfer of PRC taxable properties and gainsderived from such indirect transfer may be subject to the PRC withholding tax at a rate of upto 10%. SAT Circular 7 sets out several factors to be taken into consideration by tax authoritiesin determining whether an indirect transfer has a reasonable commercial purpose, such aswhether the main value of equity interest in an overseas holding company is derived directlyor indirectly from PRC taxable properties. An indirect transfer satisfying all the followingcriteria will be deemed to lack reasonable commercial purpose and be taxable under PRC lawwithout considering other factors set out by SAT Circular 7: (i) 75% or more of the equity valueof the intermediary enterprise being transferred is derived directly or indirectly from the PRCtaxable properties; (ii) at any time during the one-year period before the indirect transfer, 90%or more of the asset value of the intermediary enterprise (excluding cash) is comprised directlyor indirectly of investments in the PRC, or 90% or more of its income is derived directly orindirectly from the PRC; (iii) the functions performed and risks assumed by the intermediaryenterprise and any of its subsidiaries that directly or indirectly hold the PRC taxable propertiesare limited and are insufficient to prove their economic substance; and (iv) the foreign taxpayable on the gain derived from the indirect transfer of the PRC taxable properties is lowerthan the potential PRC income tax on the direct transfer of such assets. SAT Circular 7 alsointroduces an interest regime by providing that where a transferor fails to file and pay tax ontime, and where a withholding agent fails to withhold the tax, interest will be charged on adaily basis. Both the foreign transferor and the transferee, and the PRC tax resident enterprisewhose equity interests are being transferred may voluntarily report the transfer by submittingthe documents required in SAT Circular 7.

Although SAT Circular 7 provides clarity in many important areas, such as reasonablecommercial purpose, there are still uncertainties on the tax reporting and payment obligationswith respect to future private equity financing transactions, share exchange or othertransactions involving the transfer of shares in non-PRC resident companies. Our company andother non-resident enterprises in our group may be subject to filing obligations or being taxedif our company and other non-resident enterprises in our group are transferors in suchtransactions, and may be subject to withholding obligations if our company and othernon-resident enterprises in our group are transferees in such transactions. For the transfer ofshares in our company by investors who are non-PRC resident enterprises, our PRCsubsidiaries may be requested to assist in the filing under the rules and notices. As a result, wemay be required to expend valuable resources to comply with these rules and notices or torequest the relevant transferors from whom we purchase taxable assets to comply, or toestablish that our company and other non-resident enterprises in our group should not be taxedunder these rules and notices, which may have a material adverse effect on our financialcondition and results of operations.

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We cannot assure you that the PRC tax authorities will not, at their discretion, adjust anycapital gains and impose tax return filing obligations on us or require us to provide assistancefor the investigation of PRC tax authorities with respect thereto. In the future, we may conductacquisitions or disposals of properties that may involve complex corporate structures. If thePRC tax authorities make adjustments to the taxable income of these transactions under SATCircular 7, our income tax expenses associated with such potential transactions may beincreased, which may have a material adverse effect on our financial condition and results ofoperations.

We face certain risks relating to the real properties that we lease.

We lease office space for our operations in China. Any defects in lessors’ title to the leasedproperties may disrupt our use of our offices, which may in turn adversely affect our businessoperations. For example, certain buildings and the underlying land are not allowed to be usedfor industrial or commercial purposes without relevant authorities’ approval, and the lease ofsuch buildings to companies like us may subject the lessor to pay premium fees to the PRCgovernment. We cannot assure you that the lessor has obtained all or any of approvals from therelevant governmental authorities. In addition, some of our lessors have not provided us withdocumentation evidencing their title to the relevant leased properties. We cannot assure youthat title to these properties we currently lease will not be challenged. In addition, we have notregistered most of our lease agreements with relevant PRC governmental authorities asrequired by PRC law, and although failure to do so does not in itself invalidate the leases, wemay not be able to defend these leases against bona fide third parties.

As of the Latest Practicable Date, we are not aware of any actions, claims or investigationsbeing contemplated by government authorities with respect to the defects in our leased realproperties or any challenges by third parties to our use of these properties. However, if thirdparties who purport to be property owners or beneficiaries of the mortgaged propertieschallenge our right to use the leased properties, we may not be able to protect our leaseholdinterest and may be ordered to vacate the affected premises, which could in turn materially andadversely affect our business and operating results.

Failure to comply with PRC labor laws and make adequate contributions to variousemployee benefit plans as required by PRC regulations may subject us to penalties.

Companies operating in China are required to register with governmental authorities andparticipate in various government sponsored employee benefit plans, including certain socialinsurance and housing funds, and contribute to these plans in amounts equal to certainpercentages of salaries, including bonuses and allowances, of employees up to a maximumamount specified by the local government authorities from time to time at the locations wherethose employees are based. However, requirements relating to employee benefit plans have notbeen implemented consistently by local governments in China, given the different levels ofeconomic development in different regions. We believe that we have made adequate socialinsurance and housing fund contributions for the majority of our employees, however, wecannot assure you that local governments will not have different views as to what constitutesstrict compliance with the requirements for contributions to employee benefit plans. Our socialinsurance and housing fund contributions for a small number of our employees withperformance-based salaries may not be adequate, as we could not foresee these employees’performance and therefore their salaries accurately. We may be required to make up thecontributions for these employee benefit plans as well as to pay late fees and fines.

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Our significant deposits in certain banks in China may be at risk if these banks gobankrupt or otherwise do not have the liquidity to pay us during our deposit period.

As of June 30, 2021, we had US$2.4 billion in cash and cash equivalent, bank deposits andshort term investments, such as time deposits, with large domestic banks in China. Ourremaining cash, cash equivalents and short-term investments were held by financial institutionsin the United States and Hong Kong. The terms of these deposits are, in general, up to twelvemonths. Historically, deposits in Chinese banks were viewed as secure due to the state policyon protecting depositors’ interests. However, the new Bankruptcy Law that came into effect in2007 contains an article expressly stating that the State Council may promulgateimplementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law,so the law contemplates the possibility that a Chinese bank may go bankrupt. In addition,foreign banks have been gradually permitted to operate in China since China’s accession to theWorld Trade Organization and have become strong competitors of Chinese banks in manyrespects, which may have increased the risk of bankruptcy or illiquidity for Chinese banks,including those in which we have deposits. In the event of bankruptcy or illiquidity of any oneof the banks which holds our deposits, we are unlikely to claim our deposits back in full sincewe are unlikely to be classified as a secured creditor based on PRC laws.

On May 1, 2015, China’s new Deposit Insurance Regulation (《中華人民共和國存款保險條例》) came into effect, pursuant to which banking financial institutions, such as commercialbanks, established in China will be required to purchase deposit insurance for deposits in RMBand in foreign currency. Under this regulation, depositors will be fully indemnified for theirdeposits and interests in an aggregate amount up to a limit of RMB500,000. Deposits orinterests over such limit will only be covered by the bank’s liquidation assets. Therefore,although this requirement to purchase deposit insurance may help, to a certain extent, preventChinese banks from going bankrupt, it would not be effective in providing effective protectionfor our accounts, as our aggregate deposits are much higher than the compensation limit.

Our ADSs may be delisted under the Holding Foreign Companies Accountable Act if thePCAOB is unable to inspect auditors who are located in China. The delisting of our ADSs,or the threat of their being delisted, may materially and adversely affect the value of yourinvestment. Additionally, the inability of the PCAOB to conduct inspections deprives ourinvestors with the benefits of such inspections.

The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December18, 2020. The HFCA Act states if the SEC determines that we have filed audit reports issuedby a registered public accounting firm that has not been subject to inspection by the PCAOBfor three consecutive years beginning in 2021, the SEC shall prohibit our shares or ADSs frombeing traded on a national securities exchange or in the over the counter trading market in theU.S. On November 5, 2021, the SEC approved the PCAOB rule that provides a framework forthe PCAOB to determine whether it is unable to inspect or investigate completely registeredpublic accounting firms located in a foreign jurisdiction because of a position taken by one ormore authorities in that jurisdiction. The rule states that the PCAOB will make thesedeterminations promptly.

Our auditor, the independent registered public accounting firm that issues the audit reportincluded elsewhere in this document, as an auditor of companies that are traded publicly in theUnited States and a firm registered with the PCAOB, is subject to laws in the United Statespursuant to which the PCAOB conducts regular inspections to assess its compliance with theapplicable professional standards. Since our auditor is located in China, a jurisdiction wherethe PCAOB has been unable to conduct inspections without the approval of the Chineseauthorities, our auditor is currently not inspected by the PCAOB.

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On March 24, 2021, the SEC has adopted interim final rules relating to the implementation ofcertain disclosure and documentation requirements of the HFCA Act. We will be required tocomply with these rules if the SEC identifies us as having a “non-inspection” year under aprocess to be subsequently established by the SEC. The SEC is assessing how to implementother requirements of the HFCA Act, including the listing and trading prohibition requirementsdescribed above.

On June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House ofRepresentatives and signed into law, would reduce the number of consecutive non-inspectionyears required for triggering the prohibitions under the HFCA Act from three years to two.

The SEC may propose additional rules or guidance that could impact us if our auditor thatissued the audit report included in our annual report on Form 20-F is not subject to PCAOBinspection. For example, on August 6, 2020, the President’s Working Group on FinancialMarkets, or the PWG, issued the Report on Protecting United States Investors from SignificantRisks from Chinese Companies to the then President of the United States. This reportrecommended the SEC implement five recommendations to address companies fromjurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutorymandate. Some of the concepts of these recommendations were implemented with theenactment of the HFCA Act. However, some of the recommendations were more stringent thanthe HFCA Act. For example, if a company was not subject to PCAOB inspection, the reportrecommended that the transition period before a company would be delisted would end onJanuary 1, 2022.

The SEC has announced that the SEC staff is preparing a consolidated proposal for the rulesregarding the implementation of the HFCA Act and to address the recommendations in thePWG report. It is unclear when the SEC will complete its rulemaking and when such rules willbecome effective and what, if any, of the PWG recommendations will be adopted. Theimplications of this possible regulation in addition the requirements of the HFCA Act areuncertain. Such uncertainty could cause the market price of our ADSs to be materially andadversely affected, and our securities could be delisted or prohibited from being traded“over-the-counter” earlier than would be required by the HFCA Act. If our securities are unableto be listed on another securities exchange by then, such a delisting would substantially impairyour ability to sell or purchase our ADSs when you wish to do so, and the risk and uncertaintyassociated with a potential delisting would have a negative impact on the price of our ADSs.

The PCAOB’s inability to conduct inspections in China prevents it from fully evaluating theaudits and quality control procedures of our independent registered public accounting firm. Asa result, we and investors in our ordinary shares are deprived of the benefits of such PCAOBinspections. The inability of the PCAOB to conduct inspections of auditors in China makes itmore difficult to evaluate the effectiveness of our independent registered public accountingfirm’s audit procedures or quality control procedures as compared to auditors outside of Chinathat are subject to the PCAOB inspections, which could cause investors and potential investorsin our stock to lose confidence in our audit procedures and reported financial information andthe quality of our financial statements.

In May 2013, the PCAOB announced that it had entered into a Memorandum of Understandingon Enforcement Cooperation with the CSRC and the PRC Ministry of Finance, whichestablishes a cooperative framework between the parties for the production and exchange ofaudit documents relevant to investigations undertaken by the PCAOB in the PRC or by theCSRC or the PRC Ministry of Finance in the United States. The PCAOB continues to be indiscussions with the CSRC and the PRC Ministry of Finance to permit joint inspections in thePRC of audit firms that are registered with the PCAOB and audit Chinese companies that tradeon U.S. exchanges.

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Proceedings instituted by the SEC against certain PRC-based accounting firms, includingthe auditor of our consolidated financial statements in our annual reports on Form 20-Ffiled with the SEC, could result in our financial statements being determined to not be incompliance with the requirements of the Securities Exchange Act of 1934, as amended, orthe Exchange Act.

In December 2012, the SEC instituted administrative proceedings against the Big FourPRC-based accounting firms, including the auditor of our consolidated financial statements inour annual reports on Form 20-F filed with the SEC, alleging that these firms had violated U.S.securities laws and the SEC’s rules and regulations thereunder by failing to provide to the SECthe firms’ audit work papers with respect to certain PRC-based companies that are publiclytraded in the United States.

On January 22, 2014, the administrative law judge presiding over the matter rendered an initialdecision that each of the firms had violated the SEC’s rules of practice by failing to produceaudit papers and other documents to the SEC. The initial decision censured each of the firmsand barred them from practicing before the SEC for a period of six months.

On February 6, 2015, the four China-based accounting firms each agreed to a censure and topay a fine to the SEC to settle the dispute and avoid suspension of their ability to practicebefore the SEC and audit U.S.-listed companies. The settlement required the firms to followdetailed procedures and to seek to provide the SEC with access to Chinese firms’ auditdocuments via the CSRC. Under the terms of the settlement, the underlying proceeding againstthe four China-based accounting firms was deemed dismissed with prejudice four years afterentry of the settlement. The four-year mark occurred on February 6, 2019. While we cannotpredict if the SEC will further challenge the four China-based accounting firms’ compliancewith U.S. law in connection with U.S. regulatory requests for audit work papers or if the resultsof such a challenge would result in the SEC imposing penalties such as suspensions, if theaccounting firms are subject to additional remedial measures, our ability to file our financialstatements in compliance with SEC requirements could be impacted. A determination that wehave not timely filed financial statements in compliance with SEC requirements couldultimately lead to the delisting of our ADSs from Nasdaq or the termination of the registrationof our ADSs under the Exchange Act, or both, which would substantially reduce or effectivelyterminate the trading of our ADSs in the United States.

It may be difficult for overseas regulators to conduct investigation or collect evidencewithin China.

Shareholder claims or regulatory investigation that are common in the United States generallyare difficult to pursue as a matter of law or practicality in China. For example, in China, thereare significant legal and other obstacles to providing information needed for regulatoryinvestigations or litigation initiated outside China. Although the authorities in China mayestablish a regulatory cooperation mechanism with the securities regulatory authorities ofanother country or region to implement cross-border supervision and administration, suchcooperation with the securities regulatory authorities in the Unities States may not be efficientin the absence of mutual and practical cooperation mechanism. Furthermore, according toArticle 177 of the PRC Securities Law (《中華人民共和國證券法》), or Article 177, whichbecame effective in March 2020, no overseas securities regulator is allowed to directly conductinvestigation or evidence collection activities within the territory of the PRC. While detailedinterpretation of or implementation rules under Article 177 have yet to be promulgated, theinability for an overseas securities regulator to directly conduct investigation or evidencecollection activities within China may further increase difficulties faced by you in protectingyour interests.

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RISKS RELATING TO OUR SHARES, OUR ADSs AND THE LISTING

As a company applying for listing under Chapter 19C, we adopt different practices as tocertain matters as compared with many other companies listed on the Hong Kong StockExchange.

As we are applying for a listing under Chapter 19C of the Hong Kong Listing Rules, we willnot be subject to certain provisions of the Hong Kong Listing Rules pursuant to Rule 19C.11,including, among others, rules on notifiable transactions, connected transactions, share optionschemes, content of financial statements as well as certain other continuing obligations. Inaddition, in connection with the Listing, we have applied for a number of waivers and/orexemptions from strict compliance with the Hong Kong Listing Rules, the Companies(Winding Up and Miscellaneous Provisions) Ordinance, the Takeovers Codes and the SFO. Asa result, we will adopt different practices as to those matters as compared with other companieslisted on the Hong Kong Stock Exchange that do not enjoy those exemptions or waivers. Foradditional information, see “Waivers and Exemptions.”

Furthermore, if 55% or more of the total worldwide trading volume, by dollar value, of ourClass A ordinary shares and ADSs over our most recent fiscal year takes place on the HongKong Stock Exchange, the Hong Kong Stock Exchange will regard us as having a dual primarylisting in Hong Kong and we will no longer enjoy certain exemptions or waivers from strictcompliance with the requirements under the Hong Kong Listing Rules, the Companies(Winding Up and Miscellaneous Provisions) Ordinance, the Takeovers Codes and the SFO,which could result in us having to amend our corporate structure and Articles of Associationand we may incur of incremental compliance costs.

The trading price for our ADSs has been and is likely to continue be, and the trading priceof our Class A ordinary shares can be, volatile, regardless of our operating performance,which could result in substantial losses to holders of our Class A ordinary shares and/orthe ADSs.

The trading prices of our ADSs has been and is likely to continue to be volatile and couldfluctuate widely in response to in response to a variety of factors, many of which are beyondour control. The trading price of our Class A ordinary shares, likewise, can be volatile forsimilar or different reasons. For example, the trading price of our ADSs ranged from US$28.93to US$52.33 per ADS in 2020. The trading price of our listed securities is likely to remainvolatile and could fluctuate widely due to factors beyond our control. This may happen becauseof broad market and industry factors, like the performance and fluctuation of the market pricesof other companies with business operations located mainly in China that have listed theirsecurities in Hong Kong and/or the United States. A number of Chinese companies have listedor are in the process of listing their securities on stock markets in Hong Kong and/or the UnitedStates. The securities of some of these companies have experienced significant volatility,including price declines in connection with their initial public offerings. The tradingperformances of these Chinese companies’ securities after their offerings may affect theattitudes of investors toward Chinese companies listed in Hong Kong and/or the United Statesin general and consequently may impact the trading performance of our Class A ordinary sharesand/or ADSs, regardless of our actual operating performance.

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In addition to market and industry factors, the price and trading volume for our Class Aordinary shares and/or ADSs may be highly volatile for factors specific to our own operations,including (but not limited to) the following:

• variations in our revenues, earnings, cash flow and data related to our active user base oruser engagement;

• announcements of new investments, acquisitions, strategic partnerships or joint ventures;

• announcements of new services and expansions by us or our competitors;

• changes in financial estimates by securities analysts;

• detrimental adverse publicity about us or SINA;

• additions or departures of key personnel;

• release of lock-up or other transfer restrictions on our outstanding equity securities orsales of additional equity securities; and

• potential litigation or regulatory investigations.

Substantial future sales or perceived potential sales of our Class A ordinary shares, ADSs,or other equity or equity-linked securities in the public market could cause the price ofour Class A ordinary shares and/or ADSs to decline

Sales of our Class A ordinary shares, ADSs, or other equity or equity-linked securities in thepublic market, or the perception that these sales could occur, could cause the market price ofour Class A ordinary shares and/or ADSs to decline significantly. All of our Class A ordinaryshares represented by ADSs were freely transferable by persons other than our affiliateswithout restriction or additional registration under the U.S. Securities Act. The Class Aordinary shares held by our affiliates are also available for sale, subject to volume and otherrestrictions as applicable under Rule 144 of the U.S. Securities Act any applicable lock-upagreement, under trading plans adopted pursuant to Rule 10b5-1 or otherwise. Our controllingshareholders are not subject to the lock up requirements under the Hong Kong Listing Rulesin this Global Offering and the Selling Shareholder will enter into a lock-up undertakingpursuant to the Hong Kong Underwriting Agreement for 90 days which is shorter than thelock-up period under Rule 10.07 of the Hong Kong Listing Rules. Furthermore our controllingshareholders may sell additional shares of us after the expiry of lock-up undertaking. Wecannot predict what effect, if any, market sales of securities held by our controllingshareholders or any other shareholder or the availability of these securities for future sale willhave on the market price of our Shares and ADSs. See “Underwriting” for more detaileddescriptions of the lock-up undertaking by our directors, executive officers and principalshareholders and the restrictions on selling our securities after this Global Offering.

Divesture in the future of our Class A ordinary shares and/or ADSs by shareholders, theannouncement of any plan to divest our Class A ordinary shares and/or ADS, or hedgingactivity by third-party financial institutions in connection with similar derivative or otherfinancing arrangements entered into by shareholders, could cause the price of our Class Aordinary shares and/or ADSs to decline.

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If securities or industry analysts do not publish research or reports about our business,or if they adversely change their recommendations regarding our Class A ordinary sharesand/or ADSs, the trading price for our Class A ordinary shares and/or ADSs and tradingvolume could decline.

The trading market for our Class A ordinary shares and/or ADSs will be influenced by researchor reports that industry or securities analysts publish about our business. If one or moreanalysts who cover us downgrade our Class A ordinary shares and/or ADSs, the trading pricefor our Class A ordinary shares and/or ADSs would likely decline. If one or more of theseanalysts cease to cover us or fail to regularly publish reports on us, we could lose visibility inthe financial markets, which in turn could cause the trading price or trading volume for ourClass A ordinary shares and/or ADSs to decline.

The sale or availability for sale, or perceived sale or availability for sale, of substantialamounts of our listed securities could adversely affect their trading price.

Sales of substantial amounts of our Class A ordinary shares and/or ADSs in the public market,or the perception that these sales could occur, could adversely affect the trading price of ourClass A ordinary shares and/or ADSs and could materially impair our ability to raise capitalthrough equity offerings in the future. We cannot predict what effect, if any, market sales ofsecurities held by our significant shareholders or any other shareholder or the availability ofthese securities for future sale will have on the trading price of our Class A ordinary sharesand/or ADSs.

Our dual-class voting structure will limit your ability to influence corporate matters andcould discourage others from pursuing any change of control transactions that holders ofour Class A ordinary shares and ADSs may view as beneficial.

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares.Holders of Class A ordinary shares are entitled to one vote per share, while holders of ClassB ordinary shares are entitled to three votes per share. All of the outstanding ordinary sharesheld by SINA as of the Latest Practicable Date are Class B ordinary shares. All other ordinaryshares that are outstanding as of the Latest Practicable Date are Class A ordinary shares. Weintend to maintain the dual-class voting structure in the future. Each Class B ordinary share isconvertible into one Class A ordinary share at any time by the holder thereof. Class A ordinaryshares are not convertible into Class B ordinary shares under any circumstances. Upon anytransfer of Class B ordinary shares by a holder thereof to any person or entity which is not anaffiliate (as defined in our Articles of Association) of such holder, such Class B ordinary sharesshall be automatically and immediately converted into the equal number of Class A ordinaryshares. In addition, each Class B ordinary share shall automatically and immediately beconverted into one Class A ordinary share if at any time SINA and its affiliates (as defined inour Articles of Association) in the aggregate hold less than five percent (5%) of the issuedClass B ordinary shares in our company, and no Class B ordinary shares shall be issued by ourcompany thereafter.

Due to the disparate voting powers attached to these two classes of ordinary shares, SINAowned approximately 44.6% of our total issued and outstanding ordinary shares and 70.7% ofthe voting power of our outstanding shares as of June 30, 2021. Therefore, SINA will havedecisive influence over matters requiring shareholders’ approval, including election ofdirectors and significant corporate transactions, such as a merger or sale of our company. Thisconcentrated control will limit your ability to influence corporate matters and could discourageothers from pursuing any potential merger, takeover or other change of control transactions thatholders of Class A ordinary shares and ADSs may view as beneficial.

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Techniques employed by short sellers may drive down the trading price of our Class Aordinary shares and/or ADSs.

Short selling is the practice of selling securities that the seller does not own but rather hasborrowed from a third-party with the intention of buying identical securities back at a later dateto return to the lender. The short seller hopes to profit from a decline in the value of thesecurities between the sale of the borrowed securities and the purchase of the replacementshares, as the short seller expects to pay less in that purchase than it received in the sale. Asit is in the short seller’s interest for the price of the security to decline, many short sellerspublish, or arrange for the publication of, negative opinions regarding the relevant issuer andits business prospects in order to create negative market momentum and generate profits forthemselves after selling a security short. These short attacks have, in the past, led to selling ofshares in the market.

Public companies listed in the United States that have substantially all of their operations inChina have been the subject of short selling. Much of the scrutiny and negative publicity hascentered on allegations of a lack of effective internal control over financial reporting resultingin financial and accounting irregularities and mistakes, inadequate corporate governancepolicies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result,many of these companies are now conducting internal and external investigations into theallegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcementactions.

It is not clear what effect such negative publicity could have on us. If we were to become thesubject of any unfavorable allegations, whether such allegations are proven to be true or untrue,we could have to expend a significant amount of resources to investigate such allegationsand/or defend ourselves. While we would strongly defend against any such short seller attacks,we may be constrained in the manner in which we can proceed against the relevant short sellerby principles of freedom of speech, applicable state law or issues of commercialconfidentiality. Such a situation could be costly and time-consuming and could distract ourmanagement from growing our business. Even if such allegations are ultimately proven to begroundless, allegations against us could severely impact our business operations andstockholder’s equity, and any investment in our Class A ordinary shares and/or ADSs could begreatly reduced or rendered worthless.

Because we do not expect to pay dividends in the foreseeable future, investors must relyon price appreciation of our Class A ordinary shares and/or ADSs for return on theirinvestments.

We currently intend to retain most, if not all, of our available funds and any future earnings tofund the development and growth of our business. As a result, we do not expect to pay any cashdividends in the foreseeable future. Therefore, investors should not rely on an investment inour Class A ordinary shares and/or ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends, subject toCayman Islands law. In addition, our shareholders may by ordinary resolution declaredividends, but no dividend may exceed the amount recommended by our directors. UnderCayman Islands law, our company may pay dividends only out of either profit or sharepremium account, provided that in no circumstances may a dividend be paid if this would resultin our company being unable to pay its debts as they fall due in the ordinary course of business.Even if our board of directors decides to declare and pay dividends, the timing, amount andform of future dividends, if any, will depend on, among other things, our future results ofoperations and cash flow, our capital requirements and surplus, the amount of distributions, if

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any, received by us from our subsidiary, our financial condition, contractual restrictions andother factors deemed relevant by our board of directors. Accordingly, the return to the holdersof our Class A ordinary shares and/or ADSs will likely depend entirely upon any future priceappreciation of our ADSs. There is no guarantee that our listed securities will appreciate invalue in the future or even maintain the price at which the investors purchased these securities.Investors may not realize a return on their investment in our Class A ordinary shares and/orADSs and may even lose their entire investment.

Our shareholders may be subject to PRC income tax on dividends from us or on any gainrealized on the transfer of our Class A ordinary shares and/or ADSs.

Under the Enterprise Income Tax Law and its implementation rules, subject to any applicabletax treaty or similar arrangement between the PRC and the jurisdiction of residence of theholders of our Class A ordinary share and/or ADSs that provides for a different income taxarrangement, PRC withholding tax at the rate of 10% is normally applicable to dividends fromPRC sources payable to investors that are non-PRC resident enterprises, which do not have anestablishment or place of business in the PRC, or which have such establishment or place ofbusiness if the relevant income is not effectively connected with the establishment or place ofbusiness. Any gain realized on the transfer of ADSs or shares by such non-PRC residententerprise investors is also subject to 10% PRC income tax if such gain is regarded as incomederived from sources within the PRC, unless a tax treaty or similar arrangement otherwiseprovides. Under the PRC Individual Income Tax Law and its implementation rules, dividendsfrom sources within the PRC paid to foreign individual investors who are not PRC residentsare generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sourcesrealized by such investors on the transfer of American depositary shares or shares are generallysubject to 20% PRC income tax, in each case, subject to any reduction or exemption set forthin applicable tax treaties and similar arrangements and PRC laws. Although substantially all ofour business operations are in China, it is unclear whether dividends we pay with respect to ourClass A ordinary shares and/or ADSs, or the gain realized from the transfer of our Class Aordinary shares and/or ADSs, would be treated as income derived from sources within the PRCand as a result be subject to PRC income tax if we were considered a PRC resident enterprise,as described above. If PRC income tax were imposed on gains realized through the transfer ofour ADSs or on dividends paid to our non-PRC resident investors, the value of the investmentin our Class A ordinary shares and/or ADSs may be materially and adversely affected.Furthermore, the holders of our Class A ordinary shares and/or ADSs whose jurisdictions ofresidence have tax treaties or similar arrangements with China may not qualify for benefitsunder such tax treaties or arrangements.

We may be classified as a passive foreign investment company under U.S. federal incometax law, which could result in adverse consequences to U.S. investors in our Class Aordinary shares or ADSs.

Depending upon the value of our assets, which is determined based, in part, on the market valueof our Class A ordinary shares and ADSs, and the nature of our assets and income over time,we could be classified as a passive foreign investment company (a “PFIC”) for U.S. federalincome tax purposes. We will be classified as a PFIC for any taxable year if either (i) 75% ormore of our gross income for the taxable year is passive income or (ii) 50% or more of thevalue of our assets (determined on the basis of a quarterly average) is attributable to assets thatproduce or are held for the production of passive income (the “asset test”).

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Although the law in this regard is not entirely clear, we treat our VIEs as being owned by usfor U.S. federal income tax purposes because we control their management decisions and weare entitled to substantially all of their economic benefits, and, as a result, we consolidate theirresults of operations in our consolidated U.S. GAAP financial statements. If it weredetermined, however, that we are not the owner of our VIEs for U.S. federal income taxpurposes, we would likely be treated as a PFIC for our current taxable year and any subsequenttaxable year. Assuming that we are the owner of our VIEs for U.S. federal income tax purposesand based on our income and assets and the value of our Class A ordinary shares and ADSs,we do not expect to be a PFIC for our current taxable year or for the foreseeable future.

Because PFIC status is a factual determination made annually after the close of each taxableyear on the basis of the composition of our income and assets, there can be no assurance thatwe will not be a PFIC for the current taxable year or any future taxable year. Fluctuations inthe market price of our Class A ordinary shares or ADSs may cause us to become a PFIC forthe current or subsequent taxable years because the value of our assets for purposes of the assettest, including the value of our goodwill and unbooked intangibles, may be determined byreference to the market price of our Class A ordinary shares or ADSs from time to time (whichmay be volatile). In estimating the value of our goodwill and other unbooked intangibles, wehave taken into account our current market capitalization. If our market capitalization declines,we may be classified as a PFIC for the current taxable year or future taxable years. In addition,the overall level of our passive assets will be affected by how, and how quickly, we spend ourliquid assets, including the proceeds from this offering. Under circumstances where ourrevenue from activities that produce passive income significantly increase relative to ourrevenue from activities that produce non-passive income, or where we determine not to deploysignificant amounts of cash for active purposes, our risk of becoming classified as a PFIC maysubstantially increase. Furthermore, because there are uncertainties in the application of therelevant rules, it is possible that the Internal Revenue Service may challenge our classificationof certain income or assets as non-passive, or our valuation of our goodwill and other unbookedintangibles, each of which may result in our company becoming classified as a PFIC for thecurrent or subsequent taxable years.

Our Articles of Association contain anti-takeover provisions that could have a materialadverse effect on the rights of holders of our ordinary shares and ADSs.

Our Articles of Association contain provisions to limit the ability of others to acquire controlof our company or cause us to engage in change-of-control transactions. These provisionscould have the effect of depriving our shareholders of an opportunity to sell their shares at apremium over prevailing market prices by discouraging third parties from seeking to obtaincontrol of our company in a tender offer or similar transaction. For example, our board ofdirectors has the authority, without further action by our shareholders, to issue preferred sharesin one or more series and to fix their designations, powers, preferences, privileges, and relativeparticipating, optional or special rights and the qualifications, limitations or restrictions,including dividend rights, conversion rights, voting rights, terms of redemption and liquidationpreferences, any or all of which may be greater than the rights associated with our ordinaryshares, in the form of ADS or otherwise. Preferred shares could be issued quickly with termscalculated to delay or prevent a change in control of our company or make removal ofmanagement more difficult. If our board of directors decides to issue preferred shares, the priceof our Class A ordinary shares and/or ADSs may fall and the voting and other rights of theholders of our ordinary shares and ADSs may be materially and adversely affected.

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Our shareholders may face difficulties in protecting their interests, and the ability toprotect their rights through Hong Kong or U.S. courts may be limited, because we areincorporated under Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands. Ourcorporate affairs are governed by our Articles of Association, the Cayman Companies Act andthe common law of the Cayman Islands. The rights of our shareholders to take action againstour directors, actions by our minority shareholders and the fiduciary duties of our directors toour company under Cayman Islands law are to a large extent governed by the common law ofthe Cayman Islands. The common law of the Cayman Islands is derived in part fromcomparatively limited judicial precedent in the Cayman Islands as well as from the commonlaw of England, the decisions of whose courts are of persuasive authority, but are not binding,on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of ourdirectors under Cayman Islands law are not as clearly established as they would be understatutes or judicial precedent in some jurisdictions in the United States or Hong Kong. Inparticular, the Cayman Islands has a less developed body of securities laws than the UnitedStates. Some U.S. states, such as Delaware, have more fully developed and judiciallyinterpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islandscompanies may not have standing to initiate a shareholder derivative action in a federal courtof the United States or a court in Hong Kong.

The Cayman Islands courts are also unlikely:

• to recognize or enforce against us judgments of courts of the United States based oncertain civil liability provisions of U.S. securities laws; and

• to impose liabilities against us, in original actions brought in the Cayman Islands, basedon certain civil liability provisions of U.S. securities laws that are penal in nature.

In those circumstances, although there is no statutory enforcement in the Cayman Islands ofjudgments obtained in the U.S., the courts of the Cayman Islands will recognize and enforcea foreign money judgment of a foreign court of competent jurisdiction without retrial on themerits based on the principle that a judgment of a competent foreign court imposes upon thejudgment debtor an obligation to pay the sum for which judgment has been given providedcertain conditions are met. For such a foreign judgment to be enforced in the Cayman Islands,such judgment must be final and conclusive and for a liquidated sum, and must not be inrespect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respectof the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be ofa kind the enforcement of which is, contrary to natural justice or the public policy of theCayman Islands (awards of punitive or multiple damages may well be held to be contrary topublic policy). A Cayman Islands court may stay enforcement proceedings if concurrentproceedings are being brought elsewhere.

Certain corporate governance practices in the Cayman Islands, which is our home country,differ significantly from requirements for companies incorporated in other jurisdictions such asthe United States and Hong Kong. To the extent we choose to follow home country practicewith respect to corporate governance matters, our shareholders may be afforded less protectionthan they otherwise would under rules and regulations applicable to U.S. domestic issuers orcompanies incorporated in Hong Kong.

As a result of all of the above, our public shareholders may have more difficulty in protectingtheir interests in the face of actions taken by our management, members of our board ofdirectors or our controlling shareholders than they would as public shareholders of a companyincorporated in the United States.

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Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company and all of our assets are located outside of theUnited States. Substantially all of our current operations are conducted in China. In addition,a majority of our directors and senior management named in this document reside outside theUnited States or Hong Kong. Substantially all of the assets of these persons are located outsidethe United States. As a result, it may be difficult or impossible for our shareholders to bringan action against us or against these individuals in the United States or Hong Kong in the eventthat such shareholders believe that their rights have been infringed under the U.S. federalsecurities laws, Hong Kong laws, or otherwise. Even if such shareholders are successful inbringing an action of this kind, the laws of the Cayman Islands and of China may render suchshareholders unable to enforce a judgment against our assets or the assets of our directors andofficers.

We are a foreign private issuer within the meaning of the rules under the Exchange Act,and as such we are exempt from certain provisions applicable to United States domesticpublic companies.

Because we are a foreign private issuer under the Exchange Act, we are exempt from certainprovisions of the securities rules and regulations in the United States that are applicable to U.S.domestic issuers, including:

• the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Qor current reports on Form 8-K with the SEC;

• the sections of the Exchange Act regulating the solicitation of proxies, consents, orauthorizations in respect of a security registered under the Exchange Act;

• the sections of the Exchange Act requiring insiders to file public reports of their stockownership and trading activities and liability for insiders who profit from trades made ina short period of time;

• the selective disclosure rules by issuers of material nonpublic information underRegulation FD; and

• certain audit committee independence requirements in Rule 10A-3 of the Exchange Act.

We are required to file an annual report on Form 20-F within four months of the end of eachfiscal year. In addition, we intend to publish our results on a quarterly basis through pressreleases, distributed pursuant to the rules and regulations of Nasdaq. Press releases relating tofinancial results and material events will also be furnished to the SEC on Form 6-K. However,the information we are required to file with or furnish to the SEC will be less extensive andless timely compared to that required to be filed with the SEC by U.S. domestic issuers.

In addition, we are permitted by Nasdaq Stock Market Rules to elect to rely, and have electedto rely, on certain exemptions from corporate governance requirements:

• that the board of directors be comprised of a majority of independent directors underNasdaq Rule 5605(b)(1); and

• the requirement that an audit committee be comprised of at least three members underNasdaq Rule 5605(c)(2)(A).

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As a result, you may not be afforded the same protections or information, which would be madeavailable to you, were you investing in a U.S. domestic issuer.

Holders of our ADSs may have fewer rights than holders of our Class A ordinary sharesand must act through the depositary to exercise those rights.

Holders of our ADSs do not have the same rights as our shareholders and may only exercisethe voting rights with respect to the underlying Class A ordinary shares represented by theADSs in accordance with the provisions of the deposit agreement. Holders of ADSs may notattend general meetings of our shareholders or cast any votes directly at such meetings. Underthe deposit agreement, ADS holders must vote by giving voting instructions to the depositary.Under our Articles of Association, the minimum notice period required to be given by ourcompany to our registered shareholders for convening a general meeting is 14 days. When ageneral meeting is convened, ADS holders may not receive sufficient advance notice to enablethem to withdraw the Class A ordinary shares underlying their ADSs and become the registeredholder of such shares prior to the record date for the general meeting to allow you to attend thegeneral meeting and to vote directly with respect to any specific matter or resolution which isto be considered and voted upon at the general meeting. In addition, under our Articles ofAssociation, for the purposes of determining those shareholders who are entitled to attend andvote at any general meeting, our directors may close our register of members and/or fix inadvance a record date for such meeting, and such closure of our register of members or thesetting of such a record date may prevent ADS holders from withdrawing the shares underlyingtheir ADSs and becoming the registered holder of such shares prior to the record date, so thatADS holders would not be able to attend the general meeting or to vote directly. Where anymatter is to be put to a vote at a general meeting, the depositary will endeavor to notify ADSholders of the upcoming vote and will arrange to deliver our voting materials to them. Wecannot assure that ADS holders will receive the voting materials in time to ensure that they caninstruct the depositary to vote the shares underlying their ADSs. Furthermore, the depositaryand its agents will not be responsible for any failure to carry out any instructions to vote, forthe manner in which any vote is cast or for the effect of any such vote. As a result, holders ofADSs may not be able to exercise their right to vote and may lack recourse if the underlyingClass A ordinary shares represented by their ADSs are not voted as they requested.

If holders of ADSs do not give instructions to the depositary as to how to vote atshareholders’ meetings, except in limited circumstances, the depositary for our ADSs willgive us a discretionary proxy to vote the Class A ordinary shares underlying their ADSs,which could adversely affect their interests.

Under the deposit agreement for the ADSs, if holders of ADSs do not timely and properly givevoting instructions to the depositary as to how to vote the shares underlying their ADSs at anyparticular shareholders’ meeting, the depositary will give us (or our nominee) a discretionaryproxy to vote the Class A ordinary shares underlying their ADSs at the shareholders’ meetingunless:

• we have failed to timely provide the depositary with notice of meeting and related votingmaterials;

• we have instructed the depositary that we do not wish a discretionary proxy to be given;

• we have informed the depositary that there is substantial opposition as to a matter to bevoted on at the meeting;

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• a matter to be voted on at the meeting would have a material adverse impact onshareholders; or

• the voting at the meeting is to be made on a show of hands.

The effect of this discretionary proxy is that if holders of ADSs do not timely and properly givevoting instructions to the depositary as to how to vote the Class A shares underlying their ADSsat any particular shareholders’ meeting, they cannot prevent the Class A ordinary sharesunderlying their ADSs from being voted, except under the circumstances described above. Thismay make it more difficult for holders of ADSs to influence the management of our company.Holders of our ordinary shares are not subject to this discretionary proxy.

You may not receive dividends or other distributions on our ordinary shares and you maynot receive any value for them, if it is illegal or impractical to make them available to you.

The depositary of our ADSs has agreed to pay to you the cash dividends or other distributionsit or the custodian receives on ordinary shares or other deposited securities underlying ourADSs, after deducting its fees and expenses. You will receive these distributions in proportionto the number of ordinary shares your ADSs represent. However, the depositary is notresponsible if it decides that it is unlawful or impractical to make a distribution available to anyholders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSsif it consists of securities that require registration under the Securities Act but that are notproperly registered or distributed under an applicable exemption from registration. Thedepositary may also determine that it is not feasible to distribute certain property through themail. Additionally, the value of certain distributions may be less than the cost of mailing them.In these cases, the depositary may determine not to distribute such property. We have noobligation to register under U.S. securities laws any ADSs, ordinary shares, rights or othersecurities received through such distributions. We also have no obligation to take any otheraction to permit the distribution of ADSs, ordinary shares, rights or anything else to holders ofADSs. This means that you may not receive distributions we make on our ordinary shares orany value for them if it is illegal or impractical for us to make them available to you. Theserestrictions may cause a material decline in the value of our ADSs.

Conversion of our convertible notes may dilute the ownership interest of existingshareholders.

We issued US$900 million principal amount of convertible senior notes due 2022 in October2017. The conversion of some or all of these notes may dilute the ownership interests ofexisting shareholders. Any sales in the public market of the Class A ordinary shares or ADSsissuable upon such conversion could adversely affect prevailing market prices of our ADSs andClass A ordinary shares. In addition, the existence of the notes may encourage short selling bymarket participants because the conversion of the notes could depress the market prices of ourClass A ordinary shares and ADSs. The prices of our Class A ordinary shares and ADSs couldbe affected by possible sales of our Class A ordinary shares and ADSs by investors who viewthe convertible senior notes as a more attractive means of equity participation in us and byhedging or arbitrage trading activity, which we expect to occur involving our Class A ordinaryshares and ADSs.

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Our ADS holders may be subject to limitations on transfer of their ADSs.

In certain cases, our ADSs are transferable on the books of the depositary. However, thedepositary may close its books at any time or from time to time when it deems expedient inconnection with the performance of its duties. The depositary may close its books from timeto time for a number of reasons, including in connection with corporate events such as a rightsoffering, during which time the depositary needs to maintain an exact number of ADS holderson its books for a specified period. The depositary may also close its books in emergencies, andon weekends and public holidays. The depositary may refuse to deliver, transfer or registertransfers of our ADSs generally when our share register or the books of the depositary areclosed, or at any time if we or the depositary thinks it is advisable to do so because of anyrequirement of law or of any government or governmental body, or under any provision of thedeposit agreement, or for any other reason.

We incur increased costs as a result of being a public company.

As a public company, we incur significant legal, accounting and other expenses that we did notincur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequentlyimplemented by the SEC and the Nasdaq, impose various requirements on the corporategovernance practices of public companies. We expect these rules and regulations to increaseour legal and financial compliance costs and to make some corporate activities moretime-consuming and costlier. Operating as a public company will make it more difficult andmore expensive for us to obtain director and officer liability insurance, and we may be requiredto accept reduced policy limits and coverage or incur substantially higher costs to obtain thesame or similar coverage. In addition, we incur additional costs associated with our publiccompany reporting requirements. It may also be more difficult for us to find qualified personsto serve on our board of directors or as executive officers.

We will also incur additional costs as a result of the Listing on the Hong Kong Stock Exchange.We are currently evaluating and monitoring developments with respect to these rules andregulations, and we cannot predict or estimate with any degree of certainty the amount ofadditional costs we may incur or the timing of such costs.

We have been and we may again be involved in class action lawsuits in the United States inthe future. For example, we and certain of our current and former directors and officers werenamed as defendants in two putative securities class actions filed in the United States DistrictCourt for the District of New Jersey: Andrew Goldsmith v. Weibo Corporation. et al., CivilAction No. 2:17-cv-04728-SRC-CLW (filed on June 27, 2017) (“Goldsmith Case”) and FengChen v. Weibo Corporation. et al., Civil Action No. 2:17-cv-05694 (filed on August 3, 2017)(“Chen Case”). The Goldsmith Case was purportedly brought on behalf of a class of personswho allegedly suffered damages as a result of their trading in our ADSs between April 27 andJune 22, 2017; the Chen Case was purportedly brought on behalf of a class of persons whoallegedly suffered damages as a result of their trading in our ADSs between April 28, 2016 andJune 19, 2017. Both cases’ complaints alleged that our company’s public filings containedmaterial misstatements and omissions in violation of the federal securities laws. On September28, 2017, the court entered an order appointing a lead plaintiff and consolidating the two cases.On November 27, 2017, the lead plaintiff filed a consolidated class action complaint. OnJanuary 26, 2018, our company and one individual defendant filed a motion to dismiss theamended complaint. On June 6, 2018, the court granted our motion to dismiss the class actioncomplaint. Such lawsuits could divert a significant amount of our management’s attention andother resources from our business and operations, which could harm our results of operationsand require us to incur significant expenses to defend the lawsuits. Any such class action suit,

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whether or not successful, could harm our reputation and restrict our ability to raise capital inthe future. In addition, if a claim is successfully made against us, we may be required to paysignificant damages, which could have a material adverse effect on our financial condition andresults of operations.

Furthermore, our directors and employees may face additional exposure to claims and lawsuitsas a result of their position in other public companies. For example, one of our directors, Mr.Daniel Zhang, was named as a defendant in ongoing putative securities class action lawsuitsfiled in the U.S. against Alibaba Group, a company listed on the New York Stock Exchange(NYSE: BABA), together with certain officers and directors of Alibaba Group, concerning thesuspension of Ant Group’s planned initial public offering and certain antitrust developments,which have subsequently been consolidated. All of these cases concern Mr. Zhang in hiscapacity as the chief executive officer of Alibaba Group. Mr. Zhang was also named as adefendant in ongoing putative securities class action lawsuits filed in the U.S. against anotherU.S. listed company, which remain in their preliminary stages and concern Mr. Zhang in hiscapacity as a director of this U.S. listed company. Mr. Charles Chao, our chairman of the boardof directors, was named as a defendant in ongoing putative securities class action lawsuits filedin the U.S. against another U.S. listed company in connection with a management buyout,which concern Mr. Chao in his capacity as a director of this public company and as an officerof a buyer group member. The securities class action was dismissed on September 29, 2021.On October 20, 2021, plaintiffs informed the court that they would not file an amendedcomplaint. As of the date of this document, plaintiffs have not filed a Notice of Appeal. Theexistence of the litigation, claims, investigations and proceedings against our directors andemployees, even if they do not involve our Company, may harm our reputation and adverselyaffect the trading price of our shares and/or ADSs.

The different characteristics of the capital markets in Hong Kong and the U.S. maynegatively affect the trading prices of our Class A ordinary shares and/or ADSs.

Upon the Listing, we will be subject to Hong Kong and Nasdaq listing and regulatoryrequirements concurrently. The Hong Kong Stock Exchange and Nasdaq have different tradinghours, trading characteristics (including trading volume and liquidity), trading and listingrules, and investor bases (including different levels of retail and institutional participation). Asa result of these differences, the trading prices of our Class A ordinary shares and our ADSsmay not be the same, even allowing for currency differences. Fluctuations in the price of ourADSs due to circumstances peculiar to the U.S. capital markets could materially and adverselyaffect the price of our Class A ordinary shares, or vice versa. Certain events having significantnegative impact specifically on the U.S. capital markets may result in a decline in the tradingprice of our Class A ordinary shares notwithstanding that such event may not impact the tradingprices of securities listed in Hong Kong generally or to the same extent, or vice versa. Becauseof the different characteristics of the U.S. and Hong Kong capital markets, the historical marketprices of our ADSs may not be indicative of the trading performance of our Class A ordinaryshares after the Global Offering.

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Exchange between our Class A ordinary shares and our ADSs may adversely affect theliquidity and/or trading price of each other.

Our ADSs are currently traded on Nasdaq. Subject to compliance with U.S. securities law andthe terms of the deposit agreement, holders of our Class A ordinary shares may deposit ClassA ordinary shares with the depositary in exchange for the issuance of our ADSs. Any holderof ADSs may also withdraw the underlying Class A ordinary shares represented by the ADSspursuant to the terms of the deposit agreement for trading on the Hong Kong Stock Exchange.In the event that a substantial number of Class A ordinary shares are deposited with thedepositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class Aordinary shares on the Hong Kong Stock Exchange and our ADSs on the Nasdaq may beadversely affected.

The time required for the exchange between our Class A ordinary shares and ADSs mightbe longer than expected and investors might not be able to settle or effect any sale of theirsecurities during this period, and the exchange of Class A ordinary shares into ADSsinvolves costs.

There is no direct trading or settlement between the Nasdaq and the Hong Kong StockExchange on which our ADSs and our Class A ordinary shares are respectively traded. Inaddition, the time differences between Hong Kong and New York, unforeseen marketcircumstances or other factors may delay the deposit of Class A ordinary shares in exchangefor ADSs or the withdrawal of Class A ordinary shares underlying the ADSs. Investors will beprevented from settling or effecting the sale of their securities during such periods of delay. Inaddition, there is no assurance that any exchange for Class A ordinary shares into ADSs (andvice versa) will be completed in accordance with the timelines that investors may anticipate.

Furthermore, the depositary for the ADSs is entitled to charge holders fees for various servicesincluding for the issuance of ADSs upon deposit of Class A ordinary shares, cancelation ofADSs, distributions of cash dividends or other cash distributions, distributions of ADSspursuant to share dividends or other free share distributions, distributions of securities otherthan ADSs and annual service fees. As a result, shareholders who exchange Class A ordinaryshares into ADSs, and vice versa, may not achieve the level of economic return theshareholders may anticipate.

RISKS RELATING TO THE GLOBAL OFFERING

An active trading market for our Class A ordinary shares on the Hong Kong StockExchange might not develop or be sustained and trading prices of our Class A ordinaryshares might fluctuate significantly.

Following the completion of the Global Offering, we cannot assure you that an active tradingmarket for our Class A ordinary shares on the Hong Kong Stock Exchange will develop or besustained. The trading price or liquidity for our ADSs on the Nasdaq might not be indicativeof those of our Class A ordinary shares on the Hong Kong Stock Exchange following thecompletion of the Global Offering. If an active trading market of our Class A ordinary shareson the Hong Kong Stock Exchange does not develop or is not sustained after the GlobalOffering, the market price and liquidity of our Class A ordinary shares could be materially andadversely affected.

RISK FACTORS

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In 2014, the Hong Kong, Shanghai and Shenzhen Stock Exchanges collaborated to create aninter-exchange trading mechanism called Stock Connect that allows international and mainlandChinese investors to trade eligible equity securities listed in each other’s markets through thetrading and clearing facilities of their home exchange. Stock Connect currently covers over2,000 equity securities trading in the Hong Kong, Shanghai and Shenzhen markets. StockConnect allows mainland Chinese investors to trade directly in eligible equity securities listedon the Hong Kong Stock Exchange, known as Southbound Trading; without Stock Connect,mainland Chinese investors would not otherwise have a direct and established means ofengaging in Southbound Trading. In October 2019, the Shanghai and Shenzhen StockExchanges separately announced their amended implementation rules in connection withSouthbound Trading to include shares of WVR companies to be traded through Stock Connect.However, since these rules are relatively new, there remains uncertainty as to theimplementation details, especially with respect to shares of those companies with a secondarylisting on the Hong Kong Stock Exchange. It is unclear whether and when the Class A ordinaryshares of our Company, a WVR company with a secondary listing in Hong Kong upon theListing, will be eligible to be traded through Stock Connect, if at all. The ineligibility or anydelay of our Class A ordinary shares for trading through Stock Connect will affect mainlandChinese investors’ ability to trade our Class A ordinary shares and therefore may limit theliquidity of the trading of our Class A ordinary shares on the Hong Kong Stock Exchange.

During the period between pricing and trading of our Class A ordinary shares inconnection with this offering, the price of our ADSs traded on Nasdaq may fall, whichcould result in a fall in the price of our Class A ordinary shares to be traded on the HongKong Stock Exchange.

The pricing of the Offer Shares will be determined on the Price Determination Date. However,our Class A ordinary shares will not commence trading on the Hong Kong Stock Exchange untilthey are delivered, which is expected to be about four Hong Kong business days after the PriceDetermination Date. As a result, investors may not be able to sell or otherwise deal in our ClassA ordinary shares during that period. Accordingly, holders of our Class A ordinary shares aresubject to the risk that the trading price of our Class A ordinary shares could fall when tradingcommences as a result of adverse market conditions or other adverse developments that couldoccur between the Price Determination Date and the time trading begins. In particular, as ourADSs will continue to be traded on the Nasdaq and their price can be volatile, any fall in theprice of our ADSs may result in a fall in the price of our Class A ordinary shares to be tradedon the Hong Kong Stock Exchange.

There is uncertainty as to whether Hong Kong stamp duty will apply to the trading orconversion of our ADSs following our initial public offering in Hong Kong and the listingof our Class A ordinary shares on the Hong Kong Stock Exchange.

In connection with our initial public offering of Class A ordinary shares in Hong Kong, or theHong Kong IPO, we will establish a branch register of members in Hong Kong, or the HongKong share register. Our Class A ordinary shares that are traded on the Hong Kong StockExchange, including those to be issued in the Hong Kong IPO and those that may be convertedfrom ADSs, will be registered on the Hong Kong share register, and the trading of these ClassA ordinary shares on the Hong Kong Stock Exchange will be subject to the Hong Kong stampduty. To facilitate ADS-ordinary share conversion and trading between the Nasdaq and theHong Kong Stock Exchange, we also intend to move a portion of our issued Class A ordinaryshares from our register of members maintained in the Cayman Islands to our Hong Kong shareregister.

RISK FACTORS

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Under the Hong Kong Stamp Duty Ordinance, any person who effects any sale or purchase ofHong Kong stock, defined as stock the transfer of which is required to be registered in HongKong, is required to pay Hong Kong stamp duty. The stamp duty is currently set at a total rateof 0.26% of the greater of the consideration for, or the value of, shares transferred, with 0.13%payable by each of the buyer and the seller. See “Information About this Document and theGlobal Offering — Dealings and Settlement of Class A Ordinary Shares in Hong Kong.”

To the best of our knowledge, Hong Kong stamp duty has not been levied in practice on thetrading or conversion of ADSs of companies that are listed in both the United States and HongKong and that have maintained all or a portion of their ordinary shares, including ordinaryshares underlying ADSs, in their Hong Kong share registers. However, it is unclear whether,as a matter of Hong Kong law, the trading or conversion of ADSs of these dual-listedcompanies constitutes a sale or purchase of the underlying Hong Kong-registered ordinaryshares that is subject to Hong Kong stamp duty. We advise investors to consult their own taxadvisors on this matter. If Hong Kong stamp duty is determined by the competent authority toapply to the trading or conversion of our ADSs, the trading price and the value of yourinvestment in our Class A ordinary shares and/or ADSs may be affected.

Purchasers of our Class A ordinary shares in the Global Offering will experienceimmediate dilution and may experience further dilution if we issue additional Class Aordinary shares in the future.

The initial Public Offer Price of our Class A ordinary shares in Hong Kong is higher than thenet tangible assets per Share of the outstanding Class A ordinary shares issued to our existingshareholders immediately prior to the Global Offering. Therefore, purchasers of our Class Aordinary shares in the Global Offering will experience an immediate dilution in terms of thepro forma net tangible asset value. In addition, we may consider offering and issuing additionalClass A ordinary shares or equity-related securities in the future to raise additional funds,finance acquisitions or for other purposes. Purchasers of our Class A ordinary shares mayexperience further dilution in terms of the net tangible asset value per Share if we issueadditional Class A ordinary shares in the future at a price that is lower than the net tangibleasset value per Share.

RISK FACTORS

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DIRECTORS’ RESPONSIBILITY STATEMENT

This document, for which our directors (including any proposed director who is named as suchin this document) collectively and individually accept full responsibility, includes particularsgiven in compliance with the Companies (Winding Up and Miscellaneous Provisions)Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Lawsof Hong Kong) and the Hong Kong Listing Rules for the purpose of giving information withregard to us. Our directors, having made all reasonable enquiries, confirm that, to the best oftheir knowledge and belief, the information contained in this document is accurate andcomplete in all material respects and not misleading or deceptive, and there are no othermatters the omission of which would make any statement herein or this document misleading.

THE HONG KONG PUBLIC OFFERING AND THIS DOCUMENT

This document is published solely in connection with the Hong Kong Public Offering, whichforms part of the Global Offering. For applicants under the Hong Kong Public Offering, thisdocument sets out the terms and conditions of the Hong Kong Public Offering.

The Hong Kong Offer Shares are offered solely on the basis of the information contained andrepresentations made in this document and on the terms and subject to the conditions set outherein and therein. No person is authorized to give any information in connection with theGlobal Offering or to make any representation not contained in this document, and anyinformation or representation not contained herein must not be relied upon as having beenauthorized by our Company, the Joint Sponsors, the Joint Representatives, the Joint GlobalCoordinators, the Joint Bookrunners, the Joint Lead Managers and any of the Underwriters, anyof their respective directors, agents, employees or advisers or any other party involved in theGlobal Offering.

The Listing is sponsored by the Joint Sponsors and the Global Offering is managed by the JointRepresentatives. The Hong Kong Public Offering is fully underwritten by the Hong KongUnderwriters under the terms and conditions of the Hong Kong Underwriting Agreement andis subject to us and the Joint Representatives (for themselves and on behalf of theUnderwriters) agreeing on the pricing of the Hong Kong Offer Shares. The InternationalOffering is expected to be fully underwritten by the International Underwriters subject to theterms and conditions of the International Underwriting Agreement, which is expected to beentered into on or around the Price Determination Date.

Neither the delivery of this document nor any offering, sale or delivery made in connectionwith the Shares should, under any circumstances, constitute a representation that there has beenno change or development reasonably likely to involve a change in our affairs since the dateof this document or imply that the information contained in this document is correct as of anydate subsequent to the date of this document.

PROCEDURES FOR APPLICATION FOR THE HONG KONG OFFER SHARES

The procedures for applying for the Hong Kong Offer Shares are set out in “How to Apply forHong Kong Offer Shares”.

STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING

Details of the structure of the Global Offering, including its conditions, are set out in“Structure of the Global Offering”.

INFORMATION ABOUT THIS DOCUMENT AND THE GLOBAL OFFERING

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OVER-ALLOTMENT OPTION AND STABILIZATION

Details of the arrangements relating to the Over-allotment Option and stabilization are set outin “Structure of the Global Offering”.

RESTRICTIONS ON OFFERS AND SALES OF CLASS A ORDINARY SHARES

Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering willbe required to, or be deemed by his/her acquisition of Offer Shares to, confirm that he/she isaware of the restrictions on offers of the Offer Shares described in this document.

No action has been taken to permit a public offering of the Offer Shares (except for aregistration of Shares on a registration statement on Form F-3 to be filed with the SEC) or thegeneral distribution of this document in any jurisdiction other than in Hong Kong or the UnitedStates. Accordingly, this document may not be used for the purposes of, and does notconstitute, an offer or invitation in any jurisdiction or in any circumstances in which such anoffer or invitation is not authorized or to any person to whom it is unlawful to make such anoffer or invitation. The distribution of this document and the offering of the Offer Shares inother jurisdictions are subject to restrictions and may not be made except as permitted underthe applicable securities laws of such jurisdictions and pursuant to registration with orauthorization by the relevant securities regulatory authorities or an exemption therefrom.

COMMENCEMENT OF DEALINGS IN OUR CLASS A ORDINARY SHARES

We expect that dealings in our Class A ordinary shares on the Hong Kong Stock Exchange willcommence on December 8, 2021. The Class A ordinary shares will be traded in board lots of20 Class A ordinary shares each. The stock code of our Class A ordinary shares will be 9898.

CLASS A ORDINARY SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

If the Hong Kong Stock Exchange grants the listing of, and permission to deal in, our ClassA ordinary shares and we comply with the stock admission requirements of HKSCC, our ClassA ordinary shares will be accepted as eligible securities by HKSCC for deposit, clearance andsettlement in CCASS with effect from the Listing Date or any other date as determined byHKSCC. Settlement of transactions between participants of the Hong Kong Stock Exchange isrequired to take place in CCASS on the second settlement day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASSOperational Procedures in effect from time to time.

Investors should seek the advice of their stockbroker or other professional advisers for detailsof the settlement arrangement as such arrangements may affect their rights and interests. Allnecessary arrangements have been made to enable our Class A ordinary shares to be admittedinto CCASS.

PROFESSIONAL TAX ADVICE RECOMMENDED

You should consult your professional advisers if you are in any doubt as to the taxationimplications of subscribing for, purchasing, holding or disposing of, or dealing in, our ClassA ordinary shares or ADSs or exercising any rights attaching to our Shares. We emphasize thatnone of our Company, the Selling Shareholder, the Joint Sponsors, the Joint Representatives,the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, theUnderwriters, any of our or their respective directors, officers or representatives or any otherperson involved in the Global Offering accepts responsibility for any tax effects or liabilitiesresulting from your subscription, purchase, holding or disposing of, or dealing in, our Class Aordinary shares or ADSs or your exercise of any rights attaching to our Class A ordinary shares.


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REGISTER OF MEMBERS AND STAMP DUTY

Our principal register of members will be maintained by our Principal Share Registrar in theCayman Islands, and our Hong Kong register of members will be maintained by our HongKong Share Registrar in Hong Kong.

Dealings in our Class A ordinary shares registered on our Hong Kong share register will besubject to Hong Kong stamp duty. The stamp duty is charged to each of the seller and purchaserat the ad valorem rate of 0.13% of the consideration for, or (if greater) the value of, our ClassA ordinary shares transferred. In other words, a total of 0.26% is currently payable on a typicalsale and purchase transaction of our Class A ordinary shares. In addition, a fixed duty ofHK$5.00 is charged on each instrument of transfer (if required).

To facilitate ADS-ordinary share conversion and trading between the Nasdaq and the HongKong Stock Exchange, we also intend to move a portion of our issued ordinary shares from ourCayman share register to our Hong Kong share register. It is unclear whether, as a matter ofHong Kong law, the trading of ADSs representing Class A ordinary shares constitutes a sale orpurchase of the underlying Hong Kong-registered Class A ordinary shares that is subject toHong Kong stamp duty. We advise investors to consult their own tax advisors on this matter.See “Risk Factors — Risks Relating to the Global Offering — There is uncertainty as towhether Hong Kong stamp duty will apply to the trading or conversion of our ADSs followingour initial public offering in Hong Kong and the listing of our Class A ordinary shares on theHong Kong Stock Exchange.”

EXCHANGE RATE CONVERSION

Our reporting currency is U.S. dollars. This document contains translations of financial data inRenminbi and Hong Kong dollar amounts into U.S. dollars at specific rates solely for theconvenience of the reader. Unless otherwise stated, all translations of financial data inRenminbi and Hong Kong dollars into U.S. dollars and from U.S. dollars into Renminbi in thisdocument were made at a rate of RMB6.3863 to US$1.00 and HK$7.7915 to US$1.00, therespective exchange rate on November 19, 2021 set out in the H.10 statistical release of theFederal Reserve Board.

No representation is made that any amounts in Renminbi or U.S. dollars were or could havebeen or could be converted into Hong Kong dollars at such rates or any other exchange rateson such date or any other date.

ROUNDING

Certain amounts and percentage figures included in this document have been subject torounding adjustments. Accordingly, figures shown as totals in certain tables may not be anarithmetic aggregation of the figures preceding them.

LANGUAGE

If there is any inconsistency between the English version of this document and its Chinesetranslation, the English version shall prevail, provided that if there is any inconsistencybetween the Chinese names of the entities or enterprises established in the PRC mentioned inthis document and their English translations, the Chinese names shall prevail. The Englishtranslations of the Chinese names of such PRC entities or enterprises are provided foridentification purposes only.


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OTHER

Unless otherwise specified, all references to any shareholdings in our Company following thecompletion of the Global Offering assume that the Over-allotment Option is not exercised.

THE LISTING

We have applied for a listing of our Class A ordinary shares on the Main Board under Chapter19C (Secondary Listings of Qualifying Issuers) as well as Chapter 8A (Weighted VotingRights) of the Hong Kong Listing Rules.

We have a track record of good regulatory compliance of at least two full financial years onthe Nasdaq as required by Rule 19C.04 of the Hong Kong Listing Rules for the purposes of ourListing.

We have applied to the Listing Committee for the listing of, and permission to deal in, ourClass A ordinary shares in issue, including a portion of outstanding Class A ordinary sharesrepresented by our ADSs, and to be issued pursuant to the Global Offering (including the ClassA ordinary shares which may be sold by the Selling Shareholder pursuant to the exercise of theOver-allotment Option) and Class A ordinary shares to be issued pursuant to the ShareIncentive Plans, including pursuant to the exercise of options or other awards that have beenor may be granted from time to time and the Class A ordinary shares to be issued after theconversion of our Class B ordinary shares into Class A ordinary shares.

Our ADSs are currently listed and traded on the Nasdaq. We also have outstanding debtsecurities listed and traded on Hong Kong Stock Exchange. Other than the foregoing, no partof our Shares or loan capital is listed on or traded on any other stock exchange and no suchlisting or permission to list is being or proposed to be sought. All Offer Shares will beregistered on the Hong Kong Share Registrar in order to enable them to be traded on the HongKong Stock Exchange.

Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)Ordinance, any allotment made in respect of any application will be invalid if the listing of,and permission to deal in, our Class A ordinary shares on the Hong Kong Stock Exchange isrefused before the expiration of three weeks from the date of the closing of the application lists,or such longer period (not exceeding six weeks) as may, within the said three weeks, be notifiedto us by or on behalf of the Hong Kong Stock Exchange.

REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF SHARES

Our register of members holding unlisted Shares and a portion of our Class A ordinary sharesrepresented by the ADSs will be maintained by our Principal Share Registrar in the CaymanIslands, and our register of members holding Class A ordinary shares listed on the Hong KongStock Exchange and a portion of our Class A ordinary shares represented by the ADSs will bemaintained by our Hong Kong Share Registrar, Computershare Hong Kong Investor ServicesLimited, in Hong Kong.


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Ownership of ADSs

An owner of ADSs may hold his or her ADRs (evidencing the ADSs) either (a) directly, byhaving an ADR in physical certificated form registered in his or her name, (b) indirectly,through a brokerage or safekeeping account, or (c) by holding a “Direct Registration ADR” inbook-entry form through a participant, or a broker’s participant, in the “Direct RegistrationSystem,” the system established by the Depositary Trust Company (“DTC”) for theuncertificated registration of ownership of securities utilized by the depositary to record theownership of ADRs without the issuance of certificates, in which case the ownership isevidenced by periodic statements issued by the Depositary to the holders of ADRs entitledthereto. If an owner of ADSs decides to hold his or her ADSs through his or her brokerage orsafekeeping account, he or she must rely on the procedures of his or her broker or bank to asserthis or her rights as ADS owner. Banks and brokers typically hold securities such as the ADSsthrough participants in the DTC clearing and settlement system. ADSs held through DTC willbe registered in the name of a nominee of DTC.

DEALINGS AND SETTLEMENT OF CLASS A ORDINARY SHARES IN HONG KONG

Our Class A ordinary shares will trade on the Hong Kong Stock Exchange in board lots of 20ordinary shares. Dealings in our Class A ordinary shares on the Hong Kong Stock Exchangewill be conducted in Hong Kong dollars.

The transaction costs of dealings in our Class A ordinary shares on the Hong Kong StockExchange include:

(a) Hong Kong Stock Exchange trading fee of 0.005% of the consideration of the transaction,charged to each of the buyer and seller;

(b) SFC transaction levy of 0.0027% of the consideration of the transaction, charged to eachof the buyer and seller;

(c) trading tariff of HK$0.50 on each and every purchase or sale transaction. The decision onwhether or not to pass the trading tariff onto investors is at the discretion of brokers;

(d) transfer deed stamp duty of HK$5.00 per transfer deed (if applicable), payable by theseller;

(e) ad valorem stamp duty at a total rate of 0.26% of the value of the transaction, with 0.13%payable by each of the buyer and the seller;

(f) stock settlement fee, which is currently 0.002% of the gross transaction value, subject toa minimum fee of HK$2.00 and a maximum fee of HK$100.00 per side per trade;

(g) brokerage commission, which is freely negotiable with the broker (other than brokeragecommissions for IPO transactions which are currently set at 1% of the subscription orpurchase price and will be payable by the person subscribing for or purchasing thesecurities); and

(h) the Hong Kong share registrar will charge between HK$2.50 to HK$20, depending on thespeed of service (or such higher fee as may from time to time be permitted under the HongKong Listing Rules), for each transfer of ordinary shares from one registered owner toanother, each share certificate canceled or issued by it and any applicable fee as stated inthe share transfer forms used in Hong Kong.


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Investors must settle their trades executed on the Hong Kong Stock Exchange through theirbrokers directly or through custodians. For an investor who has deposited his/her Class Aordinary shares in his/her stock account or in his/her designated CCASS participant’s stockaccount maintained with CCASS, settlement will be effected in CCASS in accordance with theGeneral Rules of CCASS and CCASS Operational Procedures in effect from time to time. Foran investor who holds the physical certificates, settlement certificates and the duly executedtransfer forms must be delivered to his/her broker or custodian before the settlement date.

CONVERSION BETWEEN CLASS A ORDINARY SHARES TRADING IN HONGKONG AND ADSs

In connection with the initial public offering of our Class A ordinary shares in Hong Kong, orthe Hong Kong Public Offering, we have established a branch register of members in HongKong, or the Hong Kong share register, which will be maintained by our Hong Kong ShareRegistrar, Computershare Hong Kong Investor Services Limited. Our principal register ofmembers, or the Cayman share register, will continue to be maintained by our Principal ShareRegistrar, Global Incorporation Centre Limited, in the Cayman Islands.

All Class A ordinary shares offered in the Global Offering will be registered on the Hong Kongshare register in order to be listed and traded on the Hong Kong Stock Exchange. As describedin further detail below, holders of Class A ordinary shares registered on the Hong Kong shareregister will be able to convert these shares into ADSs, and vice versa.

In connection with the Hong Kong Public Offering, and to facilitate fungibility and conversionbetween ADSs and Class A ordinary shares and trading between Nasdaq and the Hong KongStock Exchange, we intend to move a portion of our issued Class A ordinary shares from ourregister of members maintained in the Cayman Islands to our Hong Kong share register.

Following the listing of our Class A ordinary shares on the Hong Kong Stock Exchange, alldeposits of Class A ordinary shares for the issuance of ADSs and all withdrawals of Class Aordinary shares upon the cancellation of ADSs will be in the form of Class A ordinary sharesregistered on our Hong Kong share register and all corporate actions with respect thereto willbe processed via the depositary’s custodian account at CCASS, subject to the rules andprocedures applicable to CCASS – eligible securities, subject, in each case, to certainexceptions described below and provided that the foregoing shall not apply to certain of ourrestricted Class A ordinary shares and Class A ordinary shares as determined by the Companyand the depositary, which will be via our Principal Register in the Cayman Islands.

OUR ADSs

Our ADSs are currently traded on the Nasdaq. Dealings in our ADSs on the Nasdaq areconducted in U.S. Dollars.

ADSs may be held either:

(a) directly, by having an ADR in physical certificated form registered in his or her name,

(b) indirectly, through a brokerage or safekeeping account, or


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(c) by holding a “Direct Registration ADR” in book-entry form through a participant, or abroker’s participant, in the “Direct Registration System,” the system established by theDepositary Trust Company (“DTC”) for the uncertificated registration of ownership ofsecurities utilized by the depositary to record the ownership of ADRs without the issuanceof certificates, in which case the ownership is evidenced by periodic statements issued bythe Depositary to the holders of ADRs entitled thereto.

If an owner of ADSs decides to hold his or her ADSs through his or her brokerage orsafekeeping account, he or she must rely on the procedures of his or her broker or bank to asserthis or her rights as ADS owner. Banks and brokers typically hold securities such as the ADSsthrough participants in the DTC clearing and settlement system. ADSs held through DTC willbe registered in the name of a nominee of DTC directly, by having a certificated ADS, or anAmerican Depositary Receipt (ADR), registered in the holder’s name, or by holding in thedirect registration system, pursuant to which the depositary may register the ownership ofuncertificated ADSs, which ownership shall be evidenced by periodic statements issued by thedepositary to the ADS holders entitled thereto.

The depositary for our ADSs is JPMorgan Chase Bank, N.A., whose office is located at 383Madison Avenue, Floor 11, New York, New York 10179, United States of America.

Converting Class A Ordinary Shares trading in Hong Kong into ADSs

An investor who holds Class A ordinary shares registered in Hong Kong and who intends toconvert them to ADSs to trade on the Nasdaq must deposit or have his or her broker depositthe Class A ordinary shares with the depositary’s Hong Kong custodian, JPMorgan Chase Bank,N.A., Hong Kong Branch, or the custodian, in exchange for ADSs.

A deposit of Class A ordinary shares trading in Hong Kong in exchange for ADSs involves thefollowing procedures:

(a) If Class A ordinary shares have been deposited with CCASS, the investor must transferClass A ordinary shares to the depositary’s account with the custodian within CCASS byfollowing the CCASS procedures for transfer and submit and deliver a duly completedand signed letter of transmittal to the custodian via his or her broker.

(b) If Class A ordinary shares are held outside CCASS, the investor must arrange to deposithis or her Class A ordinary shares into CCASS for delivery to the depositary’s accountwith the custodian within CCASS, submit and deliver a duly completed and signed letterof transmittal to the custodian via his or her broker.

(c) Upon payment of its fees and expenses, payment or net of the Depositary’s fees andexpenses, and payment of any taxes or charges, such as stamp taxes or stock transfer taxesor fees, if applicable, and subject in all cases to the terms of the deposit agreement, thedepositary will issue the corresponding number of ADSs in the name(s) requested by aninvestor and will deliver the ADSs to the designated DTC account of the person(s)designated by an investor or his or her broker if such ADSs are to be held in book-entryform through DTC’s “Direct Registration System.”


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For Class A ordinary shares deposited in CCASS, under normal circumstances, the above stepsgenerally require two business days. For Class A ordinary shares held outside CCASS inphysical form, the above steps may take 14 business days, or more, to complete. Temporarydelays may arise. For example, the transfer books of the depositary may from time to time beclosed to ADS issuances. The investor will be unable to trade the ADSs until the proceduresare completed.

Converting ADSs to Class A ordinary shares trading in Hong Kong

An investor who holds ADSs and who intends to convert his/her ADSs into Class A ordinaryshares to trade on the Hong Kong Stock Exchange must cancel the ADSs the investor holds andwithdraw Class A ordinary shares from our ADS program and cause his or her broker or otherfinancial institution to trade such Class A ordinary shares on the Hong Kong Stock Exchange.

An investor that holds ADSs indirectly through a broker should follow the broker’s procedureand instruct the broker to arrange for cancelation of the ADSs, and transfer of the underlyingClass A ordinary shares from the depositary’s account with the custodian within the CCASSsystem to the investor’s Hong Kong stock account.

For investors holding ADSs directly, the following steps must be taken:

(a) To withdraw Class A ordinary shares from our ADS program, an investor who holds ADSsmay turn in such ADSs at the office of the depositary (and the applicable ADR(s) if theADSs are held in certificated form), and send an instruction to cancel such ADSs to thedepositary.

(b) Upon payment or net of its fees and expenses, payment of CCASS’ fees and expenses, andpayment of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, ifapplicable, and subject in all cases to the terms of the deposit agreement, the depositarywill instruct the custodian to deliver Class A ordinary shares underlying the canceledADSs to the CCASS account designated by an investor.

(c) If an investor prefers to receive Class A ordinary shares outside CCASS, he or she mustreceive ordinary shares in CCASS first and then arrange for withdrawal from CCASS.Investors can then obtain a transfer form signed by HKSCC Nominees Limited (as thetransferor) and register Class A ordinary shares in their own names with the Hong Kongshare registrar.

For Class A ordinary shares to be received in CCASS, under normal circumstances, the abovesteps generally require two business days. For Class A ordinary shares to be received outsideCCASS in physical form, the above steps may take 14 business days, or more, to complete. Theinvestor will be unable to trade the Class A ordinary shares on the Hong Kong Stock Exchangeuntil the procedures are completed.

Temporary delays may arise. For example, the transfer books of the depositary may from timeto time be closed to ADS cancelations. In addition, completion of the above steps andprocedures is subject to there being a sufficient number of Class A ordinary shares on the HongKong share register to facilitate a withdrawal from the ADS program directly into the CCASSsystem. We are not under any obligation to maintain or increase the number of Class A ordinaryshares on the Hong Kong share register to facilitate such withdrawals.


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Depositary requirements

Before the depositary issues ADSs or permits withdrawal of Class A ordinary shares, thedepositary may require:

(a) payment of all amounts required pursuant to the deposit agreement, including the issuanceand cancellation fees therein, any stock transfer or other tax or other governmentalcharges and any stock transfer or registration fees in effect;

(b) production of satisfactory proof of the identity and genuineness of any signature or otherinformation it deems necessary; and

(c) compliance with procedures it may establish, from time to time, consistent with thedeposit agreement, including, but not limited to, presentation of transfer documents.

The depositary may refuse to deliver, transfer, or register issuances, transfers and cancelationsof ADSs generally when the transfer books of the depositary or our Hong Kong share registrarare closed or at any time if the depositary or we determine it advisable to do so.

All costs attributable to the transfer of Class A ordinary shares to effect a withdrawal from ordeposit of Class A ordinary shares into our ADS program will be borne by the investorrequesting the transfer. In particular, holders of Class A ordinary shares and ADSs should notethat the Hong Kong share registrar will charge between HK$2.50 to HK$20, depending on thespeed of service (or such higher fee as may from time to time be permitted under the HongKong Listing Rules), for each transfer of ordinary shares from one registered owner to another,each share certificate canceled or issued by it and any applicable fee as stated in the sharetransfer forms used in Hong Kong. In addition, holders of ordinary shares and ADSs must payup to US$5.00 (or less) per 100 ADSs for each issuance of ADSs and each cancelation of ADSs,as the case may be, in connection with the deposit of Class A ordinary shares into, orwithdrawal of Class A ordinary shares from, our ADS program.

SUMMARY OF EXEMPTIONS AS A FOREIGN PRIVATE ISSUER IN THE U.S.

As required by Rule 19C.14 of the Hong Kong Listing Rules, set out below is a summary ofthe exemptions from obligations under U.S. securities laws and Nasdaq rules that we enjoy asa foreign private issuer in the U.S.

Exemptions from Nasdaq Rules

Foreign private issuers are permitted to follow home country practice, i.e. for us, the practiceof the Cayman Islands, in lieu of certain corporate governance requirements under Nasdaqlisting standards, as long as they disclose any significant ways in which their corporategovernance practices differ from those required under Nasdaq listing standards and explain thebasis for the conclusion that the exemption is applicable. Specifically, we are currently entitledto rely upon the exemptions from requirements to (i) hold annual shareholders meetings (ii)have a majority of independent directors, and (iii) have an audit committee comprising of atleast three members. Furthermore, because SINA owns more than 50% of the total votingpower of our ordinary shares, we are a “controlled company” under the Nasdaq Rules. We arecurrently entitled to rely on certain exemptions that are available to controlled companies fromNasdaq corporate governance requirements, including the requirements (i) that our directornominees must be selected or recommended solely by independent directors, and (ii) that we


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have a corporate governance and nominating committee that is composed entirely ofindependent directors with a written charter addressing the committee’s purpose andresponsibilities. Other than described above, there are no significant differences between ourcorporate governance practices and those followed by U.S. domestic companies under NasdaqRules.

EXEMPTIONS FROM SEC RULES AND REGULATIONS UNDER U.S. FEDERALSECURITIES LAWS

Foreign private issuers are exempted from Regulation FD under the U.S. Exchange Act.Regulation FD provides that when a domestic U.S. issuer, or someone acting on its behalf,discloses material non-public information to certain persons (including securities analysts,other securities market professionals, and holders of the issuer’s securities who couldreasonably be expected to trade on the basis of the information), it must make simultaneouspublic disclosure of that information (in the case of intentional disclosure) or prompt publicdisclosure (in the case of non-intentional disclosure). However, the SEC expects foreignprivate issuers to conduct themselves in accordance with the basic principles underlyingRegulation FD.

Section 16 of the U.S. Exchange Act does not apply to foreign private issuers. Therefore,directors, executive officers and 10% beneficial owners of foreign private issuers are notrequired to file Forms 3, 4 and 5 with the SEC, and are not required to disgorge to the issuerany profits realized from any non-exempt purchase and sale, or non-exempt sale and purchase,of the issuer’s equity securities or security-based swap agreements within a period of less thansix months.

Foreign private issuers are exempt from the SEC’s rules prescribing the furnishing and contentof proxy statements under the U.S. Exchange Act, which specify the procedures and requireddocumentation for soliciting shareholder votes. Accordingly, foreign private issuers are notrequired to disclose certain information in their annual proxy statements, such as whether thework of any compensation consultant has played any role in determining or recommending theform or amount of executive and director compensation has raised a conflict of interest, and,if so, the nature of the conflict and how it is being addressed.

Foreign private issuers are also not required under the U.S. Exchange Act to file periodicreports and financial statements with the SEC as frequently or as promptly as domestic U.S.issuers with securities registered under the U.S. Exchange Act. As a result, our shareholdersmay be afforded less protection than they would under the U.S. Exchange Act rules applicableto domestic U.S. issuers. Unlike domestic U.S. issuers, foreign private issuers are not requiredto file quarterly reports (including quarterly financial information) on Form 10-Q. They alsoare not required to use Form 8-K for current reports, and instead furnish (not file) currentreports on Form 6-K with the SEC.

Annual reports on Form 10-K by domestic U.S. issuers are due within 60, 75, or 90 days afterthe end of the issuer’s fiscal year, depending on whether the company is a “large acceleratedfiler,” a “accelerated filer,” or a “non-accelerated filer.” By contrast, the deadline for foreignprivate issuers to file annual reports on Form 20-F is four months after the end of their fiscalyear.


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OUR ARTICLES OF ASSOCIATION

We are an exempted company incorporated in the Cayman Islands with limited liability and ouraffairs are governed by our Memorandum and Articles of Association, the Cayman CompaniesAct and the common law of the Cayman Islands.

The laws of Hong Kong differ in certain respects from the Cayman Companies Act, and ourArticles of Association are specific to us and include certain provisions that may be differentfrom common practices in Hong Kong. For example:

(a) Rule 19C.07 of the Hong Kong Listing Rules provides that the Hong Kong StockExchange will consider that an issuer such as our Company seeking a listing underChapter 19C has met the requirements of Rule 19.30(1)(b) of the Hong Kong ListingRules for standards of shareholder protection if it has met the shareholder protectionstandards by reference to eight criteria set out in Rule 19C.07.

(b) Rule 19C.07(3) of the Hong Kong Listing Rules requires the appointment, removal andremuneration of auditors to be approved by a majority of a Qualifying Issuer’s (as definedin the Hong Kong Listing Rules) members or other body that is independent of theissuer’s board of directors, but our Articles of Association do not contain this or a similarprovision.

(c) Pursuant to Rule 19C.07(6) of the Hong Kong Listing Rules, a member must abstain fromvoting to approve a matter in circumstances required by the Hong Kong Listing Rules. Weundertake to put forth a resolution at the next general meeting of our Company to reviseour Articles of Association so that a member’s right to vote is subject to the Hong KongListing Rules.

(d) Rule 19C.07(7) of the Hong Kong Listing Rules requires that members holding a minorityshareholding in an issuer’s total number of issued shares must be able to requisition anextraordinary general meeting and add resolutions to a meeting agenda. The minimumstake required to do so must not be higher than 10% of the voting rights, on a one voteper share basis, in the share capital of the of the issuer, while the minimum stake set outin our Articles of Association is not less than one-third of the votes attaching to all issuedand outstanding Shares. We undertake to put forth resolutions at the next general meetingof our Company to revise our Articles of Association, so that (i) the minimum stakerequired to convene an extraordinary general meeting and add resolutions to a meetingagenda will be one-tenth of the voting rights, on a one vote per share basis, in the sharecapital of our Company; and (ii) the quorum for a general meeting of our Company willbe lowered from the current one or more shareholders holding at least one-third of theaggregate voting power of our Company to one or more shareholders holding at leastone-tenth of the aggregate voting power of our Company. We have obtained anirrevocable undertaking from our controlling shareholder prior to the Listing to be presentand vote in favor of the proposed resolutions outlined above with a view to ensuring thatthere may be adequate quorum and votes in favor of such resolutions.

See “Waivers and Exemptions” in this document and “Summary of our Constitution andCayman Company Law” as set out in Appendix III to this document for further details.


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As we are seeking a listing as a Grandfathered Greater China Issuer pursuant to Chapter 19C(Secondary Listings of Qualifying Issuers) of the Hong Kong Listing Rules with a WVRstructure, certain shareholder protection measures and governance safeguards under Chapter8A (Weighted Voting Rights) of the Hong Kong Listing Rules do not apply to us pursuant toRule 19C.12 of the Hong Kong Listing Rules and our Articles differ from Chapter 8A in anumber of ways. Material differences in shareholder protection and corporate governancesafeguards are set out below:

Requirements under Chapter 8A ofthe Hong Kong Listing Rules Our weighted voting rights structure

Rule 8A.13 of the Hong Kong Listing Rulesprohibits the increase in the proportion ofshares with WVRs after the Listing.

Our Articles do not contain such restrictionson the Class B ordinary shares.

Rule 8A.15 of the Hong Kong Listing Rulesrequires that, where there is a reduction in thenumber of issued shares, the weighted votingrights must be reduced proportionately.

Rule 8A.17 of the Hong Kong Listing Rulesrequire cessation of weighted voting rights if(i) the beneficiary is deceased; (ii) no longer amember of the issuer’s board of directors; (iii)deemed by the Hong Kong Stock Exchange tobe incapacitated for the purpose of performinghis or her duties as a director; or (iv) deemedby the Hong Kong Stock Exchange to nolonger meet the requirements of a director setout in the Hong Kong Listing Rules.

Subject to the provisions of our Articles ofAssociation, each Class B ordinary share isconvertible into one Class A ordinary share atany time by the shareholder. If at any timeSINA Corporation and its affiliates inaggregate hold less than 5% of the totalnumber of issued and outstanding Class Bordinary shares, each issued and outstandingClass B ordinary shares will be automaticallyand immediately converted into one Class Aordinary shares, and no Class B ordinaryshares could be issued by us thereafter. TheClass B ordinary shares will be automaticallyand immediately converted into an equalnumber of Class A ordinary share upon anysale, transfer, assignment or disposition of theClass B ordinary shares by the holder of ClassB ordinary shares to any person or entitywhich is not an affiliate of such holder.

Rule 8A.18(1) of the Hong Kong ListingRules requires weighted voting rightsattached to a beneficiary’s shares to ceaseupon transfer to another person of thebeneficial ownership of, or economic interestin, those shares or the control over the votingrights attached to them (through votingproxies or otherwise).


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Rule 8A.18(2) of the Hong Kong ListingRules states that a limited partnership, trust,private company or other vehicle may holdshares carrying weighted voting rights onbehalf of a beneficiary of weighted votingrights, provided that such an arrangementdoes not result in a circumvention of Rule8A.18(1) of the Hong Kong Listing Rules.

Furthermore, we will make certain changes tothe Articles at the upcoming general meetingto the effect that, if the Class B ordinaryshares are no longer under the control of theexisting WVR beneficiaries or their affiliates,all of the relevant Class B ordinary sharesheld by it shall be automatically convertedinto Class A ordinary shares. For furtherdetails, see the section headed “Waivers andExemptions – Shareholder ProtectionRequirements – Other Proposed Amendmentsto the Articles”.

Under Rule 8A.23 of the Hong Kong ListingRules, non-WVR shareholders must be able toconvene an extraordinary general meeting andadd resolutions to the meeting agenda. Theminimum stake required to do so must not behigher than 10% of the voting rights on a onevote per share basis in the share capital of thelisted issuer.

The minimum stake as currently set out in ourArticles of Association is different from therequirement. For further details, see sectionheaded “Waivers and Exemptions –Shareholder Protection Requirements –Requisition of Extraordinary General Meetingby Shareholders”.

Rule 8A.24 of the Hong Kong Listing Rulesrequires weighted voting rights to bedisregarded on any resolution to approvecertain matters, including (i) changes to thelisted issuer’s constitutional documents,however framed; (ii) variation of rightsattached to any class of shares; (iii) theappointment or removal of an independentnon-executive director; (iv) the appointmentor removal of auditors; and (v) the voluntarywinding-up of the listed issuer.

Under our weighted voting rights structure,each Class B ordinary share entitles the holderto exercise three votes on all matters subjectto the vote at general meetings of ourCompany.

Rule 8A.30 of the Hong Kong Listing Rulesrequires issuer with a WVR structure mustestablish a Corporate Governance Committeewith at least the terms of reference set out inCode Provision D.3.1 of Appendix 14 to theHong Kong Listing Rules and additionalterms as set out under Rule 8A.30 of the HongKong Listing Rules.

We do not have a corporate governancecommittee. Therefore, there is not a charterthat contains the terms otherwise requiredunder Rule 8A.30 and Code Provision D.3.1of Appendix 14 to the Hong Kong ListingRules.


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In particular, Rule 8A.30 requires thefollowing terms to be applicable to theCorporate Governance Committee:

(1) to review and monitor whether the listedissuer is operated and managed for thebenefit of all its shareholders;

(2) to confirm, on an annual basis, that thebeneficiaries of weighted voting rightshave been members of the listed issuer’sboard of directors throughout the yearand that no matters under rule 8A.17have occurred during the relevantfinancial year;

(3) to confirm, on an annual basis, whetheror not the beneficiaries of weightedvoting rights have complied with rules8A.14, 8A.15, 8A.18 and 8A.24throughout the year;

(4) to review and monitor the managementof conflicts of interests and make arecommendation to the board on anymatter where there is a potential conflictof interest between the issuer, asubsidiary of the issuer and/orshareholders of the issuer (considered asa group) on one hand and anybeneficiary of weighted voting rights onthe other;

(5) to review and monitor all risks related tothe issuer’s WVR structure, includingconnected transactions between theissuer and/or a subsidiary of the issueron one hand and any beneficiary ofweighted voting rights on the other andmake a recommendation to the board onany such transaction;

(6) to make a recommendation to the boardas to the appointment or removal of theCompliance Adviser;

(7) to seek to ensure effective and on-goingcommunication between the issuer andits shareholders, particularly withregards to the requirements of rule8A.35;

With respect to Rule 8A.30 of the Hong KongListing Rules, the following requirements(also as set out on the left) which areotherwise applicable to a listed issuer’scorporate governance committee will notapply: to (1) review and monitor whether thelisted issuer is operated and managed for thebenefit of all its shareholders; (2) confirm, onan annual basis, that the beneficiaries of WVRhave been members of the listed issuer’sboard of directors throughout the year andthat no matters under rule 8A.17 (relating tocessation of WVR) have occurred during therelevant financial year; (3) confirm, on anannual basis, whether or not the beneficiariesof WVR have complied with rules 8A.14(relating to issue of shares carrying weightedvoting rights), 8A. 15 (relating to purchase ofown shares), 8A.18 (relating to restriction ontransfer of shares with weighted voting rights)and 8A.24 (relating to matters requiringvoting on a one vote per share basis)throughout the year; (4) review and monitorthe management of conflicts of interests andmake a recommendation to the board on anymatter where there is a potential conflict ofinterest between the issuer, a subsidiary of theissuer and/or shareholders of the issuer(considered as a group) on one hand and anybeneficiary of WVR on the other; (5) reviewand monitor all risks related to the issuer’sWVR structure; (6) make a recommendationto the board as to the appointment or removalof the Compliance Adviser; (7) seek to ensureeffective and on-going communicationbetween the issuer and its shareholders; (8)report on the work of the committee on atleast a half-yearly and annual basis coveringall areas of its terms of reference; and (9) todisclose, on a comply or explain basis, itsrecommendations to the board in respect ofthe matters in (4) to (6) above.


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(8) to report on the work of the CorporateGovernance Committee on at least ahalf-yearly and annual basis covering allareas of its terms of reference; and

(9) to disclose, on a comply or explain basis,its recommendations to the board inrespect of the matters in sub-paragraphs(4) to (6) above in the report referred toin sub-paragraph (8) above.

Furthermore, Code Provision D.3.1 ofAppendix 14 to the Hong Kong Listing Rulesrequires the following terms to be applicableto the Corporate Governance Committee:

(1) to develop and review an issuer’spolicies and practices on corporategovernance and make recommendationsto the board;

(2) to review and monitor the training andcontinuous professional development ofdirectors and senior management;

(3) to review and monitor the issuer’spolicies and practices on compliancewith legal and regulatory requirements;

(4) to develop, review and monitor the codeof conduct and compliance manual (ifany) applicable to employees anddirectors; and

(5) to review the issuer’s compliance withthe code and disclosure in the CorporateGovernance Report.

With respect to Code Provision D.3.1 ofAppendix 14 to the Hong Kong Listing Rules,the following requirements (also as set out onthe left) which are otherwise applicable to alisted issuer’s corporate governancecommittee will not apply: to (1) develop andreview an issuer’s policies and practices oncorporate governance and makerecommendations to the board; (2) review andmonitor the training and continuousprofessional development of directors andsenior management; (3) review and monitorthe issuer’s policies and practices oncompliance with legal and regulatoryrequirements; (4) develop, review andmonitor the code of conduct and compliancemanual (if any) applicable to employees anddirectors; and (5) review the issuer’scompliance with the corporate governancecode and disclosure in the corporategovernance report.

Rule 8A.29 of the Hong Kong Listing Rulesrequires that the independent non-executivedirectors of a listed issuer with a WVRstructure must be subject to retirement byrotation at least once every three years.

Our Articles provide that our directors are notsubject to a term of office and hold officeuntil such time as they are removed fromoffice by an ordinary resolution of theshareholders.

As a result, our Articles provide less shareholder protection and have fewer governancesafeguards than if our Company were subject to Chapter 8A in its entirety.


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COMPLIANCE ADVISOR

We have appointed Somerley Capital Limited as our compliance advisor, or the ComplianceAdvisor, upon the Listing in compliance with Rule 3A.19 of the Hong Kong Listing Rules.Pursuant to Rule 3A.23 of the Hong Kong Listing Rules, the Compliance Advisor will provideadvice to us upon our request in the following circumstances:

(a) before the publication of any regulatory announcement, circular, or financial report;

(b) where the business activities, development or results of our Company deviate from anyforecast, estimate or other information in this document; and

(c) where the Hong Kong Stock Exchange makes an inquiry to the Company regardingunusual movements in the price or trading volume of our Class A ordinary shares or anyother matters in accordance with Rule 13.10 of the Hong Kong Listing Rules.

The term of the appointment shall commence on the Listing Date and end on the date on whichwe distribute our annual report in respect of our financial results for the first full fiscal yearcommencing after the Listing Date.


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In preparation for the Listing, we have sought the following waivers and exemptions from strictcompliance with the relevant provisions of the Hong Kong Listing Rules, the SFO and theCompanies (Winding Up and Miscellaneous Provisions) Ordinance and have applied for aruling under the Takeovers Code:

Rules Subject matter

Rule 2.07A of the Hong Kong Listing Rules Printed Corporate Communications

Rules 4.04(2) and 4.04(4)(a) of the HongKong Listing Rules

Acquisition after the Track Record Period

Rules 4.04(3)(a), 4.05(2) and 4.13 of theHong Kong Listing Rules and Paragraph31(3)(b) of the Third Schedule to theCompanies (Winding Up andMiscellaneous Provisions) Ordinance

Disclosure Requirements Relating to theAccountant’s Report

Rule 9.09(b) of the Hong Kong ListingRules

Dealings in Shares prior to Listing

Rule 13.25B of the Hong Kong ListingRules

Monthly Return

Rules 19C.07(3), 19C.07(4) and 19C.07(7)of the Hong Kong Listing Rules

Shareholder Protection Requirements

Paragraphs 13 and 26 of Appendix 1A to theHong Kong Listing Rules and Paragraphs11, 14 and 25 of the Third Schedule tothe Companies (Winding Up andMiscellaneous Provisions) Ordinance

Particulars of any Commissions, Discountsand Brokerages, Alterations of Capital andAuthorized Debentures

Paragraph 29(1) of Appendix 1A to theHong Kong Listing Rules and Paragraph29 of the Third Schedule to theCompanies (Winding Up andMiscellaneous Provisions) Ordinance

Disclosure of Information on SubsidiariesWhose Profits or Assets Make MaterialContributions to Us

Paragraph 27 of Appendix 1A to the HongKong Listing Rules and Paragraph 10 ofthe Third Schedule to the Companies(Winding Up and MiscellaneousProvisions) Ordinance

Disclosure Requirements of Options

Paragraphs 33(2), 33(3), 46(2), 46(3) ofAppendix 1A to the Hong Kong ListingRules

Disclosure Requirements of theRemuneration of Directors and FiveIndividuals Whose Emoluments WereHighest


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Rules Subject matter

Paragraphs 41(4) and 45 of Appendix 1A toand Practice Note 5 of the Hong KongListing Rules

Disclosure of Interests Information

Paragraph 15(2)(c) of Appendix 1A to theHong Kong Listing Rules

Disclosure of Offer Price

Rule 10.04 of and Paragraph 5(2) ofAppendix 6 to the Hong Kong ListingRules

Subscription for Shares by ExistingShareholders

Paragraph 3(b) of Practice note 15 to theHong Kong Listing Rules

Three-year Restriction on Spin-offs

Section 4.1 of the Introduction to theTakeovers Codes

Not a public company in Hong Kong underTakeovers Code

Part XV of the SFO Disclosure of interests under Part XV of theSFO

PRINTED CORPORATE COMMUNICATIONS

Rule 2.07A of the Hong Kong Listing Rules provides that a listed issuer may send or otherwisemake available to the relevant holders of its securities any corporate communication byelectronic means, provided that either the listed issuer has previously received from each of therelevant holders of its securities an express, positive confirmation in writing or theshareholders of the listed issuer have resolved in a general meeting that the listed issuer maysend or supply corporate communications to shareholders by making them available on thelisted issuer’s own website or the listed issuer’s constitutional documents contain provision tothat effect, and certain conditions are satisfied.

Our ADSs have been listed on the Nasdaq since April 2014. We have a diverse shareholder basewith ADS holders globally.

We do not currently produce or send out any corporate communications to our shareholders orholders of ADSs in printed form unless requested or in limited circumstances. We publicly fileor furnish various corporate communications with the SEC which are posted on the SEC’swebsite. Our annual reports on Form 20-F and current reports on Form 6-K and all amendmentsto these reports are also available free of charge on our website as soon as reasonablypracticable after they are filed with or furnished to the SEC. Further, we will post our proxymaterials and notices to our shareholders and holders of ADSs on a publicly accessible website.Those documents will also be available on our website.


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Apart from the Hong Kong Offer Shares that we will offer for subscription by the public inHong Kong, the International Offer Shares will be placed to professional, institutional,corporate and other investors in Hong Kong and elsewhere in the world. Given our diverseshareholder base and the potential number of countries in which our shareholders are located,we consider that it would not be practicable for us to send printed copies of all our corporatecommunications to all of our shareholders. Further, we consider that it would also not bepracticable for us to approach our existing shareholders individually to seek confirmation fromthem of their wish to receive corporate communications in electronic form, or to provide themwith the right to request corporate communications in printed form instead.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with Rule 2.07A of the Hong Kong Listing Rules on the conditions that we will:

(a) issue all future corporate communications as required by the Hong Kong Listing Rules onour own website in English and Chinese, and on the Hong Kong Stock Exchange’swebsite in English and Chinese;

(b) provide printed copies of proxy materials in English to our shareholders at no costs uponrequest; and

(c) ensure that the “Investor Relations” page of our website (http://ir.weibo.com/) will directinvestors to all of our future filings with the Hong Kong Stock Exchange.

ACQUISITION AFTER THE TRACK RECORD PERIOD

Pursuant to Rules 4.04(2) and 4.04(4)(a) of the Hong Kong Listing Rules, the accountant’sreport to be included in a listing document must include the income statements and balancesheets of any subsidiary or business acquired, agreed to be acquired or proposed to be acquiredsince the date to which its latest audited accounts have been made up in respect of each of thethree financial years immediately preceding the issue of the listing document.

Acquisition since June 30, 2021

Since the end of Track Record Period, we have completed an acquisition up to the LatestPracticable Date (the “Acquisition”). Details of the Acquisition up to the Latest PracticableDate include:

Target Consideration(1) Percentage of interest acquired

Principalbusinessactivities

(approximatelyRMB million)

Business A(2) �� 200 100% E-sports team

Notes:

(1) The approximate consideration disclosed in the table represents the consideration for the Acquisition after theTrack Record Period.

(2) None of the core connected persons at the level of our Company has a controlling interest in the target.


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The consideration for the Acquisition was arrived at after commercial arm’s lengthnegotiations, based on factors including market dynamics, a mutually agreed valuation, andcapital required for the target company’s operations.

Our directors believe that the Acquisition will complement our Group’s businesses and aretherefore expected to create synergies. Accordingly, our directors believe that the Acquisition,if consummated, will be fair and reasonable and in the interests of the Shareholders as a whole.The consideration for the Acquisition, if consummated, will be satisfied by our Group’s ownsource of funds. For the avoidance of doubt, the proceeds of the Global Offering will not beused to fund the Acquisition.

Conditions for granting the waiver and its scope in respect of the Acquisition

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with Rules 4.04(2) and 4.04(4)(a) of the Hong Kong Listing Rules in respect of theAcquisition on the following grounds:

The percentage ratios of the Acquisition are all less than 5% by reference to the most recentfiscal year of our Track Record Period

The relevant percentage ratios calculated in accordance with Rule 14.07 of the Hong KongListing Rules for the Acquisition are all less than 5% by reference to the most recent fiscal yearof the Track Record Period.

Accordingly, we believe that the Acquisition has not resulted in, or is not expected to result in,any significant changes to our financial position since June 30, 2021, and all information thatis reasonably necessary for the potential investors to make an informed assessment of ouractivities or financial position has been included in this document. As such, we consider thata waiver from compliance with Rules 4.04(2) and 4.04(4)(a) of the Hong Kong Listing Ruleswould not prejudice the interests of the investors.

The historical financial information of the target is not readily available

The Company confirms that the target of the Acquisition does not have available historicalfinancial information which is readily available. In particular, the target of the Acquisition isan E-sports team and it did not have any historical cash flow or profit and loss statementsavailable for inclusion in this document.

In addition, having considered the Acquisition to be immaterial and that we do not expect theAcquisition to have any material effect on our business, financial condition or operations, webelieve that it would not be meaningful and would be unduly burdensome for us to prepare andinclude the financial information of the target during the Track Record Period in this document.As we do not expect the Acquisition to result in any material changes to our financial positionafter the Track Record Period, we do not believe the non-disclosure of the required informationpursuant to Rules 4.04(2) and 4.04(4)(a) of the Hong Kong Listing Rules would prejudice theinterests of the investors.


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Alternative disclosure of the Acquisition in this document

We have provided alternative information about the Acquisition in this document. Suchinformation includes those which would be required for a discloseable transaction underChapter 14 of the Hong Kong Listing Rules that our directors consider to be material,including, for example, descriptions of the target’s principal business activities, the investmentamounts, and a statement as to whether the core connected persons at the level of our Companyis a controlling shareholder of the target. We have however excluded disclosure on the nameof the target in connection with the Acquisition as the Company has entered into confidentialityagreement with the acquisition target and there is no consent for such disclosure. Since therelevant percentage ratio of the Acquisition is less than 5% by reference to the most recentfiscal year of the Track Record Period, we believe the current disclosure is adequate forpotential investors to form an informed assessment of us. We do not expect to use any proceedsfrom the Listing to fund the Acquisition.

DISCLOSURE REQUIREMENTS RELATING TO THE ACCOUNTANT’S REPORT

Rules 4.04(3)(a), 4.05(2) and 4.13 of the Hong Kong Listing Rules and Paragraph 31(3)(b) ofthe Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinanceset out certain historical financial information to be included in a listing document that is notrequired to be disclosed under U.S. GAAP, including in particular:

(i) balance sheet at a company level;

(ii) aging analysis of accounts receivables;

(iii) aging analysis of accounts payables; and

(iv) adjustments made to show profits of all periods in accordance with the relevantaccounting standards in relation to the last fiscal year reported on.

In accordance with U.S. GAAP, we have applied the modified retrospective method to accountfor the impact of the adoption of certain new accounting standards in the Track Record Period.Under the modified retrospective method adopted by our Group, comparative periods in thelatest consolidated financial statements are not retrospectively adjusted.

During the Track Record Period, we have adopted, among other new accounting standards thatdid not have a material impact on the Group’s consolidated financial statements, AccountingStandards Update 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurementof Credit Losses on Financial Instruments”, or ASC Topic 326, and Accounting StandardsUpdate 2016-02 “Leases (Topic 842)”, including certain transitional guidance and subsequentamendments, or ASC 842. The relevant accounting policies upon the adoption of these newaccounting standards are disclosed in the “Accountant’s Report” in Appendix IA.

ASC Topic 326 was adopted on January 1, 2020 which amends previously issued guidanceregarding the impairment of financial instruments by creating an impairment model that isbased on expected losses. ASC Topic 326 does not permit a full retrospective approach andcomparative prior periods should not be adjusted. The adoption had no material impact to thebeginning retained earnings on January 1, 2020.


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ASC 842 was adopted on January 1, 2019 using the modified retrospective method by applyingthe new lease standard to all leases existing as of January 1, 2019, the date of initialapplication, and no adjustments were made to the comparative periods. Adoption of the newlease standard resulted in the recognition of US$14.4 million of operating lease asset andUS$14.9 million of operating leasing liability on the consolidated balance sheet as of January1, 2019, and no impact to the beginning retained earnings on January 1, 2019.

The following alternative disclosures with respect to certain items identified above which arerelevant to us have been included in this document: (a) for certain new accounting standardsthat came into effect in the latest fiscal year, the accounting policies as well as the impact ofadoption, if any, to the beginning accumulated deficit of initial application (i.e., January 1,2019 and 2020) has been disclosed in the “Accountant’s Report” in Appendix IA in accordancewith the relevant requirements under U.S. GAAP; and (b) disclosure of the relevant accountingpolicies adopted for the Track Record Period in the “Accountant’s Report” in Appendix IA.

As this document has included the above alternative disclosures and the current disclosure inthis document contains all information which is necessary for the investors to make aninformed assessment of the business, asset and liability, financial position, trading position,management and prospect of our Group, we believe that it would be of no material value to theHong Kong investors and be unduly burdensome for the Accountant’s Report in Appendix IAto this document to include certain required information pursuant to Rules 4.04(3)(a), 4.05(2)and 4.13 of the Hong Kong Listing Rules and Paragraph 31(3)(b) of the Third Schedule to theCompanies (Winding Up and Miscellaneous Provisions) Ordinance and that the non-disclosureof such information will not prejudice the interests of investors.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from the HongKong Stock Exchange to us from strict compliance with the requirements under Rules4.04(3)(a), 4.05(2) and 4.13 of the Hong Kong Listing Rules. We have applied for, and the SFChas granted, an exemption to us from strict compliance with the requirements under Paragraph31(3)(b) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)Ordinance, to the extent not strictly met by the current disclosure in this document. The SFCexemption referred to above shall be granted on the conditions that: (i) the particulars of suchexemption are set out in this document; and (ii) this document will be issued on or beforeNovember 29, 2021.

DEALINGS IN SHARES PRIOR TO LISTING

According to Rule 9.09(b) of the Hong Kong Listing Rules, there must be no dealing in thesecurities of a new applicant for which listing is sought by any core connected person of theissuer from four clear business days before the expected hearing date until listing is granted(the “Relevant Period”).

We had approximately 70 subsidiaries (including the Company’s consolidated affiliatedentities) as of June 30, 2021, and our ADSs are widely held, publicly traded and listed on theNasdaq. We consider that we are therefore not in a position to control the investment decisionsof our shareholders or the investing public in the US.

Solely based on public filings with the SEC as of the Latest Practicable Date, other than SINACorporation and Ali WB Investment Holding Limited (“Ali WB”), a wholly-owned subsidiaryof Alibaba Group, we had no shareholders who was not a director and held 10% or more of ourissued share capital.


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For a company whose securities are listed and traded in the U.S., we note that it is a commonpractice for substantial shareholders and corporate insiders, including directors, executives andother members of management, to set up trading plans that meet the requirements of Rule10b5-1 under the U.S. Exchange Act (the “Rule 10b5-1 Plan(s)”) to buy or sell the company’ssecurities. A Rule 10b5-1 Plan is a written plan, set up with a broker, to trade securities that(a) is entered into at a time when the person trading the securities is not aware of any materialnon-public information; (b) specifies the amount of securities to be purchased or sold and theprice at which and the date on which the securities were to be purchased or sold; and (c) doesnot allow the person trading the securities to exercise any subsequent influence over how,when, or whether to effect purchases or sales. Persons who trade securities pursuant to a Rule10b5-1 Plan have an affirmative defense against insider trading allegations under U.S.securities law.

On the basis of the above, we consider that the following categories of persons (collectively,the “Permitted Persons”) should not be subject to the dealing restrictions set out in Rule9.09(b) of the Hong Kong Listing Rules:

(a) Mr. Charles Chao, our chairman of the board of directors since our inception and whocontrols our Company through SINA, in respect of (i) his use of the Shares as security(including, for the avoidance of doubt, using Shares as security in connection withentering into financing transactions during the Relevant Period as well as satisfying anyrequirements to top-up security under the terms of financing transactions entered intoprior to the Relevant Period), provided that there will be no change in the beneficialownership of the Shares at the time of entering into any such transactions during theRelevant Period and (ii) his dealings pursuant to Rule 10b5-1 Plans that have been set upprior to the Relevant Period (“Category 1”);

(b) the directors and chief executives of our Company other than Mr. Charles Chao, and thedirectors and chief executives of our Major Subsidiaries, in respect of (i) their respectiveuse of the Shares as security (including, for the avoidance of doubt, using Shares assecurity in connection with entering into financing transactions during the RelevantPeriod as well as satisfying any requirements to top-up security under the terms offinancing transactions entered into prior to the Relevant Period), provided that there willbe no change in the beneficial ownership of the Shares at the time of entering into anysuch transactions during the Relevant Period and (ii) the respective dealings pursuant toRule 10b5-1 Plans that have been set up prior to the Relevant Period (“Category 2”);

(c) directors, chief executives and substantial shareholders of our non-Major Subsidiaries andtheir close associates (“Category 3”); and

(d) any other person (whether or not an existing Shareholder) who may, as a result ofdealings, become our substantial shareholder (as defined in the Hong Kong Listing Rules)and who is not its director or chief executive, or a director or chief executive of oursubsidiaries, or their close associates (“Category 4”).

For the avoidance of doubt:

(a) as the foreclosure, enforcement or exercise of other rights by the lenders in respect of asecurity interest over the Shares (including, for the avoidance of doubt, any securityinterest created pursuant to any top-up of security) will be subject to the terms of thefinancing transaction underlying such security and not within the control of the pledgor,


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any change in the beneficial owner of the Shares during the Relevant Period resultingfrom the foreclosure, enforcement or exercise of other rights by the lenders in respect ofsuch security interest will not be subject to Rule 9.09(b) of the Hong Kong Listing Rules;and

(b) persons in Category 1 and Category 2 who use their respective Shares other than asdescribed in this section headed “— Dealings in the Shares prior to Listing” are subjectto the restrictions under Rule 9.09(b) of the Hong Kong Listing Rules.

We believe, subject to the conditions set forth below, the dealings in our securities by our coreconnected persons will not prejudice the interests of the potential investors of our Companyand align with the principles in the Hong Kong Stock Exchange’s Guidance Letter GL42-12.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with Rule 9.09(b) of the Hong Kong Listing Rules subject to the followingconditions:

(a) Categories 1 and 2 of the Permitted Persons who entered into Rule 10b5-1 Plans have nodiscretion over dealings in our ADSs after the plans have been entered into; whereCategories 1 and 2 of the Permitted Persons use the Shares as security, there will be nochange in the beneficial ownership of the Shares at the time of entering into the relevanttransactions during the Relevant Period;

(b) Categories 3 and 4 of the Permitted Persons do not have any influence over the GlobalOffering and do not possess any of our non-public inside information given that suchpersons are not in a position with access to information that is considered material to ustaken as a whole. Given the large number of our subsidiaries (including our consolidatedaffiliated entities) and our vast ADS holder base, we and our management do not haveeffective control over the investment decisions of Categories 3 and 4 of the PermittedPersons in our ADSs;

(c) we will promptly release any inside information to the public in the United States andHong Kong in accordance with the relevant laws and regulations of the U.S. (includingthe Nasdaq rules) and Hong Kong. Accordingly, the Permitted Persons (other thanCategory 1 and Category 2 persons) are not in possession of any non-public insideinformation of which we are aware;

(d) we will notify the Hong Kong Stock Exchange of any breaches of the dealing restrictionsby any of our core connected persons during the Relevant Period when we become awareof the same other than dealings by the core connected persons who are Permitted Personswithin the permitted scopes set out above; and

(e) prior to the Listing Date, other than within the permitted scopes set out above, ourdirectors and chief executive and the directors and chief executives of our MajorSubsidiaries and their close associates will not deal in the Shares or the ADSs during theRelevant Period provided that such prohibited dealing in the Shares shall not include thegranting, vesting, payment or exercise (as applicable) of RSUs, incentive and non-statutory options, restricted shares, dividend equivalents, and share payments under ourGroup’s share incentive plans.


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MONTHLY RETURN

Rule 13.25B of the Hong Kong Listing Rules requires a listed issuer to publish a monthlyreturn in relation to movements in our equity securities, debt securities and any othersecuritized instruments, as applicable, during the period to which the monthly return relates.

Under the Joint Policy Statement, this common waiver is subject to the condition that the issuercan meet one of the following three conditions:

(a) it has received a relevant partial exemption from Part XV of the SFO; or

(b) it publishes a “next day disclosure return” in strict compliance with Rule 13.25A of theHong Kong Listing Rules, regardless of the waiver of general effect from this Rule forsecondary listed issuers; or

(c) it is subject to overseas laws or regulations that have a similar effect to Rule 13.25B ofthe Hong Kong Listing Rules and any differences are not material to shareholderprotection.

As we have obtained a partial exemption from strict compliance with Part XV of the SFO fromthe SFC, we have applied for, and the Hong Kong Stock Exchange has granted, a waiver fromstrict compliance with the continuing obligations under Rule 13.25B of the Hong Kong ListingRules. We will disclose information about share repurchases, if material, in our quarterlyearnings releases and annual reports on Form 20-F which are furnished or filed with the SECin accordance with the applicable U.S. rules and regulations.

SHAREHOLDER PROTECTION REQUIREMENTS

For an overseas issuer seeking a secondary listing on the Hong Kong Stock Exchange, Rule19.30(1)(b) of the Hong Kong Listing Rules requires the overseas issuer’s primary listing is oris to be on an exchange where the standards of shareholder protection are at least equivalentto those provided in Hong Kong. Rule 19C.06 of the Hong Kong Listing Rules provides thatAppendices 3 and 13 to the Hong Kong Listing Rules do not apply to an overseas issuer thatis a Non-Greater China Issuer (as defined in the Hong Kong Listing Rules) or a GrandfatheredGreater China Issuer seeking a secondary listing under Chapter 19C of the Hong Kong ListingRules. Rule 19C.07 of the Hong Kong Listing Rules provides that the Hong Kong StockExchange will consider that a Grandfathered Greater China Issuer seeking a secondary listinghas met the requirements of Rule 19.30(1)(b) of the Hong Kong Listing Rules if it has met theshareholder protection standards by reference to eight criteria set out in Rule 19C.07 of theHong Kong Listing Rules.

We are a Grandfathered Greater China Issuer under Chapter 19C of the Hong Kong ListingRules.

Approval, Removal and Remuneration of Auditors

Rule 19C.07(3) of the Hong Kong Listing Rules requires the appointment, removal andremuneration of auditors to be approved by a majority of the Qualifying Issuer’s (as definedin the Hong Kong Listing Rules) members or other body that is independent of the issuer’sboard of directors (the “Auditors Provision”).


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Our Articles do not contain an equivalent Auditors Provision. Pursuant to our Articles, ourboard has the power to appoint, remove and remunerate the auditors instead. Although theboard has such a power, it has formally delegated this function to our audit committee (the“Audit Committee”) since our listing on the Nasdaq in April 2014.

The Audit Committee is akin to an independent body of the board on the basis of theindependence requirements set out in applicable U.S. laws and the Nasdaq rules. The AuditCommittee comprises of three members, all of whom are independent directors as required bythe U.S. Exchange Act and applicable Nasdaq rules.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements of Rule 19C.07(3) of the Hong Kong Listing Rules.

Annual General Meeting

Rule 19C.07(4) of the Hong Kong Listing Rules requires a general meeting to be held each yearas the Qualifying Issuer’s annual general meeting. The Articles currently provide that theCompany shall in each year hold a general meeting as its annual general meeting. Accordingly,the Company has convened an annual general meeting for each year during the Track RecordPeriod.

We will amend the Articles at the upcoming general meeting to comply with Rule 19C.07(4)of the Hong Kong Listing Rules (the “AGM Provision”) to the effect that we must hold anannual general meeting each year.

Prior to the amendment to the Articles and the AGM Provision being adopted, the Companyundertakes to hold an annual general meeting within six months after the end of each financialyear with effect from Listing to be in compliance with Rule 13.46(2)(b) of the Hong KongListing Rules. As advised by the Company’s legal adviser as to the laws of Cayman Islands,the Company’s undertaking to convene an annual general meeting within the period of sixmonths after the end of each financial year with effect from the Listing pursuant to Rule13.46(2)(b) does not conflict with or result in a breach of any of the terms or provisions of theCompany’s existing Memorandum and Articles or any law, public rule or regulation applicableto the Company currently in force in the Cayman Islands.

Requisition of Extraordinary General Meeting by Shareholders

Rule 19C.07(7) of the Hong Kong Listing Rules requires that members holding a minorityshareholding in an issuer’s total number of issued shares to be able to requisition anextraordinary general meeting and add resolutions to a meeting agenda. The minimum stakerequired to do so must not be higher than 10% of the voting rights, on a one vote per sharebasis, in the share capital of the issuer, while the minimum stake as currently set out in theArticles is not less than one-third of the votes attaching to all issued and outstanding Shares.In addition, the Articles currently provide that quorum for a general meeting of the Companyshall be one or more members holding shares which represent, in aggregate, not less thanone-third of the total voting power of the outstanding shares of the Company that are entitledto vote at the meeting.


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We will amend the Articles at the upcoming general meeting to comply with Rule 19C.07(7)of the Hong Kong Listing Rules (the “Requisition Provision”) so that (i) the minimum stakerequired to convene an extraordinary general meeting and add resolutions to a meeting agendawill be one-tenth of the voting rights, on a one vote per share basis, in the share capital of theCompany; and (ii) the quorum for a general meeting of the Company will be lowered from thecurrent one-third of the aggregate voting power of the Company to 10% of the aggregate votingpower of the Company.

Prior to the amendment to our Articles, we undertake to convene general meetings at therequest of shareholders holding in aggregate not less than 10% of our voting rights, on a onevote per share basis.

Other Proposed Amendments to the Articles

In addition, we will make the following amendments (together with the AGM Provision and theRequisition Provision, the “Proposed Amendments”) to the Articles at the upcoming generalmeeting:

(i) to include a new definition for “Founder”, which shall mean Mr. Charles Chao;

(ii) to include a new definition for “Founder’s Affiliate”, which shall mean:

(a) a partnership of which the Founder is a partner and the terms of which shallexpressly specify that the voting rights attached to any and all of the shares held bysuch limited partnership shall be controlled by the Founder;

(b) a trust of which the Founder must in substance retain an element of control of thetrust; or

(c) a private company or other vehicle controlled by the Founder or by a trust referredto in paragraph (b) above;

(iii) to amend Article 5(c)(ii) of the Articles as follows:

(a) to change “Affiliate” to “Founder or a Founder’s Affiliate”, such that upon anytransfer of Class B ordinary shares by a holder thereof to any person or entity whichis not the Founder or a Founder’s Affiliate, such Class B ordinary shares transferredshall be automatically and immediately converted (by way of being re-designated)into Class A ordinary shares;

(b) to add a new condition for automatic conversion from Class B ordinary shares toClass A ordinary shares, such that upon a change of control of any direct or indirectholder of any Class B ordinary share, including, but not limited to, any person otherthan the Founder or a Founder’s Affiliate gaining “control” over any of the SINAParent Companies (e.g. by entering into an agreement with the Founder to jointlycontrol the SINA Parent Companies), and even if the Founder or a Founder’sAffiliate remains to have joint “control” of the SINA Parent Companies, all of theClass B ordinary shares held by it shall be automatically and immediately converted(by way of being re-designated) into Class A ordinary shares; and


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(c) to add the definition of “control” which shall mean having (i) the power to controlthe management or elect a majority of members to the board of directors orequivalent decision-making body of, or (ii) the power to exercise or control theexercise of 50% or more of the voting power (through power of attorney, votingproxies, shareholders’ agreements or otherwise) at the general meetings or otherequivalent decision-making body of, such corporation, partnership or other entity.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the relevant requirements of Rule 19C.07 of the Hong Kong Listing Rules asset out above, subject to the following conditions:

(i) our Company put forth resolutions at or before the First GM to revise the Articles toincorporate the Proposed Amendments, and in the event that the proposed resolutions arenot approved at the First GM, our Company will continue to put forth the proposedresolutions (to the extent not yet passed) at each of the annual general meetings after theFirst GM, until the proposed resolutions are passed;

(ii) each of the Founder and SINA Corporation has provided an irrevocable undertaking to ourCompany and the Stock Exchange prior to the date of this document that, for so long asthe Proposed Amendments have not been approved at the general meetings, SINA will notsell, dispose of or transfer any shares in the Company immediately after the Listing if,after such sale, disposal or transfer, its voting power in the Company will be less than60%, and that SINA will be present and vote in favor of the proposed resolutions outlinedabove in the First GM, including the meeting of the holders of Class B ordinary shares,with a view to ensuring that there may be adequate quorum and votes in favor of suchresolutions, and if the proposed resolutions are not approved at the First GM, continue tobe present and vote in favor of such proposed resolutions at each subsequent generalmeeting at which our Company puts forth such proposed resolutions until all proposedresolutions are approved;

(iii) the Founder will take all necessary steps to ensure that, before the Articles are formallyamended to incorporate the Proposed Amendments, the Class B ordinary shares held bySINA Corporation will not be controlled by persons other than the Founder himself or aFounder’s Affiliate, and that he will deliver an advanced notice to our Company prior toListing to the effect that the relevant Class B ordinary shares shall be converted into ClassA ordinary shares in the event that any of the Class B ordinary shares are to be transferredto any persons that are not Founder’s Affiliates or if the Class B ordinary shares cease tobe “controlled” (as defined above under the Proposed Amendments) by the Founder or aFounder’s Affiliate; and

(iv) our Company has obtained an undertaking from Alibaba prior to the date of this documentthat it will be present and vote in favor of the proposed resolutions outlined above at theFirst GM and the relevant class meeting (if applicable), and if the proposed resolutionsare not approved at the First GM and the relevant class meeting, be present and vote infavor of such proposed resolutions at each subsequent general meeting and class meetingat which our Company puts forth such proposed resolutions until all proposed resolutionsare approved.

Notwithstanding the above, the Company intends to hold the First GM on December 1, 2021to put forth the relevant resolutions for revising the Articles. In the case where the relevantamendments are approved and adopted at the First GM before the Listing, the above-mentionedwaiver as well as the voting undertakings will lapse automatically.


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PARTICULARS OF ANY COMMISSIONS, DISCOUNTS AND BROKERAGES,ALTERATIONS OF CAPITAL AND AUTHORIZED DEBENTURES

Paragraphs 13 and 26 of Part A of Appendix 1 to the Hong Kong Listing Rules and paragraphs11 and 14 of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)Ordinance require the listing document to include the particulars of any commissions,discounts, brokerages or other special terms granted within two years immediately precedingthe issue of the listing document in connection with the issue or sale of any capital of anymember of the group and the particulars of any alterations of capital within two yearsimmediately preceding the issue of the listing document.

Paragraph 25 of the Third Schedule to the Companies (Winding Up and MiscellaneousProvisions) Ordinance requires particulars of the authorized debentures of our Company andour subsidiaries to be disclosed in this document.

We have identified seven entities as our Major Subsidiaries. For further details, see the sectionheaded “History and Corporate Structure — Corporate Structure — Major Subsidiaries”. Wehad approximately 70 subsidiaries (including our consolidated affiliated entities) as of June 30,2021. We believe that it would be unduly burdensome for us to disclose this information inrespect of all of our subsidiaries (including our consolidated affiliated entities) as we wouldhave to incur additional costs and devote additional resources in compiling and verifying therelevant information for such disclosure, which would not be material or meaningful toinvestors.

The Major Subsidiaries include all of our subsidiaries (including our consolidated affiliatedentities) that meet the financial threshold for “significant subsidiaries” under Regulation S-Xin the U.S. (i.e., contributing more than 10% of (a) our Group’s total assets or (b) our Group’stotal net revenues and income or loss from continuing operations before income taxes (afterintercompany eliminations) attributable to the controlling interest to the absolute value of suchconsolidated income or loss) and are representative of our business (including those that holdmajor assets, intellectual property rights, proprietary technologies and R&D). The aggregatenet income from continuing operations before income taxes of the Major Subsidiariesaccounted for 110.8%, 99.8% and 137.3% of the net income from continuing operations beforeincome taxes of our Group for the years ended December 31, 2019 and 2020 and the six monthsended June 30, 2021, respectively, as there were other subsidiaries that recorded net loss fromcontinuing operations before income taxes, and the net revenues of the Major Subsidiariesaccounted for 98.1%, 92.9% and 95.5% of the total net revenues of our Group for the yearsended December 31, 2019 and 2020 and the six months ended June 30, 2021, respectively.There was no other individual non-Major Subsidiaries that contributed more than 10% of thetotal net revenues and net income from continuing operations before income taxes to our Groupsimultaneously. The total assets of the Major Subsidiaries represented 69.8%, 65.5% and71.5% of the total assets of our Group as of December 31, 2019 and 2020 and June 30, 2021,respectively. As such, we have disclosed the particulars of the changes in our share capital andthe share capital of the Major Subsidiaries in “Statutory and General Information — FurtherInformation About Us” in Appendix IV, and particulars of the commissions, discounts,brokerage fee and authorized debentures in respect of our Major Subsidiaries are set out in“Statutory and General Information — Other Information — Miscellaneous” in Appendix IV.


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We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from therequirements under Paragraphs 13 and 26 of Part A of Appendix 1 to the Hong Kong ListingRules. We have applied for, and the SFC has granted, an exemption from strict compliance withthe requirements under Paragraphs 11, 14 and 25 of the Third Schedule to the Companies(Winding Up and Miscellaneous Provisions) Ordinance, to the extent not strictly met by thecurrent disclosure in this document. The SFC has granted the above exemption on theconditions that: (i) the particulars of such exemption are set out in this document; and (ii) thisdocument will be issued on or before November 29, 2021.

DISCLOSURE OF INFORMATION ON SUBSIDIARIES WHOSE PROFITS ORASSETS MAKE MATERIAL CONTRIBUTIONS TO US

Paragraph 29(1) of Part A of Appendix 1 to the Hong Kong Listing Rules and paragraph 29 ofthe Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinancerequire the listing document to include information in relation to the name, date and countryof incorporation, the public or private status and the general nature of the business, the issuedcapital and the proportion thereof held or intended to be held, of every company the whole ofthe capital of which or a substantial proportion thereof is held or intended to be held by us, orwhose profits or assets make, or will make, a material contribution to the figures in theaccountant’s report or the next published accounts.

We believe that it would be unduly burdensome for us to procure this information for thereasons as set out in this section headed “— Particulars of any Commissions, Discounts andBrokerages, Alterations of Capital and Authorized Debentures” above. As such, only theparticulars in relation to our Major Subsidiaries are set out in “History and Corporate Structure— Corporate Structure — Major Subsidiaries” and “Statutory and General Information —Further Information About Us” in Appendix IV, which should be sufficient for potentialinvestors to make an informed assessment of our Company in their investment decisions.

We are of the view that all material information necessary for investors to make an informedassessment of the business, assets and liabilities, financial position, trading position,management and prospect of the Group has been disclosed in this document, and as such, thenon-disclosure of such information will not prejudice the interest of the investors.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements under Paragraph 29(1) of Part A of Appendix 1 to the HongKong Listing Rules. We have applied for, and the SFC has granted, an exemption from strictcompliance with the requirements under Paragraph 29 of the Third Schedule to the Companies(Winding Up and Miscellaneous Provisions) Ordinance, to the extent not strictly met by thecurrent disclosure in this document. The SFC exemption was granted on the conditions that: (i)the particulars of such exemption are set out in this document; and (ii) this document will beissued on or before November 29, 2021.

DISCLOSURE REQUIREMENT OF OPTIONS

Paragraph 27 of Part A of Appendix 1 to the Hong Kong Listing Rules requires our Companyto set out in the listing document particulars of any capital of any member of our group thatis under option, or agreed conditionally or unconditionally to be put under option, including theconsideration for which the option was or will be granted and the price and duration of theoption, and the name and address of the grantee.


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Paragraph 10 of the Third Schedule to the Companies (Winding Up and MiscellaneousProvisions) Ordinance further requires our Company to set out in the listing document, amongother things, details of the number, description and amount of any of its shares or debentureswhich any person has, or is entitled to be given, an option to subscribe for, together with thecertain particulars of the option, namely the period during which it is exercisable, the price tobe paid for shares or debentures subscribed for under it, the consideration given or to be given(if any) and the names and addresses of the persons to whom it was given.

We and our subsidiaries (including our consolidated affiliated entities) may, from time to time,adopt equity incentive plans, including: (a) our 2010 Share Incentive Plan adopted in August2010 and (b) our 2014 Share Incentive Plan adopted in March 2014 (together the “ShareIncentive Plans”). The Share Incentive Plans are not subject to Chapter 17 of the Hong KongListing Rules pursuant to Rule 19C.11 of the Hong Kong Listing Rules and the SFC has granteda partial exemption from strict compliance with Part XV of the SFO (other than divisions 5,11 and 12). The Share Incentive Plans allow us and our subsidiaries (including our consolidatedaffiliated entities) to grant options to employees, directors and consultants. As of September30, 2021, the total number of shares underlying outstanding options and restricted share unitsgranted pursuant to the Share Incentive Plans represent only 3.2% of our Company’s totalissued share capital. Assuming full exercise of these outstanding options, the shareholding ofour Shareholders will be diluted by approximately 3.1%, based on the outstanding shares of ourCompany in issue as of September 30, 2021.

Details of the Share Incentive Plans are disclosed in “Directors and Senior Management —Compensation — Share Incentive Plans”. The disclosure is substantially the same as those inour 20-F filings and comply with applicable U.S. laws and regulations. It does not contain allthe content set out under, and is therefore not in strict compliance with the requirements under,Paragraph 27 of Part A of Appendix 1 to the Hong Kong Listing Rules and Paragraph 10 of Part1 of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)Ordinance.

For the reasons stated above, we believe that strict compliance with the above requirementswould be unduly burdensome, unnecessary and/or inappropriate for us, and would not bematerial or meaningful to Hong Kong investors. We are of the view that all materialinformation necessary for investors to make an informed assessment of the business, assets andliabilities, financial position, trading position, management and prospect of the Group has beendisclosed in this document, and as such, the non-disclosure of such information will notprejudice the interest of the investors.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements under, Paragraph 27 of Part A of Appendix 1 to the HongKong Listing Rules to the extent not strictly met by the current disclosure in this document.We have applied for, and the SFC has granted, an exemption from strict compliance with therequirements under Paragraph 10 of the Third Schedule to the Companies (Winding Up andMiscellaneous Provisions) Ordinance, to the extent not strictly met by the current disclosurein this document. The SFC exemption has granted on the conditions that: (i) the particulars ofsuch exemption are set out in this document; and (ii) this document will be issued on or beforeNovember 29, 2021.


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DISCLOSURE REQUIREMENTS OF THE REMUNERATION OF DIRECTORS ANDFIVE INDIVIDUALS WHOSE EMOLUMENTS WERE HIGHEST

Paragraph 33(2) of Part A of Appendix 1 to the Hong Kong Listing Rules requires the listingdocument to include information in respect of directors’ emoluments during the three financialyears ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2021.Paragraph 46(2) of Part A of Appendix 1 to the Hong Kong Listing Rules requires the listingdocument to include the aggregate of the remuneration paid and benefits in kind granted to thedirectors of the issuer in respect of the last completed financial year, and Paragraph 46(3) ofPart A of Appendix 1 to the Hong Kong Listing Rules requires information in relation to anestimate of the aggregate remuneration and benefits in kind payable to directors in respect ofthe current financial year to be set out in the listing document.

Paragraph 33(3) of Part A of Appendix 1 to the Hong Kong Listing Rules requires the listingdocument to include information with respect to the five individuals whose emoluments werehighest in the group for the year if one or more individuals whose emoluments were the highesthave not been included under Paragraph 33(2) of Part A of Appendix 1 to the Hong KongListing Rules.

The aggregate fees, salaries and benefits paid and accrued to our directors and executiveofficers as a group are disclosed in the section headed “Directors and Senior Management —Compensation”. We confirm that the current disclosure complies with U.S. annual reportingrequirements and is in line with our disclosure in our annual reports on Form 20-F.

We believe that additional disclosure required by Paragraphs 33(2), 33(3), 46(2) and 46(3) ofPart A of Appendix 1 to the Hong Kong Listing Rules would be unduly burdensome and wouldnot provide additional meaningful disclosure for potential Hong Kong investors.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements under Paragraphs 33(2), 33(3), 46(2) and 46(3) of Part A ofAppendix 1 to the Hong Kong Listing Rules, to the extent not strictly met by the currentdisclosure in this document.

DISCLOSURE OF INTERESTS INFORMATION

Part XV of the SFO imposes duties of disclosure of interests in shares. Paragraphs 41(4) and45 of Part A of Appendix 1 and Practice Note 5 to the Hong Kong Listing Rules require thedisclosure of interests information in respect of shareholders’ and directors’ interests in thelisting document.

We have applied for, and the SFC has granted, a partial exemption from strict compliance withPart XV of the SFO as set out below under the sub-section headed “Disclosure of Interest underPart XV of the SFO”.

The U.S. Exchange Act and the rules and regulations promulgated thereunder requiredisclosure of interests by shareholders that are broadly equivalent to Part XV of the SFO.Relevant disclosure in respect of the substantial shareholder’s interests can be found in “MajorShareholders”.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with Paragraphs 41(4) and 45 of Part A of Appendix 1 and Practice Note 5 to theHong Kong Listing Rules on the following conditions:


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(a) the SFC granting us and our shareholders a partial exemption from strict compliance withPart XV of the SFO;

(b) we will file with the Hong Kong Stock Exchange, as soon as practicable, any declarationof shareholding and securities transactions filed with the SEC; and

(c) we will disclose in present and future listing documents any shareholding interests asdisclosed in an SEC filing and the relationship between our directors, officers, membersof committees and their relationship to any controlling shareholders.

DISCLOSURE OF OFFER PRICE

Paragraph 15(2)(c) of Part A of Appendix 1 to the Hong Kong Listing Rules provides that theissue price or offer price of each security must be disclosed in the listing document.

The Public Offer Price will be determined by reference to, among other factors, the closingprice of our ADS price on the Nasdaq on the last trading date on or before the pricedetermination date and we have no control on the market price of our ADSs traded on theNasdaq. Given the ADSs of our Company are freely tradable on the Nasdaq, there may be pricefluctuations in the ADSs as a result of market volatility and other factors during the periodfrom the bulk-printing of this document until the pricing of the Global Offering.

Setting a fixed price or a price range with a low end offer price per Offer Share may adverselyaffect the market price of the ADSs and the Hong Kong Offer Shares considering, among otherfactors, that this may indicate an arbitrary floor price and may potentially prejudice our abilityto price in the best interest of our Company and our Shareholders.

A maximum Public Offer Price will be disclosed in this document and the Green ApplicationForm. This alternative disclosure approach would not prejudice the interests of the investingpublic in Hong Kong.

Given in no circumstances will the Public Offer Price for the Hong Kong Offer Shares begreater than the maximum Public Offer Price as stated in this document and the GreenApplication Form, the disclosure of the maximum Public Offer Price in this document will bein compliance with the requirement to disclose the “amount payable on application andallotment on each share” as required by paragraph 9 of the Third Schedule of the Companies(Winding Up and Miscellaneous Provisions) Ordinance.

Sufficient disclosure in relation to this alternative pricing mechanism will be disclosed in therelevant sections of this document, which will provide Hong Kong investors with sufficientinformation to form informed decisions of their investment.

SUBSCRIPTION FOR SHARES BY EXISTING SHAREHOLDERS

Rule 2.03(2) of the Hong Kong Listing Rules provides that the issue and marketing ofsecurities should be conducted in a fair and orderly manner.

Rule 10.04 of the Hong Kong Listing Rules requires that existing shareholders may onlysubscribe for or purchase any securities for which listing is sought that are being marketed byor on behalf of a new applicant either in his/her/its own name or through nominees if theconditions in Rule 10.03 of the Hong Kong Listing Rules are fulfilled. Paragraph 5(2) ofAppendix 6 to the Hong Kong Listing Rules states that, without the prior written consent of


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the Hong Kong Stock Exchange, no allocations will be permitted to be made to directors,existing shareholders of a listing applicant or their close associates, unless the conditions setout in Rules 10.03 and 10.04 of the Hong Kong Listing Rules are fulfilled.

The conditions in Rules 10.03(1) and (2) of the Hong Kong Listing Rules are as follows:

(i) that no securities are offered to the purchasers on a preferential basis and no preferentialtreatment is given to them in the allocation of the securities; and

(ii) that the minimum prescribed percentage of public shareholders required by Rule 8.08(1)of the Hong Kong Listing Rules is achieved.

Rule 19.31 of the Hong Kong Listing Rules provides that the requirement under Rule 8.08 ofthe Hong Kong Listing Rules to maintain a minimum percentage of public shareholders doesnot apply to a secondary listing.

The Hong Kong Stock Exchange’s Guidance Letter HKEX-GL85-16 provides that the HongKong Stock Exchange will consider granting a waiver from Rule 10.04 of the Hong KongListing Rules and consent, pursuant to Paragraph 5(2) of Appendix 6 to the Hong Kong ListingRules, allowing an applicant’s existing shareholders or their close associates to participate inan initial public offering if any actual or perceived preferential treatment arising from theirability to influence the applicant during the allocation process can be addressed.

Our Company has been listed on the Nasdaq since April 2014 and has a wide and diverseshareholder base. There is a robust level of trade in our Company’s securities, with significantdaily trading volume resulting in daily changes to our existing shareholders. As a companylisted on the Nasdaq, we are not in a position to prevent any person or entity from acquiringour listed securities prior to the allocation of shares in connection with the Global Offering. Itwould therefore be unduly burdensome for us to seek the prior consent of the Hong Kong StockExchange for each of our existing shareholders or their close associates who subscribe forShares in the Global Offering.

Since we do not require shareholders’ approval in order to proceed with the Global Offering,any persons (other than its directors and senior management, SINA Corporation and Ali WB)who may, as a result of dealings, become our shareholders (together, the “Permitted ExistingShareholders”) would have no influence over the Global Offering and would not be inpossession of any non-public inside information and would therefore effectively be in the sameposition as any of the public investors.

As of June 30, 2021, other than SINA Corporation and Ali WB, we had no shareholder who wasnot a director and held 10% or more of our issued share capital.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements of Rule 10.04 of and Paragraph 5(2) of Appendix 6 to theHong Kong Listing Rules in respect of the restriction on Permitted Existing Shareholders tosubscribe for or purchase Shares in the Global Offering, subject to the following conditions:

(a) each Permitted Existing Shareholder is interested in less than 5% of our issued sharecapital immediately before the Listing;

(b) each Permitted Existing Shareholder is neither our director nor member of our seniormanagement;


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(c) the Permitted Existing Shareholders do not have the power to appoint directors or anyother special rights in us;

(d) the Permitted Existing Shareholders do not have influence over the offering process andwill be treated the same as other applicants and placees in the Global Offering;

(e) the Permitted Existing Shareholders and their close associates will be subject to the samebook-building and allocation process as other investors in the Global Offering; and

(f) no preferential treatment will be given to the Permitted Existing Shareholders and theirclose associates in the allocation process by virtue of their relationship with ourCompany. To the best of our knowledge and belief, each of our Company, the JointSponsors and the Joint Representatives (based on (i) its discussions with our Companyand the Joint Representatives and (ii) the confirmations in the form as set out in ExhibitA to be submitted to the Stock Exchange by our Company and the Joint Representatives)confirms to the Hong Kong Stock Exchange in writing that, to the best of its knowledgeand belief, it has no reason to believe that any preferential treatment has been, or will be,given to the Permitted Existing Shareholders or their close associates as a placee in theInternational Offering by virtue of their relationship with our Company.

We expect to satisfy all the conditions set out in paragraph 4.20 of Guidance LetterHKEX-GL85-16 so that no actual or perceived preference will be given to the PermittedExisting Shareholders due to their existing shareholdings in our Company.

Allocation to the Permitted Existing Shareholders and/or their close associates will not bedisclosed in our allotment results announcement (other than to the extent that such PermittedExisting Shareholders or close associates subscribe for shares as cornerstone investors) unlesssuch permitted existing shareholders are interested in 5% or more of our issued share capitalafter the Global Offering as disclosed in any public filings with the SEC, as it would be undulyburdensome for us to disclose such information given that there is no requirement to discloseinterests in equity securities under the U.S. Exchange Act unless the beneficial ownership ofsuch person (including directors and officers of the company concerned) reaches more than 5%of equity securities registered under section 12 of the U.S. Exchange Act.

THREE YEAR RESTRICTIONS TO SPIN-OFFS

Rule 19C.11 of the Hong Kong Listing Rules provides that, among other things, paragraphs 1to 3(b) and 3(d) to 5 of Practice Note 15 to the Hong Kong Listing Rules do not apply to aQualifying Issuer that has, or is seeking, a secondary listing on the Hong Kong StockExchange. This exception is limited to circumstances where the spun-off assets or businessesare not to be listed on the Hong Kong Stock Exchange’s markets and the approval ofshareholders of the Parent is not required.

Paragraph 3(b) of Practice Note 15 to the Hong Kong Listing Rules provides that the ListingCommittee would not normally consider a spin-off application within three years of the dateof listing of the Parent, because the original listing of the Parent will have been approved onthe basis of the Parent’s portfolio of businesses at the time of listing, and the expectation ofinvestors at that time would have been that the Parent would continue to develop thosebusinesses.


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Our Company, from time to time, consider different opportunities to bring value to ourShareholders, including spinning off any of our business subsidiaries when they have reacheda desirable level of maturity. The exact timing of any potential spin-off would depend on thedevelopment of each of the business subsidiaries and market conditions. In some cases, it ispossible that a spin-off within three years of the Listing may be appropriate. As of the LatestPracticable Date, we have not identified any target for a potential spin-off and as a result wedo not have any information relating to the identity of any spin-off target or any other detailsof any spin-off; and accordingly, there is no material omission of any information relating toany possible spin-off in this document. Any potential spin-offs by our Company will be subjectto compliance with all applicable requirements under the Hong Kong Listing Rules, includingPractice Note 15 to the Hong Kong Listing Rules, unless otherwise waived by the Hong KongStock Exchange.

No shareholders’ approval with respect to a potential spin-off will be required under ourArticles under applicable U.S. regulations and Nasdaq listing rules. Further, as we are aGrandfathered Greater China Issuer and therefore exempt from the requirements under Chapter14 of the Hong Kong Listing Rules pursuant to Rule 19C.11 of the Hong Kong Listing Rules,no shareholders’ approval will be required under the Hong Kong Listing Rules as well.

The effect of a spin-off to our Shareholders should be the same regardless of whether or notthe businesses to be potentially spun-off are to be listed on the Hong Kong Stock Exchange(save with respect to any preferential rights to subscribe for shares that are commonly providedin spin-offs on the Hong Kong Stock Exchange). Given the fact that certain spin-offs byGrandfathered Greater China Issuers are allowed within three years after their listing in HongKong pursuant to Rule 19C.11 of the Hong Kong Listing Rules, we believe that the three-yearrestriction on spin-offs on the Hong Kong Stock Exchange should also be waived and shall notapply to a potential spin-off by our Company.

Our Company and any subsidiary in respect of which a potential spin-off is contemplated willbe subject to compliance with all other applicable requirements under the Hong Kong ListingRules, including the remaining requirements of Practice Note 15 to the Hong Kong ListingRules and the applicable listing eligibility requirements under the Hong Kong Listing Rules,unless otherwise waived by the Hong Kong Stock Exchange.

Under U.S. securities laws and Nasdaq rules, we are not subject to any restrictions similar tothe three-year restriction under paragraph 3(b) of Practice Note 15 to the Hong Kong ListingRules in relation to the spin-offs of its business subsidiaries, nor is there any requirement forus to disclose any details of its potential spin-off entities when such information is notavailable because of the absence of any concrete spin-off plan.

Our directors owe fiduciary duties to our Company, including the duty to act in what theyconsider in good faith to be in the best interests of our Company; as such they will only pursuea potential spin-off if there are clear commercial benefits both to our Company and the entityto be spun off; and the directors will not direct our Company to conduct any spin-off if theybelieve it will have an adverse impact on the interests of our Shareholders.

We have applied for, and the Hong Kong Stock Exchange has granted, a waiver from strictcompliance with the requirements in paragraph 3(b) of Practice Note 15 to the Hong KongListing Rules, on the following grounds:

(i) we will not within three years after the Listing spin off any of our business subsidiariesuntil we confirm with the Hong Kong Stock Exchange with basis that the potentialspin-off would not render our Company, excluding any subsidiary to be spun off, failing


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to meet the eligibility requirements under Rules 19C.02 and 19C.05 of the Hong KongListing Rules based on the financial information of any subsidiary to be spun off at thetime of the Listing, and where more than one subsidiary is to be spun off, the assessmentwill be made on a cumulative basis;

(ii) we will disclose in this document our intention relating to any potential spin-off withinthree years after the Listing and the risks relating to the uncertainty and timing of anypotential spin-offs. See “Risk Factors — Risks Relating to Our Business — Divestituresof businesses and assets may have a material and adverse effect on our business andfinancial condition”;

(iii) any potential spin-offs by our Company will be subject to the requirements of PracticeNote 15 to the Hong Kong Listing Rules (other than paragraph 3(b) thereof), includingthat each of our Company and any business subsidiary to be spun off will satisfy theapplicable listing eligibility requirements on a standalone basis; and

(iv) disclosure of this waiver in this document.

NOT A PUBLIC COMPANY IN HONG KONG UNDER THE TAKEOVERS CODE

Section 4.1 of the Introduction to the Takeovers Code provides that the Takeovers Code appliesto “public companies in Hong Kong.” The note to Section 4.2 of the Introduction to theTakeovers Code provides that a Grandfathered Greater China Issuer within the meaning of Rule19C.01 of the Hong Kong Listing Rules with a secondary listing on the Hong Kong StockExchange will not normally be regarded as a public company in Hong Kong under Section 4.2of the Introduction to the Takeovers Code. Where the bulk of trading in the shares of aGrandfathered Greater China Issuer migrates to Hong Kong such that it would be treated ashaving a dual-primary listing in Hong Kong pursuant to Rule 19C.13 of the Listing Rules, theTakeovers Code will apply to it.

We have applied for, and the SFC has granted, a ruling that our Company is not a “publiccompany in Hong Kong” for the purposes of the Takeovers Code.

DISCLOSURE OF INTERESTS UNDER PART XV OF THE SFO

Part XV of the SFO imposes duties of disclosure of interests in the securities of companieswhose securities are listed on the Hong Kong Stock Exchange on the relevant company, itssubstantial shareholders and its directors/chief executives. Under the U.S. Exchange Act, anyperson (including directors and officers of the company concerned) who acquires beneficialownership, as determined in accordance with the rules and regulations of the SEC and whichincludes the power to direct the voting or the disposition of the securities, of more than 5% ofa class of equity securities registered under Section 12 of the U.S. Exchange Act must filebeneficial owner reports with the SEC, and such person must promptly report any materialchange in the information provided (including any acquisition or disposition of 1% or more ofthe class of equity securities concerned), unless exceptions apply. Therefore, compliance withPart XV of the SFO would subject our corporate insiders to a second level of reporting, whichwould be unduly burdensome to them, would result in additional costs and would not bemeaningful, since the statutory disclosure of interest obligations under the U.S. Exchange Actthat apply to us and our corporate insiders would provide our investors with sufficientinformation relating to the shareholding interests of our significant shareholders.

We have applied for, and the SFC has granted, a partial exemption from Part XV of the SFO(other than Divisions 5, 11 and 12) on the following conditions:


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(a) the bulk of trading in the Shares is not considered to have migrated to Hong Kong on apermanent basis in accordance with Rule 19C.13 of the Hong Kong Listing Rules;

(b) the disclosures of interest filed in the SEC are also filed with the Hong Kong StockExchange as soon as practicable, which will then publish such disclosure in the samemanner as disclosures made under Part XV of the SFO; and

(c) we will advise the SFC if there is any material change to any of the information whichhas been provided to the SFC, including any significant changes to the disclosurerequirements in the U.S. and any significant changes in the volume of our worldwideshare turnover that takes place on the Hong Kong Stock Exchange.


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DIRECTORS

Name Address Nationality

Charles Guowei Chao Room 2403, No. 3, 258 Lane,Puming Road, Pudong New District,Shanghai, China

Hong Kong,Chinese

Hong Du No. 2202, Building No. 22,Yiyuan, Anhui Beili, Chaoyang District,Beijing, China

Chinese

Daniel Yong Zhang Room 501, Building No. 21, Lane 259,Huan Long Road, Shanghai, China

Chinese

Pochin Christopher Lu No. 30, Lane 666, She Bei Road,Shanghai 201602, China

American

Pehong Chen 93 Ridgeview Drive,Atherton, California, the U.S.A.

American

Gaofei Wang No. 2503, Building No. 26,Jingtongyuan, Chaoyang District,Beijing, China

Chinese

Yan Wang Flat D, 32/F, Tower 1,University Heights, 23 Pokfield Road,Pokfulam, Hong Kong

Hong Kong,Chinese

Further information about our directors and other senior managers are set out in “Directors andSenior Management”.

DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

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Parties Involved in the Global Offering

Joint Sponsors Goldman Sachs (Asia) L.L.C.68/F Cheung Kong Center2 Queen’s Road CentralHong Kong

Credit Suisse (Hong Kong) LimitedLevel 88 International Commerce Centre1 Austin Road WestKowloonHong Kong

CLSA Capital Markets Limited18/F, One Pacific Place88 QueenswayHong Kong

China International Capital CorporationHong Kong Securities Limited29/F, One International Finance Centre1 Harbour View StreetCentral, Hong Kong

Joint Representatives Goldman Sachs (Asia) L.L.C68/F Cheung Kong Center2 Queen’s Road CentralHong Kong


CLSA Limited18/F, One Pacific Place88 QueenswayHong Kong



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Joint Global Coordinators Goldman Sachs (Asia) L.L.C68/F Cheung Kong Center2 Queen’s Road CentralHong Kong




Nomura International (Hong Kong)Limited30/F, Two International Finance Centre8 Finance StreetCentral, Hong Kong

Deutsche Bank AG, Hong Kong BranchLevel 60. International Commerce Centre1 Austin Road WestKowloon, Hong Kong

Joint Bookrunners Goldman Sachs (Asia) L.L.C68/F Cheung Kong Center2 Queen’s Road CentralHong Kong




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Haitong International Securities CompanyLimited22/F, Li Po Chun Chambers189 Des Voeux Road CentralHong Kong

Huatai Financial Holdings (Hong Kong)Limited62/F, The Center99 Queen’s Road CentralHong Kong

Valuable Capital Limited3601, China Merchants TowerShunTak Centre,168-200 Connaught Road CentralHong Kong

ABCI Capital Limited11/F, Agricultural Bank of China Tower50 Connaught Road Central,Hong Kong

CMBC Securities Company Limited45/F, One Exchange Square8 Connaught Place,Central, Hong Kong

CMB International Capital Limited45/F, Champion Tower3 Garden RoadCentral, Hong Kong


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Joint Lead Managers Goldman Sachs (Asia) L.L.C68/F Cheung Kong Center2 Queen’s Road CentralHong Kong






Haitong International Securities CompanyLimited22/F, Li Po Chun Chambers189 Des Voeux Road CentralHong Kong

Huatai Financial Holdings (Hong Kong)Limited62/F, The Center99 Queen’s Road CentralHong Kong

Valuable Capital Limited3601, China Merchants TowerShunTak Centre,168-200 Connaught Road CentralHong Kong


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ABCI Securities Company Limited10/F, Agricultural Bank of China Tower50 Connaught Road Central,Hong Kong

CMBC Securities Company Limited45/F, One Exchange Square8 Connaught Place,Central, Hong Kong

CMB International Capital Limited45/F, Champion Tower3 Garden RoadCentral, Hong Kong

Our Legal Advisers As to Hong Kong and U.S. laws:

Skadden, Arps, Slate, Meagher &Flom and affiliates42nd Floor, Edinburgh TowerThe Landmark15 Queen’s Road CentralHong Kong

As to PRC laws:

TransAsia LawyersSuite 2218,China World Office 11Jianguomenwai AvenueBeijingPRC

As to Cayman Islands laws:

Maples and Calder (Hong Kong) LLP26th Floor, Central Plaza18 Harbour RoadWanchaiHong Kong


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Legal Advisers to the Joint Sponsors andthe Underwriters

As to Hong Kong and U.S. laws:

Simpson Thacher & Bartlett35/F ICBC Tower3 Garden RoadCentral, Hong Kong

As to PRC laws:

Haiwen & Partners20/F, Fortune Financial Center5 Dong San Huan Central RoadChaoyang DistrictBeijingChina

Auditor and Reporting Accountant PricewaterhouseCoopersCertified Public AccountantsRegistered Public Interest Entity Auditor22/F Prince’s BuildingCentralHong Kong

Industry Consultant China Insights Consultancy Limited10F, Block B, Jing’an International Center,88 Puji Road, Jing’an District,Shanghai 200070,China

Receiving Bank CMB Wing Lung Bank LimitedCMB Wing Lung Bank Building45 Des Voeux Road CentralHong Kong


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Registered Office Vistra (Cayman) LimitedP.O. Box 31119 Grand PavilionHibiscus Way, 802 West Bay RoadGrand Cayman, KY1-1205, Cayman Islands

Principal Executive Offices of MainOperations

8/F, Qihao Plaza, No. 8 Xinyuan S. RoadChaoyang DistrictBeijing 100027

Address in Hong Kong Level 54, Hopewell Centre183 Queen’s Road EastHong Kong

Company’s Website http://ir.weibo.com/(The information on the website does notform part of this document)

Authorized Representative Yunyun Zhang7/F, SINA Plaza, No.8 Courtyard 10 WestXibeiwang East Road, Haidian DistrictBeijing 100193, PRC

Cayman Islands Principal Share Registrar Global Incorporation Centre LimitedUnit A, 5th FloorNo. 45 Nanchang RoadUrban City Center, Shanghai 200020China

Hong Kong Share Registrar Computershare Hong Kong InvestorServices LimitedShops 1712-1716, 17th FloorHopewell Centre183 Queen’s Road EastWan Chai, Hong Kong

Compliance Advisor Somerley Capital Limited20/F China Building29 Queen’s Road CentralHong Kong

CORPORATE INFORMATION

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Principal Banks China Merchants Bank39, Central East Third Ring RoadChaoyang DistrictBeijingPRC

China Minsheng BankThe bottom merchant of Tongjing GardenJiukeshu West RoadTongzhou DistrictBeijingPRC

Guangdong Development BankNo. 4 Foreign enterprise buildingBlock B, No. 14 west Dawang RoadChaoyang DistrictBeijingPRC

CORPORATE INFORMATION

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OVERVIEW

We incorporated our Company under the laws of the Cayman Islands on June 2010. We are aleading social media platform in China for people to create, discover and distribute content. Wehave transformed the way people express themselves and interact with others in the publicinternet space. We serve a wide range of users including ordinary people, celebrities, keyopinion leaders and other public figures or influencers, as well as media outlets, businesses,government agencies, charities, and other organizations, making us a microcosm of the Chinesesociety.

KEY MILESTONES

Our key business milestones are summarized below:

Date Event

2009 Weibo was first launched by SINA Corporation as one of the earliest socialmedia platforms providing microblogging service.

2010 We introduced the first generation of Weibo mobile app.

2012 We started monetization through advertising business.

2013 We launched FST, a real time bidding advertising system.

We began to explore other monetization models through value-added service,such as membership service and online gaming.

In April, Alibaba invested in us with 18% of the then outstanding shares of ourCompany.

2014 In April, our Company completed the initial public offering (IPO) and waslisted on the Nasdaq under the symbol “WB”.

Alibaba further increased its shareholding of our Company after the IPO onNasdaq.

We introduced Weibo Hot Search as an early mover in China to introduce hottopic ranking chart, which facilitates the discovery of breaking news andtrendy content on a real time basis.

2016 We launched the live steaming feature.

2017 Our annual revenue crossed the US$1 billion mark.

2018 Our average DAUs reached the 200 million milestone.

2019 Our MAUs surpassed the 500 million milestone.

HISTORY AND CORPORATE STRUCTURE

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CORPORATE STRUCTURE

Our corporate structure

Weibo Corporation is the offshore holding company of our group and conducts businessoperations in China through wholly owned and partially owned subsidiaries, and consolidatedVIEs and VIEs’ subsidiaries. The following diagram illustrates our corporate structure,including our major subsidiaries and VIEs, as of September 30, 2021:

Weibo Corporation(Cayman Islands)

Weibo Hong Kong Limited

(“Weibo HK”)

(Hong Kong)

Weibo Internet Technology

(China) Co., Ltd.

(“Weibo Technology”)

WB Online Investment Limited

(“WB Online”)

(Cayman Islands)

Offshore

Onshore

Beijing Weimeng

Technology Co., Ltd.(1)

(“Weimeng”)

Beijing Weibo Interactive

Internet Technology Co., Ltd.

(“Weibo Interactive”)

Beijing Weimeng

Chuangke Investment

Management Co., Ltd.(2)

(“Weimeng Chuangke”)

100%

100%

100%

100%

Hangzhou Weishichangmeng

Advertising Co., Ltd.

(“Weishichangmeng”)

100%

Equity interest.Contractual arrangements including loan agreements, share transfer agreements, loan repayment agreements,agreements on authorization to exercise shareholder’s voting power, share pledge agreements, exclusivetechnical services agreement, exclusive sales agency agreement, trademark license agreement and spousalconsent letters.

(1) The shareholders of Weimeng are four PRC employees of us or SINA, namely, Yunli Liu, Wei Wang, WeiZheng and Zenghui Cao, holding 29.70%, 29.70%, 19.80% and 19.80% of Weimeng’s equity interests,respectively, and WangTouTongDa (Beijing) Technology Co., Ltd., a third-party minority stake holder,holding 1% of Weimeng’s equity interest.

(2) The shareholders of Weimeng Chuangke are two PRC employees of our company or SINA, namely, YunliLiu and Wei Wang, holding 50% and 50% of Weimeng Chuangke’s equity interests, respectively.


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Major Subsidiaries

The principal business activities and date of establishment of each of our Major Subsidiariesare shown below:

Major Subsidiaries Principal Business ActivitiesDate and Jurisdiction

of Establishment

WB Online Investment Limited investment holding June 4, 2014, Cayman Islands

Weibo Hong Kong Limited(formerly known as T.CNHong Kong Limited)

investment holding July 19, 2010, Hong Kong

Weibo Internet Technology(China) Co., Ltd.

provision of technical andconsulting services

October 11, 2010, PRC

Hangzhou WeishichangmengAdvertising Co., Ltd.

provision of advertising andmarketing services

September 25, 2018, PRC

Beijing Weimeng TechnologyCo., Ltd

provision of advertising,marketing and internetinformation services

August 9, 2010, PRC

Beijing Weibo Interactive InternetTechnology Co., Ltd.

provision of game-relatedservices

September 8, 2011, PRC

Beijing Weimeng ChuangkeInvestment ManagementCo., Ltd.

investment holding April 9, 2014, PRC

Acquisitions, Disposals and Strategic investments

We have not conducted any major acquisition or disposal during the Track Record Period.

Contractual Arrangements

In order to comply with the PRC government’s foreign investment restrictions on internetinformation services and other laws and regulations, we conduct all our internet informationservices and value-added telecommunication services in China via our significant domesticVIEs. Our consolidated affiliated Chinese entities hold the licenses and assets that areimportant to our business operations including the Internet Content Provision License, theOnline Culture Operating Permit and domain names held by Weimeng and our investments heldby Weimeng Chuangke. As of the Latest Practicable Date, the shareholders of Weimeng arefour PRC employees of us or SINA, namely, Yunli Liu (Vice President and assistant to theChairman of SINA Corporation), Wei Wang (Chief Operating Officer of our Company), WeiZheng (Vice President, Products of our Company) and Zenghui Cao (Senior Vice President,Operation of our Company), holding 29.70%, 29.70%, 19.80% and 19.80% of Weimeng’sequity interests, respectively, and WangTouTongDa (Beijing) Technology Co., Ltd., athird-party minority stake holder holding 1% of Weimeng’s equity interest. The shareholdersof Weimeng Chuangke are two PRC employees of our company or SINA, namely, Yunli Liu,and Wei Wang, holding 50% and 50% of Weimeng Chuangke’s equity interests, respectively.


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Due to historical reasons, there was overlap in terms of management and manpower betweenSINA and us when Weimeng and Weimeng Chuangke were established in August 2010 andApril 2014 respectively, and certain SINA employees were nominated to be the registeredshareholders of our VIE entities.

The diagram below illustrates the general structure of the economic flow and control under theVIE structure created by the contractual arrangements:

Our Company

VIE

shareholdersWeibo Technology

Weimeng and its subsidiary/Weimeng Chuangke

Notes:

(1) “ ” denotes the direction of legal and beneficial ownership.

“ ” denotes the contractual arrangements among the VIEs, VIE shareholders, and our subsidiaries.

The capital investments in both Weimeng and Weimeng Chuangke were funded through WeiboTechnology and recorded as interest-free loans to the respective shareholders of Weimeng andWeimeng Chuangke. As of June 30, 2021, the total amount of interest-free loans to theshareholders of Weimeng was RMB555.0 million (US$86.0 million) and to the shareholders ofWeimeng Chuangke was RMB30.0 million (US$4.6 million). Under various contractualagreements, the shareholders of our consolidated VIEs are required to transfer their ownershipin the VIEs to our wholly owned subsidiary in China, Weibo Technology, when permitted byPRC laws and regulations, or to our designees at any time for the amount of the outstandingloans, and all voting rights of our consolidated VIEs are assigned to Weibo Technology.Through Weibo Technology, we have also entered into an exclusive technical servicesagreement and other service agreements with each of our consolidated VIEs, under whichWeibo Technology provides technical services and other services to these VIEs in exchange forsubstantially all of their economic benefits. In addition, the shareholders of our consolidatedVIEs have pledged their shares in these VIEs as collateral for repayment of loans and paymentof fees on technical and other services due to us.

Weibo Technology recognized service fees from all the VIEs in the amount of US$842.6million, US$832.4 million, US$766.8 million and US$438.5 million for the years endedDecember 31, 2018, 2019 and 2020 and the six months ended June 30, 2021 in considerationfor services provided to the VIEs. Net revenues from VIEs and VIEs’ subsidiaries accountedfor 82.4%, 83.4%, 78.1% and 76.9% of our Company’s net revenues for the years endedDecember 31, 2018, 2019, and 2020 and the six months ended June 30, 2021. The contractualarrangements currently in force in relation to Weimeng were first established on October 11,2010 and certain agreements were subsequently entered into on January 19, 2018. The


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contractual arrangements currently in force in relation to Weimeng Chuangke were firstestablished on April 9, 2014 and certain agreements were subsequently entered into onFebruary 17, 2020. See “Statutory and General Information — Further information about ourbusiness — Summary of the contractual arrangement” in Appendix IV for a full list of thecontracts constituting the contractual arrangements.

Terms of the arrangements with consolidated affiliated Chinese entities

The following is a summary of the VIE agreements with Weimeng. The VIE agreements withWeimeng Chuangke are substantially the same as those described below:

Loan Agreements

Weibo Technology has granted interest-free loans to the shareholders of Weimeng with the solepurpose of providing funds necessary for those shareholders to make capital injections toWeimeng. The term of the loans is 10 years and Weibo Technology has the right, at its owndiscretion, to shorten or extend the term of the loans if necessary. In our consolidated financialstatements, these loans are eliminated with the capital of Weimeng during consolidation.

Share Transfer Agreements

Each shareholder of Weimeng has granted Weibo Technology an option to purchase his sharesin Weimeng at a purchase price equal to the amount of capital injection. Weibo Technology mayexercise such option at any time until it has acquired all shares of Weimeng, subject toapplicable PRC laws. The options will be effective until the earlier of (i) Weibo Technologyand the shareholders of Weimeng have fully performed their obligations under theseagreements, and (ii) Weibo Technology and the shareholders of Weimeng agree in writing toterminate these agreements.

Loan Repayment Agreements

Each shareholder of Weimeng has agreed with Weibo Technology that the interest-free loansunder the loan agreements shall only be repaid through share transfers. Once the share transfersare completed, the purchase price for the share transfer will be set off against the loanrepayment. These agreements will be effective until the earlier of (i) Weibo Technology and theshareholders of Weimeng have fully performed their obligations under these agreements, and(ii) Weibo Technology and the shareholders of Weimeng agree in writing to terminate theseagreements.

Agreement on Authorization to Exercise Shareholder’s Voting Power

Each shareholder of Weimeng has authorized Weibo Technology to exercise all his votingpower as a shareholder of the applicable VIE on all matters requiring shareholders’ approvalunder PRC laws and regulations and the articles of association of Weimeng, including withoutlimitation appointment of directors, transfer, mortgage or disposal of Weimeng’s assets,transfer of any equity interest in Weimeng, and merger, split, dissolution and liquidation ofWeimeng. The authorizations are irrevocable and will not expire until Weimeng dissolves.


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Share Pledge Agreements

Each shareholder of Weimeng has pledged all of his shares in Weimeng and all other rightsrelevant to his rights in those shares to Weibo Technology as security for his obligations to payoff all debts to Weibo Technology under the loan agreement. In the event of default of suchobligations, Weibo Technology will be entitled to certain rights, including transferring thepledged shares to itself and disposing of the pledged shares through sale or auction. During theterm of the agreements, Weibo Technology is entitled to receive all dividends and distributionspaid on the pledged shares. The pledges will be effective until the earlier of (i) the thirdanniversary of the due date of the last guaranteed debt, (ii) Weimeng and its shareholders havefully performed their obligations under these agreements, and (iii) Weibo Technology consentsto terminate these agreements. We have completed registration of equity pledges with therelevant office of the administration for industry and commerce in accordance with the PRCCivil Code.

Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement and TrademarkLicense Agreement

Weimeng has entered into an exclusive technical services agreement, an exclusive sales agencyagreement and a trademark license agreement with Weibo Technology. Under the exclusivetechnical services agreement, Weibo Technology is engaged to provide technical services forWeimeng’s online advertising and other related businesses. Under the exclusive sales agencyagreement, Weimeng has granted Weibo Technology the exclusive right to distribute, sell andprovide agency services for all the products and services provided by Weimeng. Due to itscontrol over Weimeng, Weibo Technology has the right to determine the service fee to becharged to Weimeng under these agreements by considering, among other things, the technicalcomplexity of the services, the actual cost that may be incurred for providing such services, theoperations of Weimeng, applicable tax rates, planned capital expenditure and businessstrategies. These agreements can only be prematurely terminated by Weibo Technology, andwill not expire until Weimeng dissolves. Under the trademark license agreement, WeiboTechnology has granted Weimeng trademark licenses to use the trademarks held by or licensedto Weibo Technology in specific areas, and Weimeng is obligated to pay license fees to WeiboTechnology. The term of this agreement is one year and is automatically renewed providedthere is no objection from Weibo Technology.

Spousal Consent Letters

Each of the spouses of the shareholders of Weimeng and Weimeng Chuangke, namely YunliLiu, Wei Wang, Wei Zheng and Zenghui Cao, signed the spousal consent letters. Yunli Liu, WeiWang, Wei Zheng and Zenghui Cao collectively hold 99% equity interest in Weimeng. YunliLiu and Wei Wang collectively hold 100% equity interest in Weimeng Chuangke. Pursuant tothe spousal consent letters, each signing spouse unconditionally and irrevocably agreed that thespouse is aware of the abovementioned loan agreements, share transfer agreements, loanrepayment agreements, agreement on authorization to exercise shareholder’s voting power andshare pledge agreements and has read and understood the contractual arrangements. Eachsigning spouse has committed not to make any assertions in connection with the equityinterests of the relevant shareholder’s interest in Weimeng and Weimeng Chuangke, to executeall necessary documents and take all necessary actions to ensure appropriate performance ofthe abovementioned agreements, and, if the spouse obtains any equity interests of Weimeng orWeimeng Chuangke, to be bound by the abovementioned agreements, comply with theobligations thereunder as a shareholder of Weimeng or Weimeng Chuangke and sign a seriesof written documents in substantially the same format and content as the abovementionedagreements.


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Minority Investment in Weimeng

In April 2020, WangTouTongDa (Beijing) Technology Co., Ltd., an entity affiliated withZhongWangTou (Beijing) Technology Co., Ltd., made an investment of RMB10.7 million inWeimeng for 1% of Weimeng’s enlarged registered capital. Such third party minority stakeholder is entitled to customary economic rights in proportion to its equity ownership, andcertain minority shareholder rights such as the right to appoint a director to Weimeng’sthree-member board of directors, and veto rights over certain matters related to contentdecision, and certain future financings of Weimeng.

The third party minority stake holder is not a party to the contractual arrangements that arecurrently in effect among Weimeng, Weibo Technology and Weimeng’s other shareholders. Assuch, despite the fact that we are still able to enjoy economic benefits and exercise effectivecontrol over Weimeng and its subsidiaries, we are not able to purchase or have the third partyminority stake holder pledge its 1% equity interests in Weimeng in the same manner as agreedunder existing contractual arrangements, nor are we granted the authorization of voting rightsover these 1% equity interests. We believe Weibo Technology, our wholly-owned PRCsubsidiary, still controls and is the primary beneficiary of Weimeng as it continues to have acontrolling financial interest in Weimeng pursuant to ASC 810-10-25-38A after the issuance ofsuch 1% equity interests.

Although we have been advised by our PRC counsel, TransAsia Lawyers, that ourarrangements with Weimeng are not in conflict with current PRC laws and regulations, wecannot assure you that we will not be required to restructure our organization and operationsin China to comply with the changing and new PRC laws and regulations. Restructuring of ouroperations may result in disruption to our business. If PRC tax authorities were to determinethat our VIE structure was not done on an arm’s-length basis and therefore constitutesfavorable transfer pricing, they could request Weimeng to adjust its taxable income upward forPRC tax purposes. Such a pricing adjustment may not reduce the tax expenses of WeiboTechnology but could adversely affect us by increasing Weimeng’s tax expenses, which couldsubject Weimeng to late payment fees and other penalties for tax underpayment and/or couldresult in the loss of tax benefits available to Weibo Technology in China. Any of these measuresmay result in adverse tax consequences to us and adversely affect our results of operations.

Confirmations and risks relating to the variable interest entity structure

Our PRC Legal Adviser is of the opinion that:

(a) our current ownership structure, the ownership structure of our PRC subsidiaries and ourVIEs, and the contractual arrangements among our PRC subsidiaries, the VIEs and theirrespective shareholders are in compliance with existing PRC laws, rules and regulations.

(b) each of the contractual arrangements among our PRC subsidiaries, the VIEs and theirrespective shareholders governed by PRC laws and regulations is valid, legal and bindingexcept that the pledge on the shareholders’ equity interests in Weimeng and WeimengChuangke would not be deemed validly created until it is registered with the competentSAMR, and does not and will not violate any applicable PRC laws and regulations or theirrespective articles of association currently in effect; and

(c) each of the contractual arrangements entered into among our PRC subsidiaries, the VIEsand their respective shareholders governed by PRC laws and regulations is not void underthe Civil Code of the PRC.


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Based on the above, our directors believe that the agreements underlying the contractualarrangements as described above that confer significant control and economic benefits from theVIEs on us are enforceable under the relevant laws. Nevertheless, any violations by the VIEor its shareholder of our agreements with them could disrupt our operations or adversely affectour services. See “Risk Factors — Risks Relating to Our Corporate Structure”.

Additionally, we have been advised by our PRC Legal Adviser that there are substantialuncertainties regarding the interpretation and application of current and future PRC Laws.Accordingly, PRC regulatory authorities or courts may take a view that is contrary to theopinion of our PRC Legal Adviser. It is uncertain whether any new PRC laws relating tocontractual arrangements will be adopted, what the Laws would provide. If we or any of theVIEs is found to be in violation of existing or future PRC laws, or fail to obtain or maintainany of the required permits or approvals, the relevant PRC regulatory authority would havebroad discretion to take action in dealing with the violation or failure, in which case we couldbe subject to severe penalties, including being prohibited from continuing our operations orunwinding the contractual arrangements. See “Risk Factors — Risks Relating to Our CorporateStructure” and “Risk Factors — Risks Relating to Doing Business in the People’s Republic ofChina”.

As of the Latest Practicable Date, we had not encountered any interference or encumbrancefrom any PRC regulators in operating our business through our VIEs under the contractualarrangements.

Shareholding Structure

The following diagram illustrates our shareholding structure as at September 30, 2021(excluding 8,700,524 Class A Ordinary Shares issued and reserved for future issuance upon theexercising or vesting of awards granted under our Share Incentive Plans):

1.2% 24.8%

Directors andexecutive officers

as a group(1)

Othershareholders(1)

SINACorporation(1)

44.4%

Ali WB Investment Holding Limited(1)

29.6%

Our Company

Note:

(1) See “Major Shareholders” for further details on the voting rights and the beneficial ownership of our directorsand executive officers as a group, SINA Corporation, Ali WB and other shareholders. Each holder of Class Aordinary shares is entitled to one vote per share and the holder of our Class B shares is entitled to three votesper share on all matters submitted to them for a vote.


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The following diagram illustrates our shareholding structure immediately upon the completionof the Global Offering (assuming all major shareholders’ shareholdings remain unchanged asof the Latest Practicable Date, the Over-allotment Option is not exercised, and no additionalShares are issued under the Share Incentive Plans):

1.1%

Directors andexecutive officers

as a group(1)

Othershareholders(1)

SINACorporation(1)

Our Company

Ali WB Investment Holding Limited(1)

41.0% 28.9% 29.0%

Please refer to the details contained in Note (1) above.

Listing on the Nasdaq Global Selected Market

In April 2014, our company completed the initial public offering and has been listed on theNasdaq Global Selected Market since then. Since the date of our listing on the Nasdaq and upto the Latest Practicable Date, our directors confirm that we had no instances of non-compliance with the rules of the Nasdaq in any material respects and to the best knowledge ofour directors having made all reasonable enquiries, there is no matter that should be broughtto investors’ attention in relation to our compliance record on the Nasdaq.

We believe that the Listing on the Hong Kong Stock Exchange will present us with anopportunity to further expand our investor base and broaden our access to capital markets.


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The information presented in this section, unless otherwise indicated, is derived fromvarious official government publications and other publications, and from the marketresearch report prepared by China Insights Consultancy Limited (“CIC”), which wascommissioned by us. We believe that the information has been derived from appropriatesources such as CIC’s database, publicly available information sources, industry reports,as well as data obtained from surveys and other sources. We believe that we have takenreasonable care in extracting and reproducing such information. We have no reason tobelieve that such information is false or misleading, or that any fact has been omitted thatwould render such information false or misleading. The information from officialgovernment sources has not been independently verified by us, the Joint Sponsors, theJoint Representatives, the Joint Global Coordinators, the Joint Bookrunners, theUnderwriters or any of our or their respective directors, officers, representatives,employees, agents or professional advisers, or any other person or party involved in theGlobal Offering, and no representation is given as to the completeness, accuracy, orfairness of such information. Accordingly, such information should not be unduly reliedupon.

SOURCE OF INFORMATION

CIC was commissioned to conduct research, provide an analysis of, and to produce a report(the “CIC Report”) on, the social platform industry in China, and other related economic data,at a fee of US$95,000. The commissioned report has been prepared by CIC independent of theinfluence of the Company and other interested parties. Except as otherwise noted, all of thedata and forecasts contained in this section are derived from the CIC Report.

CIC is an investment consulting company originally established in Hong Kong. Its servicesinclude industry consulting services, commercial due diligence, strategic consulting, and so on.

CIC undertook both primary and secondary research using a variety of resources. Primaryresearch involved interviewing key industry experts and leading industry participants.Secondary research involved analyzing data from various publicly available data sources,including the National Bureau of Statistics of China, Chinese Government releases, annualreports published by relevant industry participants, industry associations, CIC’s own internaldatabase, etc.

The market projections in the commissioned report are based on the following keyassumptions: (i) that the overall global social, economic, and political environment is expectedto maintain a stable trend over the next decade; (ii) that related key industry drivers are likelyto continue driving growth in China’s social media industry during the forecast period; and (iii)that there is no extreme force majeure or set of industry regulations in which the marketsituation may be affected either dramatically or fundamentally. The reliability of the CICReport may be affected by the accuracy of the foregoing assumptions and factors.

EVOLVEMENT OF SOCIAL PLATFORMS IN CHINA

China has the world’s largest base of internet users, which reached 989.0 million in 2020, withalmost all of its netizens using some form of social platform to communicate and shareinformation on their daily lives, according to the CIC Report. Social platforms are where usersvirtually connect with each other through the creation, sharing, or exchanging of ideas,interests, and other content, often in the form of text, picture, audio, video or other contentformats. Social platforms include social media platforms, social networking platforms, and livestreaming platforms.

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The evolution of social platforms has been fueled by the human impulse to communicate andby the advancements in digital technologies. Social platforms have shifted from desktop tomobile and continued to advance into more diversified and engaging content formats. In recentyears, platforms focusing on short-form video sharing and live streaming have become moreprevalent. With a well-balanced mix of content formats, encompassing text, picture, video, livestreaming, audio and other formats, social platforms are capable of attracting users to createcontent and engage in social interactions.

Driven by the increasing popularity of social platforms, the penetration rate for the socialplatforms, measured by the ratio of social platform users to all mobile users, has already cometo hover near the 100% mark in 2020.

SOCIAL MEDIA PLATFORMS SERVE AN IMPORTANT ROLE IN PEOPLE’S DAILYLIVES

A social media platform is a subset of social platform that allows users to create, discover anddistribute diversified content in a public forum. More people are turning to social mediaplatforms to follow breaking news, discuss hot topics, and browse any content of personalinterest, among other activities. Social media platforms are public in nature and enable everyuser, including celebrity, organization, or ordinary people, to publicly discuss events ofinterests and debate social issues and concerns. At the same time, social media platforms covercomprehensive topics such as news, art, fashion, lifestyle, travel, game and entertainment, etc.

Attributable to the important role social media platforms serve in people’s daily lives, the userbase of social media platforms in China has been expanding at a rapid pace. The combined totaluser base for China’s social media platforms in terms of MAUs increased from 488.9 millionin 2016 to 738.3 million in 2020, representing 74.9% of the total number of mobile internetusers in China in 2020, according to the CIC Report. As the penetration of social mediaplatforms have already reached a relatively high level, the MAUs of social media platforms isanticipated to increase moderately in the coming years at a CAGR of 3.7% from 2020 to 2025to 883.4 million by 2025.

MAJOR TRENDS FOR SOCIAL MEDIA PLATFORMS IN CHINA

The major trends for the social media platforms in China include:

Diversification of content formats

Content made available in different formats is suitable for meeting users’ different preferencesand consumption needs. For example, text is more efficient when distributing breaking newsand presenting thought-provoking content. At the same time, people increasingly enjoyconsuming content in richer and more interesting formats, such as video, which can capturemoments in a real-time, rich multi-sensory and condensed short-form manner. Therefore, thecontinuous diversification of content formats, including text, picture, video and live streaming,is expected to lead to an increase in both content generation and content consumption.

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KOL gaining more influence

Top content creators may often become the authoritative figures on certain topics or areas ofinterests and the opinion leaders among their followers, and therefore creating a considerableamount of influence on their followers. The influence on followers presents significantcommercial potential, which attracts more users to become influencers or KOLs bycontinuously creating high-quality content and engaging with followers. The resources andtools provided by social media platforms are also catalyzing this trend by making it easier fortalented content creators to stand out.

More users from the younger generation

Adoption by younger generation is one of the driving forces behind the growth of social mediaplatforms. In China, many millennials and younger generations of users are increasinglyseeking novel ways to express themselves and connect with other people so as to share theirindividual values and interests. Social media platforms serve as an ideal channel for millennialsand younger generations of users to engage with others, and to develop a sense of communitybased on a wide range of topical categories offered on these platforms. At the same time, asyounger users are relatively more likely to access social media on their mobile devices atgreater frequencies, and often do so over fragmented periods of time, condensed content andshort format of content are therefore expected to gain more popularity among these users.

Prevalence of social e-commerce

Social e-commerce emerges as an important segment of China’s social media platforms, whichreflects a trend for purchasers to share experiences with a broader audience online, as well asa growing appetite for authentic real-world information shared by others virtually. Sociale-commerce, such as influencer driven purchases and live streaming e-commerce, encouragesusers to share their experiences and interact with other purchasers and merchants online. At thesame time, KOLs who seek to monetize their social assets are incentivized to contribute morehigh-quality content for these platforms. As a result, the emergence and increasing prevalenceof social e-commerce is expected to further enrich the content ecosystem of and drive newtraffic to social media platforms, and to create new monetization opportunities accordingly.

TRENDS AND DRIVERS FOR SOCIAL MEDIA ADVERTISING

As social media platforms are gaining more popularity, they are tapping into more monetizationopportunities. Advertising has become the most mature form of monetization for social mediaplatforms, according to the CIC Report. Compared with traditional advertising, social mediaadvertising is more effective in terms of reach, targeting and delivery results for advertisers.

As a result of their greater efficiency, the advertising revenue generated by social mediaplatforms increased from RMB8.3 billion in 2016 to RMB138.6 billion in 2020, representinga CAGR of 102.2%, and is anticipated to further increase to RMB480.7 billion in 2025 at aCAGR of 28.2% during the period from 2020 to 2025.

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Advertising Revenue of Social Media Platforms, China, 2016-2025E

2016

RMB Billions

8.3 13.744.1

94.194.1

138.6

192.6

250.1

318.8

395.5

480.7

2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E0

100100

200200

300300

400400

500500

CAGR: 102.2%

CAGR: 28.2%

Source: CIC Report

Social media advertising is becoming more important as a monetization channel, due to itsability to attract users and retain their attention. The overall market share of social mediaadvertising in the online advertising market is therefore anticipated to keep expanding. Themarket share of social media platforms in the online advertising industry in terms of revenuesexpanded from 2.9% in 2016 to 18.2% in 2020, and is expected to increase even further to26.1% in 2025, according to the CIC Report.

The growth of social media advertising has been fueled by the expansion of user base and anincrease in user engagement of social media platforms as well as innovations in advertising andmarketing solutions. Ongoing advancements in mobile internet infrastructure, such as 5G, areexpected to drive the growth of the user base and user engagement for social media platforms,enabling users to consume and share digital content more efficiently and conveniently. Inaddition, more interactive advertising and marketing solutions are expected to emerge byleveraging big data and AI technologies, so as to further attract wallet shares from advertisers.

The social media advertising market in China is now demonstrating the following key trendsand drivers:

• Preference for targeted advertising solutions. Social media advertising helpsadvertisers more effectively and accurately reach their target customers as well as buildup and improve their brand image as they interact with users. Advertisements on socialmedia platforms enable advertisers to better reach their audience based on factors such asdemographics, gender, and interests. More and more advertisers are therefore planning tospend more of their budgets on social media advertising in the years to come due to itsgreater efficiency, according to the CIC Report.

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• Rise of KOL marketing. KOLs can have a strong influence on audiences’ purchasingdecisions, which reflects the fact that people tend to give more credit to those words orexperiences shared by the people they follow and trust. Advertisers are increasinglywilling to adopt the KOL marketing strategy, which allows them to reach specificaudiences at a relatively low cost while stimulating discussions and sharing in a positivefeedback loop. MCNs also contribute to maximizing the revenue-generating impact andthe overall development of social media advertising, since they facilitate closercooperation among advertisers, KOLs, and social media platforms.

• Demand for integrated marketing solutions. Advertisers are now seeking a full stacksolution that includes branding ads and performance-based ads to help themsimultaneously build brand awareness, generate enhanced interest, advance salesopportunities and inspire customer loyalty. Depending on their budgets and demands,different advertisers may seek to implement a mix of advertising and marketing services,including display ads, in-stream feeds, search ads, KOL content marketing and otherproducts and services. At the same time, advertisers will favor solutions where eachadvertisement is traceable, in terms of, for example, the number of views and clicks, thenumber of clicks leading to sales, and the number of comments or shares, etc., in orderto better evaluate the actual impact of any marketing campaign.

• Innovations in solutions. More innovative advertising and marketing products andservices are expected to emerge in the future, especially in the field of content marketingor KOL marketing. Social media platforms are offering a more diversified array ofadvertising and marketing solutions that use big data and AI technologies, enablingadvertisers to directly and effectively interact and engage with their target audience. Atthe same time, social media platforms are actively building their ecosystem to empowercelebrities, MCNs, and KOLs with marketing capabilities such as content generation toolsand user interaction functions, as well as a diverse selection of advertiser and commercialresources.

KEY SUCCESS FACTORS

The following key success factors affect the performance of social media platforms in theonline social media industry in China.

The ability to expand, retain and energize the user base and increase user engagement tocreate network effects

Social media platforms rely on network effects where user engagement attracts more newusers, which acts as a multiplier in generating activities and traffic on social media platforms.A social media platform that enjoys a large, active and engaged user base is more likely toattract content creators and commercial partners who in turn contribute more content to theplatform in a virtuous cycle. Early entrants in the market generally enjoy the advantage ofstrong brand recognition and large user base, and therefore have more leverage in theirrelationships with advertisers and other customers. Successful social media platforms typicallyhave the ability to continuously launch innovative features and adopt advanced technologies toenlarge their user base, increase user engagement and attract influencers and advertisers to theplatform, while capturing additional commercial opportunities.

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Comprehensive coverage of content formats and categories

Social media platforms with comprehensive content categories and formats, and vibrantcontent ecosystems are better positioned to address the evolving needs of users with differentbackgrounds and interests. A diversified mix of content formats can better match users’preferences in different scenarios. A wider coverage of content categories can attract users witha variety of interests and can therefore increase the scale of the active user base. An engagingcontent ecosystem, powered by comprehensive content formats and categories, is vital for thesuccess of social media platforms to build thriving social scenes bolstered by robustcommunication and the frequent sharing of high-quality content by users.

Sustainable supply of rich, interesting and comprehensive content

A sustainable supply of content will attract users, which is important to the continued successof social media platforms. Social media platforms develop new tools and resources to lower thebarrier and cost of content generation, and plan new community management strategies tofurther increase user activity. The capacity of social media platforms to develop and adopt newtechnologies and new tools to facilitate active user interactions within their ecosystemempowers these platforms to be better positioned to excel among their competitors. In addition,strong relationships with various types of content creators such as KOLs, MCNs, celebrities,and organizations are vitally important for social media platforms if they hope to ensure thesustainable supply of high-quality and interesting content.

The ability to develop innovative and effective advertising technologies and solutions

Social media platforms that can constantly provide innovative and effective advertisingtechnologies and solutions are more likely to be favored by advertisers. The ability to leverageAI and big-data analytics to develop a deeper understanding of individual users is becominggrowingly important. Emerging business models such as KOL marketing and live streaminge-commerce have shown new monetization opportunities. Therefore, a social media platformthat has strong technological capabilities, comprehensive product offerings and a mature userecosystem is better positioned to compete in the market for online social media.

COMPETITIVE LANDSCAPE FOR SOCIAL PLATFORMS

Driven by the increasing popularity of social platforms, the penetration rate for the socialplatforms, measured by the ratio of overall social platform users to all mobile users, hasalready come to hover near the 100% mark in 2020. New user acquisition has been one of thekey challenges that each of the social platforms faces and accordingly, established socialplatforms with a large user base may experience weak growth in user base. In addition toexpanding user base, social platforms mainly leverage the network effect to build theircompetitive moat.

Weibo is one of the top 5 social platforms in China in terms of MAUs and DAUs in June 2021,according to the CIC report.

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Ranking of China’s Social Platforms, June 2021

Ranking PlatformMAUs

(in millions)

1 Platform A(1)

4

3

2 Platform B(2)

Platform C(3)

Weibo

5 Platform D(4)

Platform Type

Social network

Social media

Social network

Social media

Social media

1,251

566

591

506*

645

DAUs(in millions)

813

246

289

293*

377

Source: CIC Report

Notes:

* Representing average MAUs and DAUs for the three months ended June 30, 2021.

(1) Platform A is a social network platform that provides instant messaging services for smart terminals andenables users to send free voice messages, videos, pictures and texts over the network. It is owned by a HongKong-listed company headquartered in Shenzhen, was launched in 2011 and originated from mobile instantmessaging.

(2) Platform B is a social media platform that hosts a variety of short-form videos and enables users to create shortvideos, which often feature music in the background. It is owned by a private company headquartered inBeijing, was launched in 2016 and originated from a variety of short-form videos.

(3) Platform C is a social network platform that provides Internet-based instant messaging services and supportsmultiple functions such as online chat, group chat, video chat, file transfer and online social games. It is ownedby a Hong Kong-listed company headquartered in Shenzhen, was launched in 1999 and originated from PCinstant messaging.

(4) Platform D is a social media platform that hosts a variety of short-form videos and focuses on recording andsharing people’s daily life. It is owned by a Hong Kong-listed company headquartered in Beijing, was launchedin 2011 and originated from a variety of short-form videos.

Weibo offers the most comprehensive coverage of content categories and content creatorsamong social platforms in China, according to the CIC Report. In February 2021, CICcalculated the coverage ratio of multiple content categories and content creators among leadingsocial platforms in China. The types of content creators include government, media, celebrities,sports (basketball, football, and e-sports), and fast-moving consumer goods brands. Ascompared to other social platforms, Weibo covers all selected categories, and has the highestcoverage ratio among leading social platforms in terms of the content categories and contentcreators.

Weibo offers the most comprehensive content formats among social platforms in China,according to the CIC Report. In February 2021, CIC tested the availability of content formatamong leading social platforms. All the six content formats, namely text only, text and image,topic#, audio, video, and live streaming, are available on Weibo, and Weibo has the mostbalanced distribution of different content formats among leading social platforms.

Weibo has the largest celebrity and KOL network among social platforms in China, accordingto the CIC Report. In February 2021, CIC calculated the coverage ratio of a sample of topcelebrities, defined as the persons with the top 50 Baidu search index on the day of February18, 2021, among leading social platforms. As compared to other social platforms, Weibo hasthe highest coverage ratio. In February 2021, CIC calculated the coverage ratio of a sample oftop KOLs among leading social platforms. The sample list was collected from several KOLlists issued by reputable research firms. As compared to other social platforms, Weibo has thehighest coverage ratio.

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COMPETITIVE LANDSCAPE FOR SOCIAL MEDIA PLATFORMS

Those social media platforms with a large active user base and strong marketing capabilitiesare regarded as competent commercial partners to advertisers. Early entrants in the markettypically have well established brand recognition with a large number of loyal users, thereforecreating high entry barriers against newcomers. Advertisers, when deciding which platforms touse for marketing, normally consider key factors such as scale of reach, level of engagement,format availability, and pricing. The MAUs and DAUs of a social media platform generallyreflect the size of its user base and measure the loyalty of users to that platform. With a largeand active user base, social media platforms are better able to attract advertisers who seek toengage directly with their audiences in gaining broad-based and targeted exposure.

Weibo is one of the top 3 social media platforms in China in terms of MAUs and DAUs in June2021, according to the CIC Report. Among the leading social media platforms in China, somefocus on specific content formats such as video and live streaming, while others providecomprehensive content formats to cater to the diverse user needs. Platforms with more diversecontent formats and more vibrant content creation ecosystems are better equipped to addressthe evolving user needs with diverse backgrounds and interests.

Ranking of China’s Social Media Platforms, June 2021

Ranking

1

3

2

4

5

Platform

Platform B(1)

Platform D(2)

Weibo

Platform E(3)

Platform F(4)

MAUs(in millions)

645

566

506*

237*

121

DAUs(in millions)

377

246

293*

63*

40

Total Revenue in 2020 (in US$ billion)

N/A

1.7

9.1

1.8

N/A

Total Advertising Revenue in 2020 (in US$ billion)

N/A

1.5

3.4

0.3

N/A

Source: CIC Report

Notes:

* Representing average MAUs and DAUs for the three months ended June 30, 2021.

(1) Platform B is a social media platform that hosts a variety of short-form videos and enables users to create shortvideos, which often feature music in the background. It is owned by a private company headquartered inBeijing, was launched in 2016 and originated around a variety of short-form videos. CIC is unable to reliablyestimate the total revenue and advertising revenue of Platform B as it is privately owned.

(2) Platform D is a social media platform that hosts a variety of short-form videos and focuses on recording andsharing people’s daily life. It is owned by a Hong Kong-listed company headquartered in Beijing, was launchedin 2011 and originated from a variety of short-form videos.

(3) Platform E is a social media platform that hosts videos on various themes, including anime, music, dance,technology and video games, and enables users to submit, view and add overlaid commentary on videos. It isowned by a U.S. and Hong Kong-dual-listed company headquartered in Shanghai, was launched in 2009 andoriginated from videos of animation, comics and games. The total revenue and advertising revenue of PlatformE were derived from its 2020 financial report upon currency translation at a rate of RMB6.5250 to US$1.0000.

(4) Platform F is a social media platform that enables users to share various consumption experiences andlifestyles, such as information about beauty, sports, travel, hotels and restaurants. It is owned by a privatecompany headquartered in Shanghai, was launched in 2013 and originated from sharing of overseas shoppingexperience. CIC is unable to reliably estimate the total revenue and advertising revenue of Platform F as it isprivately owned.

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In addition, as a social media platform featuring social networking services and providing arich variety of multimedia contents, we are subject to intense competition from providers ofsimilar services, such as social networking platforms and multimedia content platforms withsocial features. We are subject to intense competition from providers of similar services as wellas potentially new types of online services. These services include (i) messengers and othersocial apps and sites, such as Weixin/WeChat, QQ Mobile, Qzone Mobile and Momo; (ii) newsapps and sites, such as those operated by other major internet companies, including Tencent,Bytedance, Baidu, NetEase, Sohu and Phoenix News Media; (iii) multimedia apps (photo,video and live streaming, etc.), such as Douyin/TikTok, Kuaishou, Bilibili, iQiyi, TencentVideo, Youku, Xigua Video, Red (Xiaohongshu), Momo and JOYY. In addition, as a mediaplatform in nature, we also compete with traditional media companies for audiences andcontent. See “Risk factors – If we are unable to compete effectively for user traffic or userengagement, our business and operating results may be materially and adversely affected.”

MAJOR CHALLENGES FACED BY THE SOCIAL PLATFORMS AND SOCIAL MEDIAPLATFORMS IN CHINA

Competition for user acquisition and user engagement

Driven by the increasing popularity of social platforms, the penetration rate for the socialplatforms, measured by the ratio of overall social platform users to all mobile users, hasalready come to hover near the 100% mark in 2020. Currently, almost every mobile user usessome forms of social platform to stay current or connect with others. As a result, new useracquisition has been one of the key challenges that each of the social platforms faces andaccordingly, established social platforms with a large user base may experience weak growthin user base. In addition to expanding user base, social platforms mainly leverage the networkeffect to build their competitive moat. Therefore, social platforms and social media platformsneed to devote significant resources to retain existing users and content creators, and improvethe quality and diversity of content ecosystems, such as content formats and categories, inorder to continuously attract and engage users and boost their time spent. See “Risk Factors –Risks Relating to Our Business – If we fail to grow our active user base, or if user engagementon our platform declines, our business, financial condition and operating results may bematerially and adversely affected.,” “Risk Factors – Risks Relating to Our Business – If ourusers and platform partners do not continue to contribute content or their contributions are notvaluable to other users, we may experience a decline in user traffic and user engagement.,” and“Risk Factors – Risks Relating to Our Business – If we are unable to compete effectively foruser traffic or user engagement, our business and operating results may be materially andadversely affected.”

In recent years, social platforms are exploring and developing new monetization opportunitiessuch as KOL marketing, live streaming e-commerce and other types of social e-commerce.However, as their business models evolve, social platforms may influence consumers’online-shopping habits since certain users may shift to social platforms from other types ofe-commerce platforms. As a result, such exploration of new monetization models may subjectsocial platforms to competition from other types of online businesses or industries.

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Technology

Social media platforms that can constantly provide innovative and effective advertisingtechnologies and solutions are more likely to be favored by advertisers. More innovativeadvertising and marketing products and services are expected to emerge in the future,especially in the field of content marketing or KOL marketing. Therefore, social mediaplatforms need to continuously enhance their technology capabilities to capitalize on the latesttrends to compete in the market for online social media. Furthermore, technology infrastructureis critical to providing users, customers and platform partners access to social media platform,particularly during major events when activities on the platforms increase substantially. Asocial media platform must continue to upgrade and expand its technology infrastructure tokeep pace with the growth of its business and to ensure that technical difficulties do not detractfrom user experience or deter new users, customers or platform partners from accessing itsplatform. See “Risk Factors – Risks Relating to Our Business – We generate a substantialmajority of our revenues from online advertising and marketing services. If we fail to generatesustainable revenue and profit through our advertising and marketing services, our result ofoperations could be materially and adversely affected.,” “Risk Factors – Risks Relating to OurBusiness – User growth and engagement depend upon effective interoperation with operatingsystems, networks, devices, web browsers and standards that we do not control.,” and “RiskFactors – Risks Relating to Our Business – Our business and operating results may be harmedby service disruptions, or by our failure to timely and effectively scale and adapt our existingtechnology and infrastructure.”

Regulations

The PRC government has, in recent years, heightened its oversight over various aspects of theoperation of social platforms and social media platforms as well as the provision of onlinecontent in China in certain areas, including but not limited to, cybersecurity, protection ofpersonal information, review of illegal and inappropriate content, and real-name authenticationon live broadcasting businesses and online mobile games and etc. Internet information serviceproviders are required to ensure that the large amount of content available on their platformsand the operation and services fully comply with relevant PRC laws and regulations. Socialmedia platforms are also required to monitor the advertising content shown on their platformsto ensure that such content is true and accurate and in compliance with relevant PRC laws andregulations. Due to these intensified laws and regulations, social platforms may be severelyaffected in the short term since some advertisers may no longer be able to conduct marketingactivities or display advertisements on social platforms. As a result, social platforms may needto invest additional resources to continuously develop new clients. See “Risk Factors – RisksRelating to Our Business – Advertisements shown on our platform may subject us to penaltiesand other administrative actions.,” “Risk Factors – Risks Relating to Our Business – Privacyconcerns relating to our products and services and the use of user information could damageour reputation, deter current and potential users and customers from using Weibo andnegatively impact our business.,” and “Risk Factors – Risks Relating to Our Business – Usermisconduct and inappropriate content may adversely impact our brand image, business andresults of operations, and we may be held liable for information or content displayed on,retrieved from or linked to our app or website or distributed to our users.”

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OVERVIEW

Our Mission

Our mission is to empower people to discover the broader world and be heard publicly.

Who We Are

Weibo is a leading social media platform in China for people to create, discover and distributecontent. By providing a simple and inspirational way for people and organizations in China andthe global Chinese communities to publicly express themselves in real time, interact withothers on a platform with vast scale and stay connected with the world, Weibo has had aprofound social impact in China. Launched in 2009, Weibo has been committed to enablingfaster, easier, and richer connection among people and has become an integral part of many ofWeibo users’ daily lives.

Leveraging the early-mover advantage and the accumulated know-hows and insights in thesocial media industry, Weibo has amassed a large user base in China and in Chinesecommunities in more than 190 countries around the world. In June 2021, Weibo had 566million MAUs and 246 million average DAUs. Weibo is one of the top 10 mobile apps and oneof the top 3 social media platforms in China in terms of MAUs and DAUs in June 2021,according to the CIC Report.

Weibo has transformed the way people express themselves and interact with others in thepublic internet space. Any user can create and post a feed and attach multimedia or long-formcontent. User relationships on Weibo may be asymmetric, and any user can follow any otheruser and add comments to a feed while reposting. As of June 30, 2021, Weibo had 318 billion“follow” relationships existing on its platform. This simple, asymmetric, and distributed natureof Weibo allows an original feed to become a live viral conversation stream.

Weibo serves a wide range of users including ordinary people, celebrities, key opinion leaders(“KOLs”), and other public figures or influencers, as well as media outlets, businesses,government agencies, charities, and other organizations, making it a microcosm of Chinesesociety. According to the CIC Report, Weibo has the largest celebrity and KOL network inChina. As of June 30, 2021, there are 4.4 million verified accounts, such as celebrities, KOLs,enterprise partners, and media outlets on Weibo. As a leading social media, Weibo allowspeople in China and the global Chinese communities to be heard publicly and exposed to therich ideas, cultures, and experiences in a broader world. In June 2021, Weibo had 41.9 millionmonthly active content creators, generating original posts for public self-expression. In June2021, top content creators on Weibo platform reached 2.3 million, representing a CAGR of24% from June 2019.

Weibo offers the most comprehensive content formats among social platforms in China,according to the CIC Report. Weibo users can create, discover, consume and share variousformats of content, including text, photo, video, live streaming, audio and topic, etc. on Weiboplatform. By aggregating various media formats, Weibo platform allows content creators tohave more diverse choices to create content in their most desirable ways, so that more enrichedcontent could be generated and distributed across the platform. Weibo is also well positionedto capture the market trends in media formats transformation. To capitalize on the mega trendof video, Weibo has launched a series of innovative initiatives to improve its video productofferings and to empower and attract more video content creators to its platform. As a result,the average number of daily video viewers grew at a CAGR of 20% from June 2019 to June2021.

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To support the diverse content offerings, Weibo also has the most comprehensive coverage ofcontent categories and content creators among social platforms in China, according to the CICReport. In June 2021, Weibo had 46 content verticals, such as celebrities and entertainment,humor, media, variety shows and TV programs, fashion, cosmetics, finance and games. Amongthese content verticals, 28 of them each has over 10 billion monthly views in June 2021. Thediversified content offerings on Weibo platform cater to the evolving and broad interests ofWeibo users and cultivate a more vibrant ecosystem on Weibo platform.

Foundation of Our Platform

Weibo provides a compelling and efficient way for people to discover what is happening in theworld and engage in public social conversations. By combining the following five coreattributes at scale, Weibo continues its evolution for public self-expression, contentaggregation and distribution.

Public. Weibo’s content is open to any user. User relationships on Weibo may be asymmetric:any user can follow any other user and add comments to a feed while reposting. Thisasymmetric feature allows Weibo to address users’ differentiated social needs and makes it anideal public forum of choice for general users, public figures and organizations to participatein trending public conversations and aggregate different opinions on public events.

Real-time. Content goes live on Weibo, from ordinary people at the scene of a headline event,from public figures who have a personal announcement to make, and from businesses,government agencies and other organizations that want direct access to a public audience. Ourplatform promotes a high velocity of information exchange that allows our users to create anddistribute and receive content faster than other forms of media or social platforms.

Viral. Weibo allows content to be easily and virally distributed on its platform. By clicking onthe Repost button, users can easily repost feeds from other users. The asymmetric nature of ourplatform, together with our continuous efforts in introducing innovative features includingtrends and topic products, allows feeds to reach users several degrees of followings away,making trendy content virally distributed and generated with an enormous amount of views onWeibo’s platform.

Comprehensive. Weibo offers the most comprehensive content formats among social platformsin China, according to the CIC Report. Weibo aggregates diverse media formats, including text,photo, video, live streaming, audio and topic, etc. This allows content creators on Weibo tohave more options to create and distribute content in their most desirable ways.

Social. Social engagement on Weibo comes in many forms, such as Likes, Comments andReposts on a feed, or participation in topic discussion. Over the years, Weibo has observedstrong growth of social interactions on its platform and cultivated strong network effect as anearly mover in the social sector.

Our Value Propositions

Our platform has unique value propositions for our users, content creators and advertising andmarketing customers. Our collective relationship with them is crucial to the continued strengthand value of our overall platform.

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To users

• Express and share

� We provide an unprecedented experience for people in China and the global Chinesecommunities to be able to publicly express themselves and share their life moments,opinions and content in real time on a platform with a vast scale.

• Discover rich content and diversified opinions

� Weibo is where people come to discover and learn more about what is going on withthe people, organizations and topics that interest them, as well as their diversifiedopinions.

• Stay current and connected

� Users come to Weibo to stay current on the latest trends and events and connect withother users who share similar interests.

• Make a social impact

� Weibo helps people come together to realize common goals, and to accomplishthings that they could not accomplish on their own.

To content creators

• Build up fan base and social assets

� We help the content creators on our platform to engage and interact with theirfollowers and build up their social assets to create social value and monetizationopportunities. The top content creators, such as celebrities and KOLs, regularlyinteract with their followers, and among each other for topics of the same intereston Weibo. This type of interaction is unique to our platform.

• Monetization

� We are committed to creating and enhancing monetization opportunities for contentcreators through diversified channels such as advertisement, e-commerce and livestreaming.

To advertising and marketing customers

• Broad and targeted reach

� We are an early mover of social advertising in China. We provide our customers withsocial marketing solutions based on our social interest graph recommendationengine that help them reach and engage with their target audience.

• Full spectrum of tailored solutions

� We provide a full spectrum of innovative and tailored advertising and marketingsolutions ranging from brand awareness to interest generation, sales conversion andloyalty marketing to cater to the diverse marketing demands of our customers.

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• Viral effect

� Weibo feeds and trends, whether promoted or organic, have the potential to go viraldue to the public and distributed nature of our platform. This provides our customerswith additional upside value to increase the social elements of their advertising.

Our Commitment to a Better Society

By providing a simple and inspirational way for people and organizations in China and theglobal Chinese communities to publicly express themselves in real time, interact with otherson a global platform with a vast scale and stay connected with the world, Weibo has had aprofound social impact in China. Weibo is committed to living up to its social responsibilitiesand to facilitating meaningful public affairs dialogue. Media outlets use Weibo as a source ofinformation and a distribution channel for their headline news. Government agencies andofficials use Weibo as an important official communication channel for disseminating timelyinformation and gauging public opinion to improve public services. Individuals and charitiesuse Weibo to make the world a better place by launching charitable projects, seeking donationsand volunteers and leveraging the celebrities and organizations on Weibo to boost their socialinfluence.

As the COVID-19 pandemic unfolded across the country in 2020, Weibo released measures topromote public conversations and to help people find reliable and useful information.Governments, experts, and renowned media outlets played pivotal public service roles, andused their Weibo accounts to reach people with right and timely information. Weibo isproactively seeking ways to amplify this authoritative, official content about the pandemic onits platform by recommending these feeds to show at the top of the flow of users’ feeds anddiscovery zone. In the first quarter of 2020, over 370 million users viewed pandemic relatedcontent while the number of daily views of pandemic related content exceeded 12 billion. Toensure that the users can access information about the pandemic from reliable sources, Weibohad verified over 1,600 new accounts of medical experts, medical staff, patients and theirfamily members, and helped them accumulate approximately 150 million followers inaggregate on Weibo.

We launched Weibo Charity as early as 2012 to allow users to initiate charity projects byposting messages on our platform. Charity organizations and individuals with verified accountscan raise funds and recruit volunteers for public services on Weibo Charity. We leverage thecelebrities and KOLs on our platform and work with them to further raise awareness ofcharitable causes. Weibo Charity has further enriched our content offerings and magnifiedWeibo’s positive impact on the society.

Our Scale and Financial Performance

We began monetization on our platform in 2012, and we have since experienced solid revenuegrowth and margin expansion. Our revenues increased from US$1,718.5 million in 2018 toUS$1,766.9 million in 2019 but slightly decreased to US$1,689.9 million in 2020 mainly dueto the negative impact and uncertainties brought forth by the COVID-19 pandemic. Ourrevenue’s year-on-year growth rate recovered to 10% in the fourth quarter of 2020 and furtherincreased to 42% in the first quarter and 48% in the second quarter of 2021, as the COVID-19pandemic was gradually contained in China and the advertising demand recovered accordingly.

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We generate revenues primarily from customers who purchase advertising and marketingservices, and, to a lesser extent, from fee-based revenues, such as VIP membership. Revenuesgenerated from advertising and marketing services accounted for 88% of our total revenues in2020 and 86% of our total revenues in the six months ended June 30, 2021. We had incomefrom operations of US$609.3 million in 2018, US$597.6 million in 2019 and US$506.8 millionin 2020. Our income from operations increased from US$164.2 million in the six months endedJune 30, 2020 to US$301.8 million for the same period in 2021.

The following diagram illustrates the metrics that we use to measure our scale and userengagement.

566mmMAUs1

246mmAverage DAUs1

15.7bnMonthly Social

Interactions2

20%CAGR of Average Number

of Daily Video Viewers

from June 2019 to June

2021

Users

Content

US$1.7bnTotal Revenue in 2020

30.0%Operating Margin5 in 2020

US$507mmOperating Income4 in 2020

Monetization

41.9mmMonthly Active

Content Creators1

4.4mmVerified Accounts

Including Celebrities,

KOLs, Enterprises, and

Media Outlets3

Notes:

(1) In June 2021.

(2) In June 2021, social interactions include the activities of Like, Comment, Repost and Follow.

(3) As of June 30, 2021.

(4) Income from operations.

(5) Ratio of income from operations to total revenues.

OUR STRENGTHS

We believe that the following competitive strengths contribute to our success and differentiateus from our peers.

Pioneer and Leader in Social Media Industry in China

We pioneered China’s social media industry when we launched in 2009 as one of the earliestsocial media platforms (providing microblogging service) in China, according to the CICreport. Throughout the years, we led the development of and innovation in the industry,according to the CIC report. For instance, Weibo is an early mover and key contributor to the“Internet KOL Economy,” which refers to all activities relating to the monetization of theKOLs’ influence and impact on their fans and social community. We took a unique approach

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towards information feeds, where our content distribution is primarily based on socialrelationship supplemented by our interest-based recommendation engine. Leveraging ourearly-mover advantage and our continuous innovations, we have built a high entry barrier inthe social media industry in China and developed deep user insights that will continue to helpus enhance our products and services.

We are one of the top 3 social media platforms in China in terms of both MAUs and DAUs inJune 2021, according to the CIC Report. Our user base has grown rapidly since our inceptionand reached 566 million MAUs and 246 million average DAUs in June 2021.

As we are the destination of choice where people create, distribute and discover high-qualitycontent of various interests, Weibo has become a unique social media platform with profoundsocial impact in China. Of more than 100,000 Hot Searches generated on Weibo in 2020,around 40% of the Hot Searches were about public events or social affairs, according to theCIC Report. Weibo proactively sought ways to amplify the authoritative, official content aboutthe COVID-19 pandemic on its platform. In the first quarter of 2020, over 370 million usersviewed pandemic related content while the daily views of pandemic related content exceeded12 billion. “Poverty alleviation” related content has generated more than 3,000 topics and over30 billion views on Weibo’s platform since 2018, according to the CIC Report. By raisingawareness to countless social events, Weibo is now more than a social media platform forcontent distribution. It is playing an indispensable role in promoting public conversions andhelping people find real-time and reliable information, and therefore, has made a profoundsocial impact on the Chinese society.

Robust Ecosystem with Powerful Network Effects

We connect users, content creators and customers in a robust, self-reinforcing ecosystem thatoffers strong value proposition to each participant.

Our large base of content creators acts as a trendsetter for the user base as a whole. There are4.4 million verified accounts, such as KOLs, influencers, enterprise partners, and media outletson Weibo as of June 30, 2021. We empower content creators to build up and engage with theirfan base and monetize their social assets on Weibo within our ecosystem through diversemonetization methods such as KOL e-commerce, advertising services, etc. Our content creatorsare therefore motivated to create and distribute more high quality content on our platform,engage with our large base of users in public conversions on our platform, which helps Weiboincur relatively low content costs and achieve higher operating leverage. Our high qualitycontent in turn attracts more customers to promote their products on Weibo through our broadrange of innovative advertising services. Many KOLs, MCNs and other users also becomecustomers in order to further build their fan base and brand and to sell their products andservices.

We benefit from strong network effects where more users and engagement on Weiboencourages more content creators to share content and capture monetization opportunities onits platform, which attracts more customers with higher advertising efficiency. Weibo’secosystem participants are incentivized and rewarded in a sustainable way, resulting in avirtuous and self-reinforcing cycle of value creation and raises significant entry barriers forpotential competitors.

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Large, Diverse and Engaged User Base

Since our inception in 2009, we have amassed a large user base. Weibo had 566 million MAUsand 246 million average DAUs in June 2021.

We have demonstrated our proven ability to appeal to younger generations who have a strongneed for public conversations and interest-based content consumption. In June 2021, over 75%of our identified MAUs belonged to Generation Z, i.e., the generation that was born in or after1990, based on our data analytical results. In addition, our success in expanding into lower-tiercities in China has strengthened the growth of our ecosystem. In June 2021, over 85% of ouridentified MAUs lived in non-tier-1 cities (tier-1 cities include Beijing, Shanghai, Guangzhouand Shenzhen) in China or in overseas cities, based on our data analytical results. Our userdemographics and geographical reach are attractive to customers and KOLs who seek to reacha younger and wider audience, which reinforces the virtuous cycle of generating high-qualitycontent.

In addition to our large and diverse user base, there are also significant connections andinteractions among users on our platform. Weibo’s ratio of average DAUs to MAUs remainsas high as 43% to 45% during the Track Record Period. As of June 30, 2021, we had 318 billion“follow” relationship existing on the platform, demonstrating strong network effect and ourcompetitive moat in the social media industry. In June 2021, our users generated 15.7 billionmonthly social interactions on our platform, including the activities of Like, Comment, Repostand Follow, demonstrating users’ high engagement and stickiness to our platform.

Ever-Growing Supply of Rich and Comprehensive Content Offerings

We have built a comprehensive and vibrant content ecosystem that is continuously growingwith the evolving interests of our users.

Weibo offers the most comprehensive content formats among social platforms in China,according to the CIC Report. Starting from a social media platform primarily focusing on textand photo, Weibo has been rolling out new formats to meet users’ evolving demands. Now,Weibo users can create, discover, consume and share content of all formats, including text,photo, video, live streaming, audio and topic. In addition, we offer the most comprehensivecoverage of content categories among social platforms in China, according to the CIC Report.In June 2021, Weibo had 46 content verticals, such as celebrities and entertainment, humor,media, variety shows and TV programs, fashion, cosmetics, finance and games. Among thesecontent verticals, 28 of them each has over 10 billion monthly view counts.

To capture the growing trend of short video and to cater to the users’ shifting consumptionpreference towards short video, we have continuously improved the quality, diversity andrelevance of video content offerings on our platform by improving and launching new productsand features and scaling up the video content generation among top content creators. Welaunched Video Account program in the second half of 2020 to incentivize Weibo’s top contentcreators shift towards video creation with our traffic support. As of June 30, 2021, we had over10 million content creators participating in the Weibo Video Account program, among whichover 30,000 content creators had over 1 million followers. We also focus on strengthening theeffective distribution of video content in information feeds and video community to boostvideo content consumption, drive users’ engagement and improve the platform’s video contentecosystem.

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We attract a large number of talented content creators who remain highly engaged and activeon our platform. In June 2021, Weibo had 41.9 million monthly active content creators,generating original posts for public self-expression. Furthermore, according to the CIC Report,Weibo has the largest celebrity and KOL network in China. In June 2021, top content creatorson Weibo reached 2.3 million, representing a CAGR of 24% from June 2019. As we keepimplementing our strategy to increase the engagement for content creators to reach a broaderaudience through the video format, an increasing number of content creators are incorporatingvideos in their content creation and distribution on Weibo’s platform.

Our comprehensive content formats, diversified content offerings and distribution, as well asour large base of talented content creators cultivate a vibrant content ecosystem, which enablesus to become the go-to social media platform for our users to find diverse content that matchestheir interests, and for content creators to fully showcase their talent.

Proven and Continuous Growth in Monetization

Starting monetization as early as in 2012, we have since experienced solid revenue growth withmargin expansion as our revenues grew at CAGR of 26.7% from 2016 to 2020, and ouroperating margin improved from 21.5% in 2016 to 30.0% in 2020. We primarily generaterevenues from the provision of advertising and marketing services. In 2020, our revenuesreached US$1,689.9 million, with US$1,486.2 million advertising and marketing revenues. Inthe six months ended June 30, 2021, our revenues reached US$1,033.4 million, with US$892.3million advertising and marketing revenues.

We have constantly rolled out new and innovative advertising and marketing solutions thatwere pioneered in the digital advertising market. We are an early mover in launching native adsproduct that allow advertisers to communicate in a similar format as organic feeds andReal-time Bidding System for information feeds in 2013, the first in China to offer promotedtrends and search advertising products in 2014, and an early mover and leading player of KOLmarketing solutions in China according to the CIC Report. Leveraging our large user base, andcelebrities and KOLs’ influence on Weibo’s platform, our customers are enabled to amplifytheir visibility and reach of their original marketing campaign on the platform.

To capture the growing trend of video consumption, we have continuously enriched andoptimized our video advertising offerings under different video consumption scenarios todeliver better advertising formats and conversion results. To adapt to video contentconsumption preferences by users, we also rolled out the Watch Plus Product model in 2020,where the promoted product is embedded beneath the user interface of video, so that theviewers can conveniently locate the merchandise and make purchases.

We offer a full spectrum of advertising and marketing solutions ranging from brand awarenessto interest generation, sales conversion and loyalty marketing that cater to the diverse needs ofcustomers. For instance, for brand customers, our integrated branding plus performancemarketing solutions leverage our unique strength in hot trends, celebrity and KOL marketingand delivery better advertising efficiency. For performance-driven customers, we constantlyrefine existing products and launch innovative products, such as upgrading Super FST, thereal-time bidding ad system and introducing video ad products, to improve the ad placementefficiency and return on investment for customers.

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We leverage our advanced artificial intelligence and data insights to optimize the efficiency ofour advertising and marketing products. Our technology and data is constantly enhanced byiteration through our data insights accumulated over our 12 years of operations and from ourlarge and engaging user base.

Cutting-Edge Technological Capabilities and Scalable Infrastructure

Weibo’s platform is based on a scalable infrastructure built from our innovative and proprietarytechnologies. These systems enable Weibo to deliver the best-in-class experience for users,content creators and customers while distributing huge amount of message, including text,photo, video, live streaming, audio and topics, in real time. As of June 30, 2021, we had a teamof 2,770 product development personnel dedicated to technology, data and productdevelopment functions. Our product development team is fully involved in all criticaloperational areas, with an in-depth understanding of our users’ needs.

Our industry-pioneering social interest graph, or SIG, recommendation engine leverages ourcomprehensive database of users’ social interest graphs, based on users’ engagement actions onour platform, such as Post, Repost, Comment, Like and Follow, and social relationships. TheSIG recommendation engine allows us to push the content that the users may find morerelevant and interesting, so as to increase user loyalty. We utilize machine learningtechnologies to semantically understand videos uploaded to our platform, whereby we use thisinformation to accelerate content review of the videos and distribution of the videos on ourplatform. For example, to improve the user experience for those users we have reactivatedthrough channel investment and hot events, we leverage the SIG recommendation engine toenhance the quality of our content offerings.

Our proprietary hybrid cloud platform can spot hot topics within seconds, automatically andspeedily expand its cloud servers within minutes, and support millions of user visits occurringevery second. Our distributed storage model allows us to efficiently manage billions of piecesof data while storing data on ordinary servers that are easily scalable, and our geographicallydistributed architecture enables fast access for users across the country.

Visionary and Experienced Management Team with A Proven Track Record

We have a visionary and experienced management team with strong execution and managementcapabilities and extensive industry knowledge. Mr. Charles Chao has served as our Chairmanof the board of directors since our inception and has been SINA’s Chief Executive Officer sinceMay 2006. Mr. Gaofei Wang has served as our CEO since 2014 and possesses deepentrepreneurship and extensive managerial experience. He has been actively involved in theproduct and business development of Weibo since its inception.

Other members of our senior management team have extensive and complementary experiencesin a wide range of fields, covering technology, internet, entertainment, finance and operations.Our senior management team is entrepreneurial and has constantly launched innovativeproducts and features that pioneered the social media industry in China. Together with Mr.Gaofei Wang, our senior management team led our company to grow Weibo’s user base from144 million MAU at our IPO in 2014 to 566 million MAU in June 2021, and will continue toexecute our growth strategies to achieve a higher level of success.

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OUR STRATEGIES

We intend to achieve our mission and further solidify our unique position by pursuing thefollowing strategies.

Grow Our User Base and Increase User Engagement

User scale and user engagement are fundamental to our business. Leveraging our socialplatform positioning, we intend to focus on growing our user base and increasing userengagement by continuously improving product functionalities, enriching the contentecosystem and executing effective channel marketing strategies.

We plan to continue to optimize our user products and enhance our recommendationcapabilities to deliver the most relevant, timely and interesting contents to users. We willcontinue to expand our cooperation with top content creators to contribute more high qualitycontents to our platform and enrich our content ecosystem. We also plan to continuouslydeepen our collaboration with smartphone manufacturers and programmatic buying partners,so as to improve the user acquisition efficiency and enhance user engagement. For instance, inaddition to our organic growth in user base, we plan to expand and deepen our cooperation withsmartphone manufacturers to pre-install our Weibo application on new smartphones.Leveraging our strengths in public conversation and social distribution, we will furtherenhance our competitive advantage in hot trends to attract new and dormant users throughcontent recommendation, and improve user frequency and engagement on our platform.

Further Expand and Improve Our Content Ecosystem

When more and more content creators can thrive on our platform by contributing ever-growingdiversified content, we believe our overall user growth, user engagement and commercial valueshall flourish as well. Therefore, we plan to further nurture our content ecosystem for our users,customers and content creators.

Enrich content offerings. We plan to enrich the content offerings on our platform by attractingmore content creators and KOLs and cooperating with more MCNs. We will help contentcreators to attract more users through improved content search capability, traffic allocation,and SIG recommendation engine. We also plan to deepen the scale and consumption of ourcontent verticals.

Empower content creators. Leveraging Weibo’s leading position in the social media industryin China, we plan to continuously empower content creators to boost fan engagement and openup monetization opportunities, so as to create a self-reinforcing virtuous cycle for the thrivingof our content creators. We will also improve operational efficiency, content quality andplatform’s sustainability, which will in turn stimulate content generation and content creators’interaction with fans.

Promote video content. We will continue enriching the video content offerings by promotingthe supply and consumption of video content on our platform. We plan to encourage more topcontent creators to adopt video as their content creation format. Meanwhile, we will focus onthe operation of video content in selected verticals, such as TV series, variety shows andgames, to cultivate users’ consumption preference for the differentiated content on ourplatform, and to further boost users’ loyalty to our platform. In addition, we will introduceinnovative features to improve our video recommendation capability so as to recommend morerelevant videos to each different user.

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Enhance Monetization Capabilities

We believe we offer a unique value proposition to our customers, as our full spectrumadvertising and marketing solutions empower them to reach broad and targeted audiences withviral effect. We will further improve our existing advertising and marketing solutions anddevelop new solutions to fulfil customers’ demands. We will also diversify our revenue streamsthrough exploring monetization opportunities in non-advertising areas.

Expand our advertising and marketing customer base. We believe that continuousimprovements in our advertising and marketing solutions will help us expand the customerbase. We plan to broaden our coverage of and penetrate businesses of different scales indifferent industry sectors to attract new customers from these sectors. We believe the vast andgrowing number of domestic and emerging brands throughout China present a significantopportunity for our advertising and marketing business.

Improve advertising and marketing solutions. We plan to further reinforce our unique valueproposition for customers to capture higher ad wallet share. We will improve our existingadvertising and marketing solutions and develop new solutions tailored to various contentformats, including videos and live streaming. We intend to improve our SIG abilities toenhance the accuracy and relevance of our advertising.

Diversifying our monetization channels. We plan to further diversify our revenue streamsthrough exploring monetization opportunities in value-added services and offerings, such as amembership service, online games, live streaming and social e-commerce.

Selectively Pursue Strategic Alliances, Investments and Acquisitions

We have adopted a very disciplined approach for investments and acquisitions in the past. Asa part of our growth strategy, we have formed strategic alliances and partnerships andcompleted investments and acquisitions in recent years that are synergistic and complementaryto Weibo’s ecosystem.

We will continue to selectively pursue collaborations, investments and acquisitions tocomplement our current businesses and enhance our growth potentials.

PRODUCTS AND SERVICES

Our product categories include those for users, advertising and marketing customers andplatform partners.

Products for Users

Our product development approach is centered on building simple and useful tools to enableour users to access Weibo to discover, create, and distribute content and interact with others onour platform in real time. We employ a “mobile first” philosophy and have designed ourplatform around the capabilities of mobile devices. We introduced the first generation of theWeibo mobile app in the first quarter of 2010. Our app is compatible with all major mobileoperating systems, including Android, iOS and others, and is accessible through mobile apps,mobile websites, computer apps and computer websites. Users can watch videos, read articles,discover hot information feeds and interest-based topics after installing the Weibo app or whenvisiting Weibo websites. Users registered with a Weibo account can set up their accountinformation, post feeds, upload short videos and post articles. Users can also interact among

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themselves on our platform by following, liking, reposting, adding comments, sending privatemessages, and participating in topic discussions and group chats. In addition, we officiallylaunched a new product named Oasis in the fourth quarter of 2019, an interest-based socialcommunity product for users to share lifestyle related content in the form of photos and shortvideos.

Starting from a social media platform primarily focusing on text and photo, Weibo has beenrolling out new formats, such as video and live streaming, to meet users’ evolving demands.With its continuous efforts in capitalizing on new content formats, Weibo now offers the mostcomprehensive content format and coverage of content categories and content creators amongsocial platforms in China, according to the CIC Report. Weibo plans to leverage its socialattributes and extensive content coverage to attract more users to use Weibo for video postingand consumption. To further improve its competitiveness in video offering, Weibo will promoteits Video Account program among its users and accelerate the videolization for Weibo’s contentcreators. Weibo believes the popularity of the emerging content formats, such as video and livestreaming, will further diversify and enhance its content offerings, which will in turn attractmore users, forming a thriving self-reinforcing content ecosystem.

Weibo serves a wide range of users including ordinary people, celebrities, KOLs, and otherpublic figures or influencers, as well as media outlets, businesses, government agencies,charities, and other organizations. Weibo has collaborated with industry leading multi-channelnetworks (MCNs) to provide high-quality content that spans across 46 content verticals in June2021.

Discovery. We offer the following products to help users discover content on our platform:

• Information Feed. We organize and present users with information feed in different forms.Among all our offerings, the two most important and most frequently browsed feeds arerelationship-based information feed (follow model) and interest-based information feed,both of which reside on users’ home page.

Each user’s relationship-based information feed displays a flow of feeds posted by thatuser and other users who he or she has opted to follow. Since Weibo allows users to followother users without establishing a reciprocal relationship, users are able to personalizewho they follow based on their interests. In other words, users can as easily followcelebrities and strangers as they follow friends and acquaintances. To improve userexperience, the relationship-based information feed has evolved from a chronologicaltimeline to one with multiple dimensions, including content relevancy, content quality,user interest, user engagement, user relationships, etc. Users can also customize theirinformation feed by classifying followed accounts into different groups, e.g. friends,co-workers, celebrities, finance, sports and view feeds from each group separately.

Interest-based information feeds are timelines of feeds recommended by Weibo based ondifferent interest-based themes. The hot information feed is an example of an interested-based information feed that we present on users’ homepages to recommend feeds onrecent popular topics, breaking news and feeds generated through user’s individualinterest. We also organize other interest-based information feeds on various themes forusers to further explore the topics in which they are interested. For example, the videoinformation feed, which is a timeline of recommended videos that appears after a userfinishes watching a short video; and the profile information feed, which can be found ona user’s individual page and shows all of the feeds shared by that user.

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We offer our advertising and marketing customers promoted feeds to amplify theirvisibility and the reach of their original marketing campaign, thus achieve earned mediaon our platform. See also “— Products for Advertising and Marketing Customers —Promoted Marketing — Promoted Feeds.”

• Search. Our search function allows users to search our large content pool for users, feeds,videos, articles, pictures, etc. based on keywords (hashtag), topics or recent populartrending. Through our powerful search function, users can efficiently acquire the mostrelevant information they seek in real time.

We offer our advertising and marketing customers promoted search. See also “— Productsfor Advertising and Marketing Customers — Promoted Trends and Search.”

• Discovery Zone. The discovery zone is the interface aggregating Search, Channels,Trends and information feeds for users to conveniently access a variety of content andservices based on the user’s current location and topical interests such as games, moviereviews, ticket purchasing, online music streaming, online shopping and live streaming.Users can find content related to their interests and interact with others of the sameinterests in the discovery zone.

We offer social display advertisements that appear on the discovery zone banner. See “—Products for Advertising and Marketing Customers — Social Display Advertisements.”

• Channels. Channels gather users based on particular interests or locations and encourageuser engagement through interaction within each channel. Users can visit these Channelsto find rich content on topics of interest and interact with other users of similar interest.For example, users can watch live streaming content and movie trailers from therespective Channels and write reviews in the discussion zone. With Weibo’s location-based services, users can locate popular points of interest, find information about themsuch as show times for movie theaters and menus for restaurants, access coupons, postcomments, and see reviews shared by other users.

• Trends. Trends are lists of hot topics on Weibo. A user can start a topic discussion byadding hashtags (#) around a word or phrase in a feed. The key word or phrase thenbecomes searchable with a single click. Top trends are listed in the discovery zone. Usersmay view feeds under each trending topic and participate in the discussion. Weibo hotsearch is our hot topic ranking chart which is calculated based on data mining of real-timesearch data on the Weibo platform, presenting to users the most breaking, real-time andtrendy content. It is currently the go-to platform for hot trend discovery, consumption anddiscussion.

We offer our advertising and marketing customers promoted trends. See also “— Productsfor Advertising and Marketing Customers — Promoted Trends and Search.”

• Video Community. The video community is the interface aggregating and recommendingvideo content from different verticals for users to conveniently access and consume.Users can also interact with video content creators and other platform users within thecommunity. Video content offerings are distributed through relationship-based feed andinterest-based feed as well.

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Self-Expression. We offer the following products to enable our users to express themselves onour platform:

• Post. Weibo enables users to express and share their ideas, opinions and stories in theform of text and multimedia content. A post is usually composed of text, and can includerich, descriptive and vivid content such as photos, short videos, live streaming andlong-form articles.

• Individual Page. Each individual user has an Individual Page to express and share ideas,opinions and stories in the form of text and multimedia content. Basic information abouta user, including username, introduction, education, location, liked feeds, accountsfollowed, follower accounts and Weibo account number, is also available on the user’sPage. Individual users with verified authentic identity information will have an orange“V” mark on their profile picture. Weibo VIP membership, which can be purchasedmainly through monthly, quarterly, or annual subscriptions, offers certain additionalservices and functions not available to free users, such as following more users, morepersonalization of their Pages, additional options to manage information feeds andfollowers and access to premium games. Business and other organizations with verifiedidentities can apply for enterprise accounts, create an Enterprise Page and will have a blue“V” mark on their profile picture. We enable organizations to customize their Pages andto increase brand awareness, interact with followers, and perform marketing events,promotion activities, and advertisement campaigns on Weibo. We also enable businessesand other organizations to increase their business efficiency by providing various tools.For example, an e-commerce merchant can facilitate purchase activities through Weibo oroffer “red envelop,” and drawings to build a follower base.

• Videos. Users can continuously create, share and discover full-screen vertical andhorizontal short videos. Videos allow users to more easily create and consume content,and have gained popularity quickly among Weibo users, especially younger generation. Inaddition, user can use tools such as stickers, filters and music to express their personality.

• Top Articles. Top Articles satisfies users’ need for content creation and presentation.Users can create beautifully presented content through Top Articles, and then publishtheir content through Weibo, which will display the content through information feed.

• Weibo Q&A. Weibo Q&A is our question-and-answer platform where users can engage infree Q&A as well as paid Q&A. The creation and interaction of user-generated contentstrengthens user engagement on Weibo.

• Weibo Live Streaming. Weibo Live Streaming includes showcase live streaming andmedia live streaming that satisfies the broadcasting demand of both individual users andbusiness or organization users.

We generate revenues from live streaming by selling virtual items on the Yizhiboplatform. See also “Financial Information— Basis of presentation and use of estimates —Revenue Recognition.”

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Social. We offer the following mechanisms to promote social interaction between users on ourplatform:

• Follow. Users can establish relationships with other users by electing to follow them.Feeds that are posted or reposted by a user will automatically appear in the informationfeed of the user’s followers. Relationships may be asymmetrical. The user being followeddoes not need to approve the follower’s decision to follow them, although a user canchoose to limit access to certain feeds or to blacklist a certain follower.

• Repost, Comment, Favorite, Like. By clicking on the Repost button, users can repost feedsfrom other users. When a feed is reposted, the original author is able to virally reach andinfluence users beyond that author’s own circle of followers, leveraging the network ofthe followers of the author’s followers, sometimes many degrees away. Users can addtheir own comments when they repost and share their view on the original feed with theirfollowers. Users can also leave comments on a feed by clicking on the Comment button.If they like a feed, they can click on the Like button to express their support for the feed.At the bottom of each feed, users can see how many people have Reposted, Commentedon or Liked the feed. Users can also save feeds into their favorites by clicking on theFavorite button.

• Topic Discussion. By accessing the topic feeds embedded in the Discovery Zone, userscan consume hot topics and trends on Weibo, participate in specific topic discussions andinteract with other platform users with similar topical interests.

• Super Topic. Super Topic is a community product to aggregate content around aninfluencer or a particular interest for users to follow. Users can join a Super Topic toaccess curated content, interact with users who share similar interests and participate intopic discussion.

• @Mention. Users can involve others into a particular feed and engage with them through@Mention these other users in the feeds. Meanwhile, users can easily participate in topicsunder which they are mentioned by going to the @Mention Page, which allows users toaccess all the feeds in which they are mentioned by other users.

Products for Advertising and Marketing Customers

We seek to provide advertising and marketing solutions to enable our customers to promotetheir brands and conduct effective marketing activities. We provide our customers withanalytical tools to enable them to track and improve the effectiveness of their marketingcampaigns on our platform. Our advertising and marketing customers include key accounts,Alibaba and SMEs that seek a full spectrum of online advertising and marketing servicesranging from brand awareness to interest generation, sales conversion and loyalty marketing.

The prices of our advertising and marketing solutions depend upon various factors, includingthe format, display location, and duration of the advertisements. We generally enter intoagreements with standard terms and conditions with advertisers and advertising agencies. Fromtime to time, we may provide sales rebates to advertising agencies. For a detailed descriptionof our pricing models for advertising and marketing solutions, see “Financial Information –Critical Accounting Policies and Estimates – Basis of presentation and use of estimates –Revenue Recognition – Advertising and Marketing Revenues.”

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Social Display Advertisements. Social display advertisements appear on the app’s openingpage, the Discovery Zone banner and the website home page banner. When users click on adisplay advertisement, they may be redirected to the advertiser’s Weibo Page or a product pageon other platforms for further engagement or conversion. Social display advertisements mainlyserve key account customers.

Promoted Marketing. Leveraging our large and engaged user base, and celebrities and KOLs’influence on Weibo platform, our customers are enabled to amplify their visibility and thereach of their original marketing campaign, and thus achieve earned media on our platform.Our promoted marketing offerings include the following:

• Promoted Feeds. Promoted feeds appear in the user’s information feed alongside organicfeeds. We encourage our customers to produce feeds that have relevant information valuesimilar to that of the users’ organic feeds. Customers may use our SIG recommendationengine to better target their audience and improve the relevancy of the advertisement tothe users. Super FST is an advertising platform specifically for our promoted feedsadvertising products under a real time bidding system. By leveraging Weibo’s datainsights, Super FST can help customers precisely target users based on user attributes andsocial relations, enabling customers to achieve marketing objectives such as improvingcustomers’ branding, increasing website visits and advertisement conversion rate,growing fan bases, increasing app installation rates and collecting sales leads. Customercan place information feeds advertisements either through our authorized distributor, ordirectly by themselves on Super FST. Super FST provides various advertising formats,such as multi-image post, image-text, video and matrix advertisements. Some of ourdifferentiated promoted feeds advertising offerings include:

• Fans Headline is a promoted service that guarantees a certain feed from the customerwill appear at the top of the information feeds of the customer’s followers or theaudience that the customer would like to target, enabling customers to leveragecelebrities and KOLs’ rising influence on our platform.

• Weibo Express is a promoted service mainly offered to key accounts or customerswith brand awareness purpose to reach and engage with a broad range of Weibousers; and

• Promoted Trends and Search. Promoted trends and search products appear alongsideuser’s organic trends discovery and search behaviors, based on keywords, topics andtrends. Promoted trends, which are labeled as “promoted,” appear among the list oftrending topics, and can be virally distributed to reach broader audience on the platform.When a user clicks on a promoted trend, he will be redirected to the sponsor’s landingpage. Promoted searches usually appear as the default keyword or topic in the search barwhen triggered by users’ search behaviors of certain sponsored keyword or topic.

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Products for Platform Partners

We seek to provide our platform partners with abundant tools and services, which improvesWeibo’s content ecosystem with more diverse and high quality content, increases userengagement, enhances user experience, expands user scale and strengthens platform influence.Our platform partners include traditional and online media outlets, copyright content providers,KOLs, MCNs and other self-media, as well as app developers and data suppliers. We offerdifferent products tailored to different types of platform partners, including:

Products for copyright content providers. We work with TV channels, online video websitesand operators with copyright content through traffic resource exchange and content trafficsharing. Such cooperation enriches Weibo’s content ecosystem with diversified video contentand strengthens Weibo’s brands influence, while at the same time enhancing partners’ userscales, and their brands influence.

• Standardized products. Our standardized products to platform partners include, amongothers, Trends, Search, Video/Live Streaming, and Editing tools.

• Customized products. We provide customized products such as content customization,pooling of copyright contents and user interaction development to our platform partners.

• Resource services. We provide our platform partners with operational resources to expandtheir brand influence, such as search list recommendation, trends list recommendation andWeibo app opening advertisements.

Products for KOLs, MCNs and other self-media. Self-media refers to organization partnerswith the ability to manage and provide services to top content creators on Weibo, such asMCNs, unions and e-commerce partners. These top content creators produce various types ofcontent on Weibo in the form of video, live stream, images and text. We provide self-mediawith standardized products and services to help them build up and monetize social assets,which in return enables them to produce more content and attracts more self-medias to ourplatform. Our products and services to them include:

• Back-end management. We provide standardized and specialized back-end managementallowing KOLs and self-media to monitor their traffic performance and manage theiraccounts in a scalable manner. Our back-end management services include, among others,management of accounts, data, resources and growth.

• Traffic supports. We provide traffic distribution supports such as accountrecommendation, content recommendation and access to certain exclusive functions.

• Product services. We provide self-media with product solutions for better displaying andpromotion of its account and content through various channels, including informationfeeds, video feeds and users’ home pages.

Products for other app developers. Under user consent, our open application platform allowsusers to log into third-party applications with their Weibo account, which enables sharing ofthird-party content on our platform. User privacy is strictly protected during the authorizationto third-party applications, which only have access to users’ basic public information. Thisproduct helps mobile app developers to acquire users while helps Weibo to acquire sharedcontent from other apps and platforms.

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Platform partners when purchasing our advertising and marketing solutions as specified above,will enter into agreements with us having the standard terms and conditions with advertisersand advertising agencies. For a detailed description of our pricing models for advertising andmarketing solutions, see “Financial Information — Critical Accounting Policies and Estimates— Basis of presentation and use of estimates — Revenue Recognition — Advertising andMarketing Revenues.” Platform partners, when creating, sharing, and distributing content onour platform, can use our features for users. Platform partners, including MCNs and KOLs,may enter into service agreements with us, which generally include revenue sharingarrangements for revenues generated from advertising and membership subscription inassociation with content that they created and posted on our platform. See “— Products andServices — Products for Users.” Some of our platform partners are also our suppliers, and weenter into agreements with them for activities such as purchasing copyright contents.

Weibo Wallet. Our Weibo wallet product enables platform partners to conduct interestgeneration activities on Weibo, such as handing out “red envelops” and coupons to other usersto build a bigger and more active fan base, and drive purchase conversion. Weibo wallet alsoenables individual users to purchase different types of products and services on Weibo,including those offered by us, such as marketing services and VIP membership, and thoseoffered by our platform partners, such as e-commerce merchandises, financial products andvirtual gifts.

COMPETITION

We provide online social media services for users in China and the global Chinesecommunities. The social media industry is highly competitive and rapidly changing due to thequickly evolving market demand and user preferences. As a result, we face significantcompetition for user traffic, user engagement and advertising and marketing spending from awide array of existing and potential competitors who may launch new websites, apps, platformsor services at a relatively low cost. Many companies offer various content and services thatcompete with our offerings. With the growth rate of the overall size of the internet communityslowing down, the industry is evolving rapidly while witnessing rising competition for trafficand user time. See “Industry Overview — Competitive Landscapes for Social Platforms” and“Industry Overview — Competitive Landscape for Social Media Platforms”.

We are a media platform in nature, and major Chinese internet companies, such as Tencent andBytedance, that provide online media, including content aggregation and distribution services,compete directly with us for user traffic and user engagement, content, talent and marketingresources. In addition, as a social media platform featuring social networking services andproviding a rich variety of multimedia contents, we are subject to intense competition fromproviders of similar services, such as social networking platforms and multimedia contentplatforms with social features. We are subject to intense competition from providers of similarservices as well as potentially new types of online services. These services include (i)messengers and other social apps and sites, such as Weixin/WeChat, QQ Mobile, Qzone Mobileand Momo; (ii) news apps and sites, such as those operated by other major internet companies,including Tencent, Bytedance, Baidu, NetEase, Sohu and Phoenix News Media; (iii)multimedia apps (photo, video and live streaming, etc.), such as Douyin/TikTok, Kuaishou,Bilibili, iQiyi, Tencent Video, Youku, Xigua Video, Red (Xiaohongshu), Momo and JOYY. Inaddition, as a media platform in nature, we also compete with traditional media companies foraudiences and content. See “Risk factors — If we are unable to compete effectively for usertraffic or user engagement, our business and operating results may be materially and adverselyaffected.”

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For value-added services, we offer membership services, live streaming tools, game servicesand social commerce solutions to users that enable them to conduct related activities on ourplatform. Consequently, our value-added service offerings compete with platforms whichprovide similar services to users. In addition to direct competition, we face indirectcompetition from companies that sponsor or maintain high traffic volume websites or providean initial point of entry for internet users, including but not limited to providers of searchservices, web browsers and navigation pages.

We also face significant competition for advertising and marketing spending. A substantialmajority of our revenues is generated from the sale of advertising and marketing services. Wecompete against online and mobile businesses that offer such services, including but notlimited to online media platforms, social media and social networking platforms andmultimedia content platforms. We also compete with internet companies that offer online-to-offline, purchase solutions and other performance-based advertising services and digital mediatailored to vertical industries, such as automobile, IT and travel. We also compete againsttraditional media outlets, such as television, radio and print, for advertising and marketingspending.

Some of our larger competitors have substantially broader product or service offerings andleverage their relationships based on other products or services to gain a larger share ofadvertising and marketing budgets. We believe that our ability to compete effectively foradvertising and marketing spending depends upon many factors, including the size,composition and engagement of our user base, our advertisement targeting capabilities, marketacceptance of our advertising and marketing services, our marketing and selling efforts, thereturn our customers receive from our advertising and marketing services and the strength andreputation of our brands. See “Risk Factors — Risks Relating to Our Business — If we areunable to compete effectively for advertising and marketing spending, our business andoperating results may be materially and adversely affected.”

We may also face increasing competition from global social media, social networking servicesand messengers. Some of our competitors may have substantially more cash, traffic, technicaland other resources than we do. See “Risk Factors — Risks Relating to Our Business — If weare unable to compete effectively for user traffic or user engagement, our business andoperating results may be materially and adversely affected.”

We experience significant competition for highly skilled personnel, including management,engineers, designers and product managers. Our growth strategy depends in part on our abilityto retain our existing personnel and add additional highly skilled employees. See “Risk Factors— Risks Relating to Our Business — Our business and growth could suffer if we are unableto hire and retain key personnel.”

TECHNOLOGY, RESEARCH AND DEVELOPMENT

Built on our proprietary technology, including machine learning and cloud computing, we havedeveloped a leading social media platform to satisfy users’ customized content consumptionneed. We devote substantial research and development resources in the areas of artificialintelligence, cloud computing, big-data analytics, as well as live streaming related areas.

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Unified Platform. We have developed a unified, open platform that allows our users, customersand platform partners to access a vast amount of content on Weibo from mobile devices,personal computers and other internet-enabled devices in real time. Our platform adoptsservice-oriented architecture that allows easy up-scaling and frequent upgrading of ourproducts. Our platform is built on technologies that can process and analyze bulk datagenerated by millions of users instantaneously.

Artificial Intelligence. We have in-house designed a social interest graph recommendationengine. We have developed a comprehensive database of our users’ social interest graphs basedon user actions such as Post, Repost, Comment, Like and Follow, and social relationships. OurSIG recommendation engine employs multiple algorithms, making it capable of realizinghyperscale online training, allowing us and our customers to push content to Weibo users thatthey are more likely to find interesting and relevant. We continually refine our recommendationengine to improve the relevance of information we push to users to increase user stickiness. Inaddition, we believe that advertisements can gain greater relevance from social context andbecome part of the user experience rather than an interruption of it.

Cloud Computing. Our hybrid cloud platform can spot hot topics within seconds, automaticallyand speedily expand our cloud servers within minutes, and support millions of user visitsoccurring every second. Our proprietary model optimizes and facilitates efficient data storageby dividing data into different levels. This distributed storage model allows us to efficientlymanage huge amount of data while storing data on ordinary servers that are easily scalable. Ourgeographically distributed architecture enables fast access for users across the country. Weibo,as the main distribution platform for China’s major hot topics, has been providing users withstable and smooth visiting experiences, even when its peak user access traffic was constantlyrefreshed by itself from time to time upon hot topics on its platform.

Video Platform. Our video platform supports media content in multiple formats. We haveupgraded our video encoder, making it possible to provide quality visual effects even when endusers’ bandwidths are limited. We invented a video orchestration engine, which hassignificantly increased the efficiency to process videos and the speed for users to uploadvideos. We utilize machine learning technologies to semantically understand videos uploadedto our platform, whereby we extract texts, basic features from videos to generate content labels,interest-based themes and video fingerprint information. We use these information toaccelerate content review of the videos and distribution of the videos on our platform.

Live Streaming System. We have developed a smart dispatch system that links push streamingwith node load balancing and optimal path finding technologies, which adjusts video caches toadapt to different networks and ensures video quality and stability in live streaming. We haveupgraded our live streaming engine to support millions of users watching live streamingsimultaneously and to improve user experience with lower network latency even in poorinternet conditions.

We are passionate about developing new and innovative products and services that will createa better user experience. We recorded product development expenses of US$249.9 million,US$284.4 million, US$324.1 million and US$198.0 million in 2018, 2019, 2020 and for the sixmonths ended June 30, 2021, respectively. The increase from 2019 to 2020 was primarilyattributable to a growth of US$22.7 million in personnel-related expenses arising from a largerproduct development team and higher salaries, and an increase of US$11.2 million ininfrastructure costs. The increase from 2018 to 2019 was mainly attributable to an increase ofUS$12.4 million in personnel-related expenses arising from higher salaries, an increase of

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US$7.4 million in stock-based compensation, an increase of US$6.7 million in outside laborcost and an increase of US$6.6 million in infrastructure cost. The increase from the six monthsended June 30, 2020 to the six months ended June 30, 2021 was primarily due to an increaseof US$29.7 million in personnel-related expenses, an increase of US$3.8 million instock-based compensation, and an increase of US$8.3 million in amortization of intangibleassets. Our product development team consisted of 2,374 members as of December 31, 2018,2,364 members as of December 31, 2019, 2,709 members as of December 31, 2020, and 2,770members as of June 30, 2021. They are responsible for developing, operating and maintainingour products.

SALES AND MARKETING

We maintain our own sales operations team. We transact business directly with key accountcustomers or through third-party advertising agencies and with SMEs primarily through ourdistribution network.

Due to the expertise required to carry out an effective online marketing campaign, key accountsusually hire advertising agencies to handle their internet brand campaigns. These advertisingagencies provide a broad spectrum of internet marketing and advertising services. Our salesteam leverages Weibo’s unique position and advantages in social marketing to assist keyaccount customers or their advertising agencies throughout their advertising campaign cycle,from designing advertisement campaigns and crafting advertisements in different formats toexecuting social marketing campaigns and providing analytical tracking.

Our distribution network for SME customers includes local distributors throughout China. Ourdistributors provide numerous services, including identifying customers, collecting payments,assisting customers in setting up their accounts with us, and engaging in other marketing andeducational services aimed at acquiring customers. We have relied on distributors for severalreasons. Our SME customer base in China is geographically diverse and fragmented, locatedin different regions in China. Moreover, SMEs are generally less experienced with onlineadvertising and marketing as compared to large companies and, therefore, benefit from thesupport provided by distributors. Distributors serve as an efficient channel for us to reach SMEcustomers throughout China and collect payments from them. We require distributors to staffdedicated customer service representatives for our SME customers. We provide periodictraining programs to our distributors to maintain the service quality of our distributors andstrengthen our relationships with them. In addition, we also offer marketing services throughour self-service platform on Weibo.

SINA acts as our agent in servicing our advertising and marketing clients. We have signed anagreement with SINA relating to these sales and marketing services. See “Related PartyTransactions — Our Relationship with SINA — (iv) Sales and Marketing Services Agreement.”We will continue to offer integrated solutions to customers with both SINA’s and ouradvertising and marketing solutions. We believe that our advertising and marketing solutionsare complementary to SINA’s.

We believe that our position as a leading social media platform in China has given uswidespread name recognition. We focus on continually improving the quality of our productsand services to strengthen our brand, as we believe satisfied users and customers are morelikely to recommend our products and services to others. While word of mouth has helped us,we also make selective use of advertising, promotions and special events to promote Weiboawareness and usage.

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE

Weibo is committed to living up to its social responsibilities and to facilitate meaningful publicaffairs dialogue. Media outlets use Weibo as a source of information and a distribution channelfor their headline news. Government agencies and officials use Weibo as an important officialcommunication channel for disseminating timely information and gauging public opinion toimprove public services. Individuals and charities use Weibo to make the world a better placeby launching charitable projects, seeking donations and volunteers and leveraging thecelebrities and organizations on Weibo to boost their social influence. For example, when theCOVID-19 pandemic unfolded across China in 2020, Weibo released a series of measures topromote public conversations and to help people find reliable and useful information. Inaddition, we launched Weibo Charity as early as 2012 to allow users to initiate charity projectsby posting messages on our platform. For detailed discussions, see “Business — OurCommitment to a Better Society.”

We commit to actively embracing different identities and individuals and to promote the valueof an inclusive and diverse culture with gender equality, which we believe attracts the besttalent. We adopted gender equality policy in making decisions over recruitment, training,promotion, salary, benefits and other human resources management activities. Adhering to ourequal employment and development principle, our human resources decisions shall be based oneach employee’s work performance, motivation, quality and specialty, regardless of gender,and in compliance with relevant rules and regulations. We continuously analyze and monitororganizational and diversity issues, including the gender and diversity composition of humanresources at various levels. Women hold various leader roles in our company, including Ms.Hong Du, our director, and Ms. Fei Cao, our chief financial officer. We will continue to worktowards enhancing the gender diversity of our Board, including, within three years after theListing, identify and recommend at least one female candidate to our Board for itsconsideration on appointment of a director, with the goal to achieve a higher percentage offemale board representatives, subject to our Directors (i) being satisfied with the competenceand experience of the relevant candidates after a holistic review process based on reasonablecriteria; and (ii) fulfilling their fiduciary duties to act in the best interest of our company andthe shareholders as a whole when deliberating on the appointment. We target to maintain aculture of inclusion and diversity through activities such as providing trainings over gender andinclusion, prevention of sexual harassment, and protection from sexual exploitation and abuse.

We are committed to carbon mitigation measures and will continue to explore ways to furtherimprove energy efficiency. We ask our employees to be mindful of the environment whenconsuming office supplies. Furthermore, some of the content offered on Weibo platform isdedicated to the environmental protection topics. Leveraging the various forms of content andtools we offer to content creators, environmentalists are well equipped to create and sharecontent on Weibo platform centered on environmental issues, which raises environmentalprotection awareness among the viewers. Our business is generally subject to relevant PRCnational and local environmental laws and regulations. However, our operations do not produceor discharge any industrial waste which is hazardous to the environment. As confirmed by ourPRC Legal Adviser, we are not required to obtain any approvals or certificates that areapplicable to environmental laws and regulations in the PRC.

We have formulated and implemented various workplace safety policies and procedures toensure that our employees have a safe working environment. During the Track Record Period,none of our employees were involved in any major accidents in their workplaces.

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INTELLECTUAL PROPERTY

We rely on a combination of patent, copyright, trademark and trade secret laws and restrictionson disclosure to protect our intellectual property rights. As of June 30, 2021, we have registered193 patents and applied for an additional 218 patents with the PRC State Intellectual PropertyOffice. As of June 30, 2021, we have registered 302 software copyrights with the PRC NationalCopyright Administration. We have also registered domain names, including weibo.com,weibo.cn and weibo.com.cn. We have obtained an exclusive, perpetual, worldwide androyalty-free license from SINA to use its “ ” “ ” and “ ” trademarks.

We have implemented procedures to reduce the likelihood that content published on Weibomight be used without proper licenses or third-party consents. For example, we request usersto agree to the terms and conditions set forth in the user agreement of our platform, includingagreeing not to infringe the intellectual property rights of others. We leverage our technologyto monitor and protect original content on our platform. For example, we have launched aself-protection function for video content creators, and the fingerprint trails of their videos willbe extracted and saved in our system. Our system will compare against the fingerprint trailsextracted from the newly uploaded video by third parties, then send to our screening team forsecond-level manual review. We will replace the infringing content with the link to the originalcontent. Despite our efforts to protect our proprietary rights, unauthorized parties may attemptto copy or otherwise obtain and use our technology. Monitoring unauthorized use of ourtechnology is difficult and costly, and we cannot be certain that the steps we have taken willprevent misappropriation of our technology, particularly in foreign countries where the lawsmay not protect our proprietary rights as fully as in the United States. From time to time, wemay have to resort to litigation to enforce or defend our intellectual property rights, whichcould result in substantial costs and diversion of our resources.

In addition, third parties may initiate litigation against us alleging infringement of theirproprietary rights or declaring their non-infringement of our intellectual property rights. In theevent of a successful claim of infringement and our failure or inability to developnon-infringing technology or license the infringed or similar technology on a timely basis, ourbusiness could be harmed. In addition, even if we are able to license the infringed or similartechnology, license fees could be substantial and may adversely affect our results of operations.

During the Track Record Period, there have been no intellectual property infringement claimswhich, individually or in the aggregate, in our opinion, would have a material and adverseeffect on our business, financial condition or results. See “Risk Factors — Risks Relating toOur Business — We may not be able to adequately protect our intellectual property, whichcould cause us to be less competitive” and “Risk Factors — Risks Relating to Our Business —We may be subject to intellectual property infringement claims or other allegations by thirdparties for information or content displayed on, retrieved from or linked to our platform, ordistributed to our users, which may materially and adversely affect our business, financialcondition and prospects.”

SEASONALITY

Weibo has experienced seasonality in its online advertising business. Historically, advertisingspending tends to be the lowest in the first quarter of each calendar year due to long holidaysaround the Lunar New Year. Past performance may not be indicative of future trends, as the mixof advertising industry sectors, which may have different seasonality factors, may shift fromquarter to quarter.

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CUSTOMERS AND SUPPLIERS

Our five largest suppliers, who are generally marketing or bandwidth services providers,accounted for less than 30% of our purchases for each of the years and periods over the TrackRecord Period. Our five largest customers accounted for less than 30% of our total net revenuesfor each of the years and periods over the Track Record Period. We mainly provided advertisingand marketing solutions over the Track Record Period to our major customers to promote theirbrands and conduct effective marketing activities. As of the Latest Practicable Date, based onpublicly available information, none of our directors or their close associates (as defined in theHong Kong Listing Rules) held a 5% or more shareholding interest in our top five suppliers.

RISK MANAGEMENT AND INTERNAL CONTROL

We have devoted ourselves to establishing and maintaining risk management and internalcontrol systems consisting of policies and procedures that we consider to be appropriate for ourbusiness operations, and we are dedicated to continuously improving these systems. Wecontinually review the implementation of our risk management and internal control policiesand procedures to enhance their effectiveness and sufficiency.

Financial reporting risk management

We have a set of accounting policies in place in connection with our financial reporting riskmanagement, such as financial reporting management policy and treasury management policy.Our finance department reviews our management accounts based on such policies. We alsoprovide regular training to our finance department employees to ensure that they understandour financial management and accounting policies and implement them in our daily operations.

Internal control risk management

We have designed and adopted strict internal procedures to ensure the compliance of ourbusiness operations with the relevant rules and regulations. Our internal control team worksclosely with our legal, finance and business departments to: (a) perform risk assessments andadvise risk management strategies; (b) improve business process efficiency and monitorinternal control effectiveness; and (c) promote risk awareness throughout our Company.

We maintain internal procedures to ensure that we have obtained all material requisite licenses,permits and approvals for our business operation, and our internal control team conductsregular reviews to monitor the status and effectiveness of those licenses and approvals. Ourin-house legal department works with relevant business departments to obtain requisitegovernmental approvals or consents, including preparing and submitting all necessarydocuments for filing with relevant government authorities within the prescribed regulatorytimelines.

We have taken various measures in order to comply with PRC laws and regulations governingdistribution of information over the internet and the verification of users’ identities. We utilizea real-name system to authenticate the identities of our users and live streaming hosts. Weverify identities through mobile phone numbers when any user or live streaming host registera Weibo account. We request users to agree to the terms and conditions set forth in the useragreement of our platform. Pursuant to the user agreement, each user undertakes to, amongothers, (i) use the authentic identity and personal information to register a Weibo account tocreate, publish and distribute information, and (ii) not to upload or distribute content thatviolates any PRC laws or regulations or infringes the intellectual property rights of others. Wehave implemented a content-filtering system, which adopts a machine plus manual approach.

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We employ technologies such as AI capture and key words detection to detect illegal orinappropriate content. Our review team is on 24/7 shifts to ensure sufficient manpower tomonitor content on our platform.

We have taken various measures in order to comply with PRC laws and regulations governingadvertisements. We have established a comprehensive system to review and monitor thecontent of advertisements, including a robust advertisement registration, review, and filingmanagement system. We request every advertising account to provide us with its businesslicense for our review before publishing advertisements. We will cross-check the documentscertifying the advertisement content provided by the advertising account against the actualadvertisements in accordance with PRC laws and regulations. We adopt a machine plus manualapproach to review the content of advertisements. We employ technologies such as AI captureand key words detection to detect illegal or inappropriate content in advertisements beforepublishing them online. We have established a special taskforce for content review ofadvertisements, which consist of qualification review team, content review team, qualitycontrol team and data system refinement team, among others. All of the team members arerequired to receive trainings and pass examinations prior to being on board, and also need topass regular tests afterwards. Our advertisement inspection team is on 24/7 shifts to inspect thecontent of advertisements through various channels such as designated advertisement reviewpublic account and email box. In the event that an advertisement is found to contain harmfulor illegal content, we will immediately delete such advertisement or freeze the publisher’saccount. We have developed a system to monitor the landing page of advertisements to furtherdetect and curb illegal marketing practices.

We have taken various measures in order to comply with PRC laws and regulations governinganti-monopoly and competitions. Based on the requirements under Anti-Monopoly Law (中華人民共和國反壟斷法), Anti-Monopoly Guidelines for the Internet Platform Economy Sector(《國務院反壟斷委員會關於平台經濟領域的反壟斷指南》), Anti-Monopoly ComplianceGuideline for Operators (《經營者反壟斷合規指南》) and other relevant rules and regulations,we have established a comprehensive system to internally review our investment andacquisitions, so as to assess their implications under PRC anti-monopoly laws and regulationsand the necessity to make filings with any competent PRC regulatory authorities. This systemincludes detailed procedures, methods, preparation and record keeping requirements,supervision policies and penalties in relation to the internal review and assessment. We havealso established a special task force to oversee our applications for investment and acquisitionsunder this internal review system, and to support and assist the subsidiaries within our groupfor the review and assessment over their investment and acquisitions.

Data and technology system risk management

Sufficient maintenance, storage and protection of user data and other related information iscritical to our business. We dedicate significant resources to developing and implementingprograms designed to protect user privacy, promote a safe environment and ensure the securityof user data.

We require our users to accept terms of services under which they agree to provide certainpersonal information to us, to have established information security systems protect userprivacy and to have such information filed with the MIIT or its local branch as required.

We have taken various steps in order to comply with applicable data security and dataprotection requirements. Specifically, we collect personal information and data from users onlywith their prior consent and make reasonable efforts to prevent the unauthorized use of userdata. We update our user privacy policy, Weibo Personal Information Protection Policy, on a

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regular basis in order to reflect any new data protection rules and policies. In our policy, wehave clearly set forth how we will collect, protect and store personal information that is beingcollected. For instance, we will collect a user’s profile name, email address and phone numberwhen this user registers an account on our platform. When a user logs into our platform througha third party platform, we will collect his or her profile picture, profile name and location, thepurposes of which is mainly to complete real-name identification on our platform.

In addition, we have implemented enhanced data security measures and technologies, adopteda data classification and grading system which offers various levels of data protection, strictlylimited internal access to user data on a need-to-know basis, and encrypted and desensitizeduser data whenever necessary. We have also appointed a team of dedicated data protectionprofessionals who are responsible for designing and monitoring data security management andemergency response. Data access attempts by any third party are subject to our formalevaluation and approval procedure based on the necessity and scope of the access attempts andappropriate consent from users. We typically provide third parties with anonymized andde-identified personal information and require such third parties to undertake equivalent dataprotection measures.

Although we and our PRC Legal Adviser believe that we have effective measures in place toensure compliance with applicable PRC laws and regulations relating to privacy and datacollection in all material respects, there are substantial uncertainties with respect to theinterpretation and implementation of these data security laws and regulations since datasecurity laws and regulations are relatively new. As such, we cannot assure you that our privacyand data protection measures are, and will be, always considered sufficient under applicablelaws and regulations. Weibo may need to adjust its business to comply with data securityrequirements from time to time. Weibo has made significant efforts to comply with existinglaws and regulations. Weibo will maintain active communication with the regulatoryauthorities and will rectify any problems as soon as possible, if any.

Human resources risk management

We provide regular and specialized training tailored to the needs of our employees in differentdepartments and compliance policies. We regularly organize internal training sessionsconducted by senior employees or outside consultants. We have in place a code of businessconduct and ethics approved by our board of directors which is distributed to all ouremployees. We have in place an anti-bribery and corruption policy to safeguard against anycorruption within our Company. The policy explains potential bribery and corruption conductand our anti-bribery and corruption measures. We make our internal reporting channel open andavailable for our staff to report any bribery and corruption acts. Any reported incidents andpersonnel will be investigated and appropriate measures will be taken.

Investment risk management

We invest in or acquire businesses that are complementary to our business, such as businessesthat can expand our content and service offerings. In order to control the risks associated withour investments, we generally request our investee companies to grant us customary investorprotective rights.

Our investment department is responsible for reviewing investment proposals made by relevantbusiness units. Our finance and legal departments cooperate with the deal team on dealanalysis, communication, execution, risk control and reporting. After investing in a company,our investment department monitors the deal performance on a regular basis.

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Audit committee oversight

We have established an audit committee to monitor the implementation of our risk managementpolicies across our company on an ongoing basis to ensure that our internal control system iseffective in identifying, managing and mitigating risks involved in our business operations.

Our audit committee consists of Mr. P Christopher Lu and Mr. Pehong Chen, both of whom areindependent non-executive directors. Mr. Lu is the chairman of our audit committee. For theprofessional qualifications and experiences of the members of our audit committee, see“Directors and Senior Management.”

EMPLOYEES

We had 4,350, 4,126, 5,073 and 5,430 employees, respectively as of December 31, 2018, 2019and 2020, and June 30, 2021. Our employees are mainly based in Beijing, Shanghai, Tianjin,Guangzhou and Hangzhou. The following table sets forth the numbers of our employeescategorized by function as of December 31, 2020 and June 30, 2021:

Function: Number of Employees

As ofDecember 31,

2020As of

June 30, 2021

Operations �� 879 942Sales, customer service and marketing �� 1,376 1,586Product development�� 2,709 2,770General administration and human resources �� 109 132

Total �� 5,073 5,430

The employee numbers in this “Business — Employees” section do not include employees ofSINA who spend part of their time working for our business and who have part of theirstaff-related expenses allocated to us.

As required by laws and regulations in China, we participate in various employee socialsecurity plans that are organized by municipal and provincial governments, including housing,pension, medical insurance and unemployment insurance. We are required under Chinese lawto make contributions to employee benefit plans at specified percentages of the salaries,bonuses and certain allowances of our employees, up to a maximum amount specified by thelocal government from time to time.

We typically enter into standard confidentiality and non-complete agreements with ourmanagement and product development personnel. These contracts include a standard non-compete covenant that prohibits the employee from competing with us, directly or indirectly,during his or her employment and up to two years after the termination of his or heremployment, provided that we pay compensation as specified under the agreement during therestriction period after the termination.

From time to time we employ independent contractors to support our production, engineering,marketing and sales departments. The staff expenses related to the independent contractorsrecorded in 2020 and the six months ended June 30, 2021 were not significant.

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We believe that we maintain a good working relationship with our employees, and we have notexperienced any material labor disputes. None of our employees are represented by laborunions.

PROPERTIES

Our headquarters and our principal product development facilities are located in Beijing. As ofJune 30, 2021, we have leased approximately 25,000 square meters of office space mainly inBeijing, Shanghai and Tianjin. These leases have various expiration dates. In addition, SINAallocates rental expenses to us for some of its office space where SINA employees devote partof their time to providing services to us or where SINA shares certain office space (SINAPlaza) with us for our employees to use.

The servers that support our products and services are primarily maintained at ChinaTelecommunications Corporation, or China Telecom, China Unicom branches, Ali Cloud andHuawei Cloud services in cities across China, as well as servers located in Taipei, Santa Clara,California and Hong Kong. We share the use of domestic servers with SINA during the ordinarycourse of our business. Maintenance and repair are the responsibility of SINA employees forthe time being. See “Related Party Transactions — Our Relationship with SINA.”

As of the Latest Practicable Date, we have not registered most of our lease agreements withthe relevant government authorities. The failure to register the lease agreements for our leasedproperties will not affect the validity of these lease agreements, but the competent housingauthorities may order us to register the lease agreements in a prescribed period of time andimpose a fine ranging from RMB1,000 to RMB10,000 for each non-registered lease agreementif we fail to complete the registration within the prescribed timeframe. As at the LatestPracticable Date, we have not received any notification from any competent authority in thePRC in relation to the non-registration of lease agreements. For more details of the risks anduncertainties, see “Risk Factors — Risks Relating to Doing Business in the People’s Republicof China — We face certain risks relating to the real properties that we lease.”

INSURANCE

We consider our insurance coverage to be adequate as we have in place all the mandatoryinsurance policies required by Chinese laws and regulations and in accordance with thecommercial practices in our industry. Our employee-related insurance consists of pensioninsurance, unemployment insurance, maternity insurance, work-related injury insurance,medical insurance and housing funds, as required by Chinese laws and regulations. To complywith these laws and regulations, we have caused all of our full-time employees to enter intolabor contracts and provide our employees with the proper welfare and employment benefits.

We have limited business liability or disruption insurance coverage for our operations. Duringthe Track Record Period, we did not make any material insurance claims in relation to ourbusiness, see “Risk Factors — Risks Relating to Our Business — We have limited businessinsurance coverage.”

LEGAL PROCEEDINGS AND COMPLIANCE

From time to time, we have been involved in litigation or other disputes regarding, among otherthings, copyright and trademark infringement, defamation, unfair competition and labordisputes. For example, our company has been named as a defendant in two civil actions filed

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in Texas and in California by the same individual plaintiff, alleging that her rights under theFourteenth Amendment to the United States Constitution were violated when our companyallegedly shut down her Weibo accounts without good cause. Both lawsuits have beendismissed.

For many of these legal proceedings, we are currently unable to estimate the reasonablypossible loss or a range of reasonably possible loss as the proceedings are in the early stages,or there is a lack of clear or consistent interpretation of laws specific to the industry-specificcomplaints among different jurisdictions. As a result, there is considerable uncertaintyregarding the timing or ultimate resolution of such proceedings, which includes eventual loss,fine, penalty or business impact, if any, and therefore, an estimate for the reasonably possibleloss or a range of reasonably possible loss cannot be made. With respect to the limited numberof proceedings for which we are able to estimate the reasonably possible loss or the range ofreasonably possible loss, such estimates are immaterial. We believe that such proceedings,individually and in the aggregate, when finally resolved, are not reasonably likely to have amaterial and adverse effect on our results of operations, financial position and cash flows.

During the Track Record Period, we paid an aggregate of approximately RMB14.2 million toclaimants of legal proceedings. As of the Latest Practicable Date, there were five materialoutstanding claims, which represent claims in excess of RMB10 million, with an aggregateclaim amount of approximately RMB146.7 million. Among these five outstanding claims,Weibo was named as defendant in only one claim for an amount of approximately RMB15.1million.

The following table sets out a list of licenses and permits that are material for our businessoperation in China currently held by us.

License/PermitEntity Holding theLicense/Permit Expiration Date

Value-Added Telecommunications ServicesOperating License (增值電信業務經營許可證)(information services, excluding internetcontent provision services) ��

Weimeng June 26, 2024

Value-Added Telecommunications ServicesOperating License for Internet ContentProvision Services (including news, medicineand medical devices, culture and excludinginformation search and query services, instantinformation interaction services) (增值電信業務經營許可證), or Internet Content ProvisionLicense (互聯網信息服務許可證) ��

Weimeng May 20, 2025

Surveying and Mapping QualificationCertificate (測繪資質證書)��

Weimeng October 11, 2026

Internet Drug Information Service QualificationCertificate (互聯網藥品信息服務資格證書) ��

Weimeng June 17, 2025

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License/PermitEntity Holding theLicense/Permit Expiration Date

Radio and Television Program Production andOperation License (including the productionand distribution of animated programs,features programs and televisionentertainment programs; and excluding theproduction of current political news orsimilar special topics, columns and otherrelevant radio and television programs) (廣播電視節目製作經營許可證) ��

Weimeng October 29, 2022

Online Culture Operating License (use theinformation network to operate musicentertainment products, perform plays(programs), animated products, exhibitions,competitions and performances of networkcultural products) (網絡文化經營許可證) ��

Weimeng December 30,2023

Commercial Performance License (including theoperation of performances and brokeragebusiness) (營業性演出許可證) ��

Weimeng September 29,2022

Internet News and Information Service License(including the Internet News and InformationReprint Service and Communication PlatformService) (互聯網新聞信息服務許可證) ��

Weimeng July 29, 2022

Internet Content Provision License (includingculture and excluding information search andquery services, instant information exchangeservices) (互聯網信息服務許可證) ��

Weibo Interactive May 16, 2023

We and our PRC Legal Adviser are of the view that, except for the non-compliance incidentsdisclosed, including the lack of the Internet Publishing Permit (《網絡出版服務許可證》) andthe Audio/Video Program Transmission License (《信息網絡傳播視聽節目許可證》), see“Risk Factors — We may be adversely affected by the complexity, uncertainties and changesin PRC licensing and regulation of internet businesses,” the Major Subsidiaries’ businessescomplied with the material PRC laws and regulations applicable during the Track RecordPeriod and up to the Latest Practicable Date, and there is no legal impediment for us to renewthese material licenses and permits when they expire as long as we comply with therequirements for renewing such permits and licenses.

The Administrative Provisions on Online Publishing Services requires an internet publishingservice provider to obtain an internet publishing permit. One of our PRC subsidiaries jointlyoperated mobile games developed by third parties during the Track Record Period. The mobilegames provided at our platform have been published through third party licensed electronicpublishing entities and registered with the NPPA as electronic publications. However, theprovision of online games by us may be deemed as a type of online publishing services. Dueto the failure to obtain this permit, we may be subject to various penalties, such as confiscationof the net revenues that were generated through online games, the imposition of fines, therevocation of our business and operating licenses and the discontinuation or restriction of ouroperations of online games. In May 2021, our PRC Legal Adviser conducted telephoneinterviews with officers in the relevant departments of the NPPA (through the NPPA’s officialenquiry line accessed through, and published on, its official website), being the competent

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persons of the competent regulatory authority in relation to the internet publishing permit. TheNPPA confirmed that it would not order operators without an internet publishing permit to shutdown their websites or Apps, on the condition that the content of their publications complywith the requirements of laws and regulations. Revenues generated from game-related servicesaccounted for less than 5% of our total net revenues in 2018, 2019 and 2020, except thatrevenues generated from game-related services accounted for 5.1% of our total net revenues inthe six months ended June 30, 2021.

The Rules for the Administration of Internet Audio and Video Program Services requirecompanies providing audio/video programs to the public via the internet and the service ofuploading and spreading audio/video programs to obtain the audio/video program transmissionrelated qualifications. Weimeng, one of our PRC subsidiaries, operates live streaming businessand provides users with the services of uploading audio/video programs. Weimeng is notqualified to obtain the internet audio/video program transmission license under the currentlegal regime as it is not a wholly state-owned or state-controlled company and it was notoperating prior to the issuance of the Rules for the Administration of Internet Audio and VideoProgram Services, commonly known as Circular 56. However, in 2019, we have registered withthe National Internet Audio-Visual Platforms Information Management System, through whichour operations of audio/video programs are supervised and guided by the National Radio andTelevision Administration and its local branches. This registration was valid until May 1, 2021and is currently under the annual renewal process. In May 2021, our PRC Legal Adviserconducted telephone interviews with officers in the relevant departments of Beijing MunicipalRadio and Television Bureau and National Radio and Television Administration (through theirofficial enquiry lines accessed through, and published on, their official websites), each beinga competent person in the competent regulatory authorities in relation to the internetaudio/video program transmission license. The Beijing Municipal Radio and Television Bureauand National Radio and Television Administration each confirmed that if the filings in NationalInternet Audio-Visual Platforms Information Management System has been completed, and aslong as the platform follows the guidance from the regulatory authorities, such platform couldcontinue to provide audio/video program services without obtaining the audio/video programtransmission license. Based on the confirmation from the above competent authorities and asadvised by our PRC Legal Adviser, we may continue to provide internet audio-visual programservices as currently conducted, so long as our operations are in compliance with the operatingrequirements under the PRC laws and regulations governing audio-visual program services,proper filings with and review under National Internet Audio-Visual Platforms InformationManagement System and follow the guidance from the regulatory authorities. Due to the failureto obtain this license, we may be subject to various penalties, such as including removal of therelevant online publications, confiscation of illegal income, fines, and/or the closure of ourrelevant websites which could lead to severe disruption to our business operation. Our PRCLegal Adviser has advised us that, as long as we take immediate remedial actions if requiredby the regulatory authorities, the likelihood of us being subject to an order to suspend ourinternet audio-visual program services because of the above situation is low. Revenuesgenerated from live streaming accounted for less than 5% of our total net revenues during theTrack Record Period.

RECENT REGULATORY DEVELOPMENTS

On August 30, 2021, the NPPA issued the Notice on Further Strict Management to PreventMinors from Indulging in Online Games (《關於進一步嚴格管理切實防止未成年人沉迷網絡遊戲的通知》), which requires all online game operators to provide services to minors only onany Friday, Saturday, Sunday and statutory holidays from 8:00 p.m. to 9:00 p.m., i.e. for onehour, and not to provide online games in any form to users who have not registered or loggedin with their real names. In addition to the real-name registration system already in place, we

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have adjusted the systems in the games operated by us to comply with the requirements underthis notice. The revenue contributed by online games accounted for an insignificant portion ofour total revenue during the Track Record Period. The Company is of the view that this noticewill not have a material adverse impact on its business operation or financial results.

The Cyberspace Administration of China launched a “Fan Group Chaos Rectification” specialaction on June 15, 2021, followed by the issuance of the Notice on Further Strengthening theManagement of Chaos in Fan Groups (《關於進一步加強“飯圈”亂象治理的通知》) on August25, 2021. Both of the special action and notice are intended to rectify chaos in online fangroups for celebrities, specifically, in features such as celebrity rankings, hot topics, fancommunities, and fans interactive functions, so as to curb verbal abuse, stigmatization,instigation, confrontation, insults, slander, rumors, malicious marketing and the spread of otherharmful information. This notice requested, among other things, the cancellation of allrankings of celebrities. The rankings of music, film and television works are still allowed, butthe network platforms should optimize and adjust ranking rules to focus on the art worksthemselves and professional evaluation. Furthermore, minors are not allowed to make virtualgifting or spending money on supporting idols, or act as the organizer or manager of a fangroup. As of the Latest Practicable Date, we have taken measures specified in this notice to theextent applicable to our business, including removing the function of star power list on ourplatform.

On August 27, 2021, the CAC issued a discussion draft of Administrative Provisions onAlgorithm Recommendation of Internet Information Services (《互聯網信息服務算法推薦管理規定(徵求意見稿)》), which provides that algorithms recommendation service providers arenot allowed to use algorithms to register false user accounts, block information, give excessiverecommendations, and users should be given the option to easily turn off algorithmrecommendation services. Although the CAC has solicited comments on this draft since August27, 2021, there is no timetable as to when it will be enacted. As such, substantial uncertaintiesexist with respect to its enactment timetable, final content, interpretation and implementation.If the draft of the Administrative Provisions on Algorithm Recommendation of InternetInformation Services is enacted as proposed, we may need to further adjust our business andoperations. Under this draft, one of the key requirements is that the algorithm recommendationservice providers should publicly disclose the basic principles, purposes, intention, andoperating mechanism of their algorithm-related products. In this regard, we have publiclydisclosed the operation mechanism for “Weibo hot search” in the Weibo Hot SearchManagement Rules, which are posted as a Weibo community announcement. We have alsoprovided an option settings for our users to adjust the algorithm-driven recommendationssettings for content and advertisements. A user can click to deactivate “personalized adsrecommendation” function to lower the relevancy of the ads pushed to this user, and todeactivate “personalized content recommendation” function to lower relevancy of the contentrecommended to this user. We believe our initiatives will satisfy several key requirementsunder the draft Administrative Provisions on Algorithm Recommendation of InternetInformation Services to the extent possible. However, we cannot assure you that the PRCregulatory authorities will not take a view contrary to ours due to substantial uncertainties withrespect to the enactment timetable, final content, interpretation and implementation of thisdraft. We have been making efforts to adapt our business further to comply with otherapplicable requirements under this draft. We have been advised by our PRC Legal Adviser thatour current approaches are in compliance with effective laws and regulations for algorithmrecommendation in all material aspects as of the date of this document, however, since the draftAdministrative Provisions on Algorithm Recommendation of Internet Information Services hasnot been enacted as of the date of this document, the potential impact on our businessoperations is still substantially uncertain. In the event the draft is eventually enacted, theimpact on our SIG recommendation engine still depends largely on the number of users who

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actually turn off our algorithm recommendation services. If such opt-out ratio turns out to beon the high end, the advertisement efficiency on our platform may ultimately be lowered andour business operations may be adversely affected.

On September 17, 2021, the CAC, together with eight other governmental authorities, jointlyissued the Guidelines on Strengthening the Comprehensive Regulation of Algorithm forInternet Information Services (關於加強互聯網信息服務算法綜合治理的指導意見), whichprovides that daily monitoring of data use, application scenarios and effects of algorithms shallbe carried out by the relevant regulators, and security assessments of algorithm shall beconducted by the relevant regulators. The guidelines also provide that an algorithm filingsystem shall be established and classified security management of algorithms shall bepromoted. The Company will closely monitor the regulatory development and adjust itsbusiness operation from time to time to comply with the regulations over algorithm.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of thePeople’s Republic of China (《中華人民共和國個人信息保護法》) (the “Personal InformationProtection Law”), effective from November 1, 2021. The Personal Information Protection Lawrequires, among others, that (i) the processing of personal information should have a clear andreasonable purpose which should be directly related to the processing purpose, in a method thathas the least impact on personal rights and interests, and (ii) the collection of personalinformation should be limited to the minimum scope necessary to achieve the processingpurpose to avoid the excessive collection of personal information. Different types of personalinformation and personal information processing will be subject to various rules on consent,transfer, and security. Entities handling personal information shall bear responsibilities fortheir personal information handling activities, and adopt necessary measures to safeguard thesecurity of the personal information they handle. Otherwise, the entities handling personalinformation could be ordered to correct, or suspend or terminate the provision of services, andface confiscation of illegal income, fines or other penalties.


On July 30, 2021, the State Council promulgated the Regulations on Security Protection ofCritical Information Infrastructure (《關鍵信息基礎設施安全保護條例》), effective onSeptember 1, 2021. According to the Regulations on Security Protection of Critical InformationInfrastructure, a “critical information infrastructure” has the meaning of an important networkfacility and information system in important industries such as public communications andinformation services, energy, transportation, water conservancy, finance, public services,e-government, national defense technology, etc., as well as other important network facilitiesand information systems that may seriously endanger national security, the national economy,the people’s livelihood, or the public interests in the event of damage, loss of function, or dataleakage. The competent governmental departments and supervision and managementdepartments of the aforementioned important industries will be responsible for (i) organizingthe identification of critical information infrastructures in their respective industries inaccordance with certain identification rules, and (ii) promptly notifying the identified operatorsand the public security department of the State Council of the identification results.

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On July 10, 2021, the CAC published a discussion draft of the proposed amended Measures forCybersecurity Review (《網絡安全審查辦法(修訂草案徵求意見稿)》), which provides that therelevant operators must apply with the Cybersecurity Review Office for a cybersecurity reviewunder the following circumstances: (i) operators of “critical information infrastructure” or dataprocessors holding over one million users’ personal information when listing abroad (國外上市), (ii) operators of “critical information infrastructure” that intend to purchase internetproducts and services that will or may affect national security, and (iii) data processors carryingout data processing that will or may affect national security. The CAC solicited comments onthis draft, but there is no timetable as to when it will be enacted. As such, substantialuncertainties exist with respect to its enactment timetable, final content, interpretation andimplementation. As of the date of this document, the amended Measures for CybersecurityReview have not been formally adopted. See “Risk Factors — Substantial uncertainties existwith respect to the interpretation and implementation of cybersecurity related regulations andcybersecurity review as well as any impact these may have on our business operations.” Thediscussion draft of the proposed amended Measures for Cybersecurity Review does not providedetailed explanation or interpretation of the conditions or procedures for listing abroad or anyadditional requirements.

The CAC, as the regulator in charge of cybersecurity and the identification of operators of“critical information infrastructure” in the internet sector, maintains regular communicationwith, and supervision over, major internet companies like us. Under the current PRCcybersecurity laws, operators of “critical information infrastructure” that intend to purchaseinternet products and services that will or may affect national security must apply for acybersecurity review. See “Regulatory Overview — Regulations on Information Security.” Asadvised by our PRC Legal Adviser, the scope of operators of “critical informationinfrastructure” under the current regulatory regime remains unclear and is subject to thedecisions of the relevant PRC government authorities that have been delegated the authority toidentify operators of “critical information infrastructure” in their respective jurisdictions(including regions and industries). In addition, the requirement that data processors carryingout data processing that will or may affect national security will be subject to cybersecurityreview is new to the proposed draft amendments to the Measures for Cybersecurity Review,and is similarly ambiguous with respect to identifying which data processing activities impactor may impact cybersecurity. Therefore, it is not possible for us to state with certainty how thisproposed draft amendment may ultimately affect our products and services. The PRCgovernment authorities have wide discretion in the interpretation and enforcement of these law,including the identification of operators of “critical information infrastructure”, theinterpretation and enforcement of requirements potentially applicable to such operators of“critical information infrastructure” and identifying which data processing activities impact ormay impact cybersecurity. As a major internet platform, we are at risk of being deemed to bean operator of “critical information infrastructure” or a data processor meeting the abovecriteria under PRC cybersecurity laws. In such case, we would be required to fulfill variousobligations as required under PRC cybersecurity laws and other applicable laws for suchoperators of “critical information infrastructure” and data processors meeting the abovecriteria, including, among others, setting up a special security management organization,organizing regular cybersecurity education and training, formulating emergency plans forcyber security incidents and conducting regular emergency drills. In addition, although theinternet products and services we purchase are primarily bandwidth, copyright content andmarketing services, we may be subject to cybersecurity review when purchasing those. As ofthe date of this document, we have not been involved in any investigations or cybersecurityreviews by the CAC for making those purchases of internet products and services during theTrack Record Period, and we have not received any inquiry, notice, warning, or sanction insuch respect. If a cybersecurity review for any of our activities is required, we will actively

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cooperate with the CAC to conduct such cybersecurity review. We have already met several keyobligations currently applicable to operators of “critical information infrastructure,” includingsetting up a special security management organization, organizing regular cybersecurityeducation and training, formulating emergency plans for cyber security incidents, andconducting regular emergency drills. We are not able to fulfill the relevant obligations that areonly applicable and available if we are recognized as an operator of “critical informationinfrastructure,” such as conducting network security inspections and risk assessments oncritical information infrastructure at least once a year either through self-assessment or througha cybersecurity service agency, timely correcting any security issues discovered, and reportingrelevant matters as required by the security protection departments. If we are deemed to be anoperator of “critical information infrastructure” or a relevant data processor, we may need totake measures to meet these obligations, which may disrupt our operations and adversely affectour business, results of operations and financial condition. On November 14, 2021, the CACpublished a discussion draft of the Management Measures for Internet Date Security (《網絡數據安全管理條例(徵求意見稿)》) or the Draft Measures for Internet Data Security, whichprovides that the data processors conducting the following activities shall apply forcybersecurity review in accordance with the relevant regulations: (i) merger, reorganization orseparation of Internet platform operators that have acquired a large number of data resourcesrelated to national security, economic development or public interests affects or may affectnational security; (ii) listing abroad (國外上市) of data processors processing over one millionusers’ personal information; (iii) listing in Hong Kong which affects or may affect nationalsecurity; (iv) other data processing activities that affect or may affect national security. TheCAC solicited comments on this draft, but there is no timetable as to when it will be enacted.As such, substantial uncertainties exist with respect to its enactment timetable, final content,interpretation and implementation, especially the detailed explanation or interpretation of thestandard for determining whether a listing in Hong Kong “affects or may affect nationalsecurity.” As of the date of this document, the Draft Measures for Internet Data Security havenot been formally adopted. See “Risk Factors – Substantial uncertainties exist with respect tothe interpretation and implementation of cybersecurity related regulations and cybersecurityreview as well as any impact these may have on our business operations.” In addition, the DraftMeasures for Internet Data Security also provides that (i) the operators of large Internetplatforms who set up headquarters or, operation centers or R&D centers overseas (境外) shallreport to the national cyberspace administration and competent authorities and (ii) a dataprocessor processing important data or going public overseas (境外) shall conduct an annualdata security assessment by themselves or entrust a data security service institution to do so,and submit the data security assessment report of the previous year to the local branch of CACbefore January 31 of each year. See “Regulatory Overview – Regulations on InformationSecurity.” On July 6, 2021, the General Office of the Central Committee of the CommunistParty of China and the General Office of the State Council jointly issued the Opinions onStrictly Combating Illegal Securities Activities (《關於依法從嚴打擊證券違法活動的意見》),which emphasize on the prevention of illegal securities activities and tightened supervisionover overseas listings by China-based companies. The opinions aim to achieve this byestablishing a regulatory system and revising the existing rules for overseas listings by Chineseentities and affiliates, including potential extraterritorial application of China’s securities laws.As the opinions are new, official guidance and implementation rules have not been issued andthe final interpretation of and potential impact from these opinions remain unclear at this stage.See “Risk Factors — The approval of the CSRC or other PRC government authorities may berequired in connection with this offering under PRC law, and, if required, we cannot predictwhether we will be able to obtain such approval.” As of the date of this document, we have notreceived any inquiry, notice, warning, or sanction regarding this offering from the CSRC or anyother PRC government authorities.

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On September 11, 2020, the Anti-Monopoly Commission of the State Council issuedAnti-Monopoly Compliance Guideline for Operators (《經營者反壟斷合規指南》), whichrequires operators to establish anti-monopoly compliance management systems under the PRCAnti-Monopoly Law to manage anti-monopoly compliance risks. On February 7, 2021, theAnti-Monopoly Commission of the State Council published Anti-Monopoly Guidelines for theInternet Platform Economy Sector (《國務院反壟斷委員會關於平台經濟領域的反壟斷指南》)that specified circumstances where an activity of an internet platform will be identified asmonopolistic act as well as concentration filing procedures for business operators, includingthose involving variable interest entities. In August 2021, the SAMR issued two investigationnotices to Weimeng Chuangke regarding alleged illegal concentration of business operatorsunder the Anti-Monopoly Law, among which, one resulted in a fine of RMB500,000 forconcentration of business operators without prior filing pursuant to the Anti-Monopoly Law(中華人民共和國反壟斷法) and the other one is still under investigation as of the date of thisdocument. Weimeng Chuangke is actively cooperating with the SAMR on such investigation.We are not able to predict the status or the results of the investigation at this stage. Accordingto the PRC Anti-Monopoly Law (中華人民共和國反壟斷法), if a business operator carries outa concentration in violation of the law, the relevant authority shall order the business operatorto terminate the concentration, dispose of the shares or assets or transfer the business withina specified time limit, or take other measures to restore the pre-concentration status, andimpose a fine of up to RMB500,000. As such, our PRC legal adviser is of the view that wecould be subject to fines of up to RMB500,000 and other legal actions by the SAMR for suchconcentration. On October 23, 2021, the Standing Committee of the National People’sCongress issued a discussion draft of the amended Anti-Monopoly Law, which proposes toincrease the fines for illegal concentration of business operators to no more than ten percentof its last year’s sales revenue if the concentration of business operator has or may have aneffect of excluding or limiting competitions; or a fine of up to RMB5 million if theconcentration of business operator does not have an effect of excluding or limiting competition.The draft also proposes that the relevant authority shall investigate a transaction where thereis any evidence that the concentration has or may have the effect of eliminating or restrictingcompetitions, even if such concentration does not reach the filing threshold. See “RiskFactors–Any failure or perceived failure by us to comply with the Anti-Monopoly Guidelinesfor Internet Platforms Economy Sector and other PRC anti-monopoly laws and regulations mayresult in governmental investigations or enforcement actions, litigation or claims against us andcould have an adverse effect on our business, financial condition and results of operations.”

On October 26, 2021, the CAC issued draft Administrative Provisions on the Account Namesof Internet Users (互聯網用戶賬號名稱信息管理規定(徵求意見稿)), revising the Regulationson the Administration of Internet User Account Names (互聯網用戶賬號名稱管理規定) thattook effect on March 1, 2015. This draft provides that when registering an internet account, theuser shall execute an agreement with the Internet user account services platform, provideauthentic identity information, and obey the rules of the platform for content production andaccount management, and the platform conventions and service agreement. Internet useraccount service platforms shall establish, improve and strictly implement, among others,account name information management system, information content security system, andpersonal information protection system. Internet user account service platforms should alsoestablish an account name information dynamic check patrol system for the verification of realidentity information, improve their technical measures for purposes of account informationlegal compliance, and support account name authenticity checks. When an Internet useraccount is in violation of the provisions of this draft, the Internet user account service platformshall suspend the service and inform the user to correct the issue within a limited time; and ifthe user refuses to correct it, the account shall be terminated. Although the CAC has solicited

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comments on this draft until November 10, 2021, there is no timetable as to when it will beenacted. As such, substantial uncertainties exist with respect to its enactment timetable, finalcontent, interpretation and implementation. If such draft is enacted as proposed, it would becostly for us to make more efforts on monitoring and managing user account names to complywith these requirements.

On October 8, 2021, the National Development and Reform Commission issued a discussiondraft of the Negative List for Market Access (2021 Version) (市場准入負面清單(2021年版)),which provides that, among others, non-state-capitalized entities shall not conduct the businessof news collecting, editing, releasing and reporting. Weibo does not collect, edit, release orreport news by itself. Weibo holds an Internet News and Information Service License, whichallows it to provide the service of reposting news information and operating a platform todisseminate news information. The draft Negative List also provides that non-state-capitalizedentities shall not engage in live streaming of political, economic, military, diplomatic, majorsocial, cultural, scientific and technological, health, education, sports and other activities andevents related to political direction, public opinion orientation and value orientation. The scopeof live streaming business under this list is relatively broad and vague, and is subject to furtherclarifications and interpretations by the regulator. However, as we generated less than 5% ofour net revenues from live streaming, we do not believe this new requirement would have amaterial adverse impact on our business operations or financial results. The NDRC hassolicited comments on this draft since October 8, 2021, and there is no timetable as to whenit will be enacted. As such, substantial uncertainties exist with respect to its enactmenttimetable, final content, interpretation and implementation. If the draft of the Negative List forMarket Access (2021 Version) is enacted as proposed, we may need to further adjust ourbusiness and operations and our business operations may be adversely affected.

Based on the foregoing and the currently effective PRC laws, we and our PRC Legal Adviserare of the view that the above recent changes in PRC laws and regulations will not affect ourcompliance with laws and regulations in any material aspects as of the date of this document.As of the date of this document, except as disclosed above, we were not involved in anyenquiry, review or investigations by the CAC or other authorities in respect of the aboverecently promulgated laws and regulations.

However, we and PRC Legal Adviser cannot preclude the possibilities that new rules orregulations promulgated in the future will impose additional compliance requirements on us.

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The following discussion and analysis of our financial condition and results of operationsshould be read in conjunction with our consolidated financial statements and the relatednotes included in the Accountant’s Report in Appendix IA and in “Business.” Thisdiscussion contains forward-looking statements that involve risks and uncertainties. Ouractual results and the timing of selected events could differ materially from thoseanticipated in these forward-looking statements as a result of various factors, includingthose set out under “Risk Factors” and elsewhere in this document. We have prepared ourconsolidated financial statements in accordance with U.S. GAAP. Our fiscal year ends onDecember 31 and references to fiscal years 2018, 2019 and 2020 are to the fiscal yearsended December 31, 2018, 2019 and 2020, respectively.

OVERVIEW

As a leading social media platform for people to create, discover and distribute content inChina and the global Chinese communities, Weibo combines the means of public self-expression in real time with a powerful platform for social interaction, content creation anddistribution. Since our inception in August 2009, we have achieved significant scale. In June2021, we had 566 million MAUs and 246 million average DAUs. Approximately 94% of ourMAUs in June 2021 accessed Weibo through mobile devices at least once during the month.

We offer a wide range of advertising and marketing solutions to our customers, ranging fromkey accounts, which are mostly large brand advertisers, to small medium-sized enterprises,enabling them to promote their brands, products and services to our users. Advertising andmarketing services contribute to the majority of our revenues, mainly including the sale ofsocial display advertisements and promoted feeds. We have developed and are continuouslyrefining our interest-based recommendation engine, which enables our customers to performsocial marketing and target audiences based on user demographics, social relationships andinterests to achieve greater relevance, engagement and marketing effectiveness on Weibo.

The value we create for our users and customers is enhanced by our platform partners, whichinclude content creators such as KOLs, media outlets and other organizations with mediarights, MCNs, which are professional agencies for influencers, self-medias and app developers.Our platform partners contribute a vast amount of content to Weibo, which generates userengagement and is virally distributed across the platform, enriching user experience andincreasing Weibo’s monetization opportunities. We have revenue-sharing arrangements withsome of our platform partners, such as live streaming agencies, influencers, MCNs and gamedevelopers.

Weibo began monetization in 2012 primarily through the sale of advertising and marketingservices and, to a lesser extent, through value added services, mainly including VIPmembership, live streaming, and game related services. We place great emphasis on productinnovation and our steady stream of introductions of new advertisement products has led tosolid and healthy revenue growth since our IPO, despite the adverse impact from COVID-19in 2020. Our revenues in 2018, 2019 and 2020 were US$1,718.5 million, US$1,766.9 millionand US$1,689.9 million, respectively. Our revenues increased from US$710.8 million for thesix months ended June 30, 2020 to US$1,033.4 million for the six months ended June 30, 2021.We had a net income attributable to Weibo’s shareholders of US$571.8 million in 2018,US$494.7 million in 2019 and US$313.4 million in 2020. We had a net income attributable toWeibo’s shareholders of US$250.5 million for the six months ended June 30, 2020 andUS$130.8 million for the six months ended June 30, 2021.

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FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business and operating results are affected by general factors affecting the social mediaindustry in China, which include:

• the extent to which social media continues to grow in popularity and becomes furtherintegrated into people’s everyday lives in China;

• the intensity of competition both for the time and attention of internet users and for theadvertising and marketing spending of brands and businesses that market to consumers;

• the changes in China’s or global economies, policies, and regulatory environment; and

• continued mobile internet penetration and infrastructure development.

Unfavorable changes in any of these general factors could negatively affect demand for ourproducts and services and adversely affect the results of our operations. In addition to thegeneral factors affecting the social media industry in China, the specific factors affecting ourresults of operations include the following:

Scale and Engagement of Our User Base. Our revenues are ultimately affected by the scaleof our user base, and the strategies we pursue to achieve user growth may affect our costs andexpenses and results of operations. We have experienced solid user growth since our inceptionin 2009. As the size of our user base increases to an even larger scale and as we become morepenetrated in China, our user growth rate may decrease. Due to the media nature of ourplatform, the growth of our users may not be linear. In general, the penetration of Weibo amonginternet users in the more economically developed tier 1 and tier 2 cities in China who useWeibo is higher than in other parts of China. Our ability to grow our active user base willdepend in part on the success of our strategies to attract additional users from lower-tier citiesand towns in China while maintaining or growing our user base in tier 1 and tier 2 cities.

Changes in user engagement could affect our results of operations, especially since we beganadding monetization features to our social platform. We need to motivate our users to engageactively on our platform to secure an abundant supply of user-generated content, to enticecontent creators to share even more content, and to ensure that we have a broad audience forour advertising and marketing services. Video, particularly in the form of short video and livestreaming, is gaining more popularity in China and has become an important way for our usersto engage and interact on Weibo. Our ability to provide an easy-to-use infrastructure for ourusers to create and share video as well as consume video will largely impact our userexperience.

We plan to continue to enhance Weibo’s user experience and engagement by improving ourproduct features, offering new products, expanding our content offerings through collaborationwith platform partners, developing and integrating with applications and continuing to refineWeibo’s SIG recommendation engine to improve content relevancy and advertisement targetingcapabilities.

Products and Services Innovation. Social media is an innovative and fast-changing field, andwe must develop innovative products and services that meet the disparate needs of users,advertising and marketing customers and platform partners and roll them out on a timely basiswhile controlling our product development expenses. We plan to continue to make significantinvestments in product development and refining the capabilities of Weibo’s SIGrecommendation engine, and we may invest in or acquire businesses or assets to enhance ourproducts, services and technical capabilities.


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Content Ecosystem. Our success depends on our ability to provide users with interesting anduseful content, which in turn depends on the content contributed by our users. Content creators,especially KOLs, contribute content to Weibo to grow their fan base and enhance theirinfluence. We provide content creators with the opportunity to monetize their social assets onWeibo through advertising, e-commerce, subscription, tipping and other means. If contentcreators do not see significant value from their social marketing activities on Weibo and findmonetization on Weibo inadequate, we may have to subsidize them through direct content costpayout, which may have an adverse and material impact on our business, financial conditionand operating results. Alternatively, content creators may choose to contribute less or nocontent to Weibo, which may cause our user base and user engagement to decline and ourcustomers to view our products and services as less attractive for advertising and marketingpurposes. If that were to occur, our customers would reduce their spending on our platform.

Monetization. We started monetization in 2012 and have since experienced solid revenuegrowth. We generate revenues primarily from customers who purchase advertising andmarketing services, and, to a lesser extent, from value-added services. Our monetization modelis evolving and sophisticated. Therefore, we are unable to gauge the period-to-period growthof our revenues based on any particular user traffic metric. Furthermore, our ability to monetizeour user traffic depends to a large degree on how well the demographic profile and socialinterests of our users fit the audience profile that our advertising and marketing customers hopeto reach at any given time. Our advertising and marketing customers include both largecompanies and SMEs that seek a full spectrum of online advertising and marketing servicesranging from brand awareness to interest generation, sales conversion and loyalty marketing.We plan to increase the monetization of our platform by growing our user base and userengagement, and managing advertisement inventory and advertising load more effectivelywithout adversely affecting user experience. Meanwhile, in order to continue to increase theefficiency of monetization, we need to stay innovative to improve the targeting capabilities ofour advertising and marketing offerings and develop new advertisement products, formats andcapabilities. We also plan to further diversify our monetization through growing value-addedservices.

We have been exploring various ways of monetization since 2012. For example, in 2016, weupgraded our advertisement system to allow SMEs to purchase brand advertisements and keyaccounts to purchase promoted feeds, as well as introduced video advertisements. We alsointroduced promoted search to customers to sponsor key words or topics alongside users’search behaviors in 2016. In 2017 and 2020, we initiated two rounds of comprehensive revampon our advertisement system to drive bidding efficiency as well as diversify our advertisingofferings. We generate revenues from value-added services primarily by providingmembership, live streaming and online game services. We have been exploring monetizationopportunities in value-added services through investment in various areas, including ouracquisitions of a live streaming business in 2018 and a company operating several onlineinteractive entertainment apps in China including “Pocket Werewolves” in 2020.

Investment in Technology Infrastructure. Our technology infrastructure is critical toproviding users, customers and platform partners access to our platform, particularly duringmajor events when activities on our platform increase substantially. We must continue toupgrade and expand our technology infrastructure to keep pace with the growth of our businessand to ensure that technical difficulties do not detract from user experience or deter new users,customers or platform partners from accessing our platform. As 4G and Wi-Fi become morewidely available in China and 5G has been gradually introduced to people’s daily life, weexpect our users to share and consume more content in rich media format, such as photo, videoand audio, which will require more infrastructure capacity, and costs to support, than textfeeds. To further expand our capabilities to satisfy technology infrastructure demands,especially those arising from major media events and increasing video usage, we work with


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third-party service providers to procure bandwidth and other infrastructure services. Ourability to derive greater cost efficiency from infrastructure demands will depend on factorsincluding our ability to negotiate a lower unit price with third-party vendors over time and themix of services provided by third-party vendors and SINA, our controlling shareholder.

Marketing and Brand Promotion. Our brand recognition is key to our growth in both userscale and engagement to achieve platform expansion. On top of user base expansion, we haveoptimized our channel investment strategy along with relevant product and operational efforts,to focus on enhancing user engagement, which resulted in higher user acquisition efficiencywith disciplined sales and marketing spending.

Investment in Talent. Our employee headcount has increased significantly since our inception.There is heavy demand in China’s internet industry for talented technical, sales and marketing,management and other personnel with necessary experience and expertise. We must recruit,retain and motivate talented employees while controlling our personnel-related expenses,including stock-based compensation.

IMPACT OF COVID-19 ON OUR OPERATIONS AND FINANCIAL PERFORMANCE

Substantially all of our revenues and workforce are concentrated in China. Our results ofoperations and financial condition in 2020 have been affected by the spread of COVID-19. Theextent to which COVID-19 impacts our financial position, results of operations and cash flowsin 2021 will depend on the future developments of the outbreak, which are highly uncertain andcannot be predicted, including new information which may emerge concerning the severity ofCOVID-19, the actions to contain the coronavirus or treat its impact, and the availability ofvaccine and treatment for COVID-19, among others. In addition, our financial position, resultsof operations and cash flows could be adversely affected to the extent that the outbreak harmsthe Chinese economy in general.

In early 2020, to contain the spread of COVID-19, the Chinese government had taken certainemergency measures, including extension of the Lunar New Year holidays, implementation oftravel bans, blockade of certain roads and suspension of operation of factories and businesses.These emergency measures have been significantly relaxed by the Chinese government as ofthe Latest Practicable Date. However, there have been occasional outbreaks of COVID-19 invarious cities in China, and the Chinese government may again take measures to keepCOVID-19 in check. Our headquarters are located in Beijing, and we currently lease themajority of our offices in various parts of China to support our operations. This outbreak ofcommunicable disease has caused, and may cause again in the future, companies, including usand certain of our customers and content partners, to implement temporary adjustment of workschemes allowing employees to work from home and adopt remote collaboration. We havetaken measures to reduce the impact of this epidemic outbreak, including upgrading ourtelecommuting system, monitoring our employees’ health on a daily basis, arranging shifts ofour employees working onsite and from home to avoid infection transmission and optimizingour technology system to support potential growth in user traffic. The outbreak of COVID-19has caused our advertising and marketing customers to reduce their advertising budgets, whichhas affected our advertising revenues and financial performance in 2020, particularly in its firsthalf. The COVID-19 pandemic has resulted in negative impact to our total revenues, slowercollection of accounts receivables, and additional allowance for credit losses. Our advertisingbusiness has been gradually recovering, underpinned by improved advertiser sentiment,following the effective control of the domestic outbreaks and work resumption. We will payclose attention to the development of the COVID-19 pandemic, including subsequent outbreaksdriven by new variants of COVID-19, perform further assessment of its impact and takerelevant measures to minimize the impact. We were exempt from payment of cultural businessconstruction fees for the fiscal years of 2020 and 2021 as part of the measures taken by the


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government to ease the negative impact from the COVID-19 pandemic. As a result, we wereexempt from payment of cultural business construction fees of US$24.6 million in 2020 andUS$11.5 million in the six months ended June 30, 2021. See also “Risk Factors — RisksRelating to Our Business — We face risks related to health epidemics and other outbreaks, suchas the outbreak of COVID-19, as well as natural disasters, which could significantly disrupt ouroperations and adversely affect our business, financial condition or results of operation.”

As of June 30, 2021, our total cash, cash equivalents and short-term investments wereUS$2,935.9 million. Our principal sources of liquidity have been cash from operations and netproceeds from issuance of unsecured senior notes. We believe this level of liquidity issufficient to successfully navigate an extended period of uncertainty.

TAXATION

We generate the majority of our operating income from our PRC operations and have recordedincome tax provisions for the periods presented.

According to Maples and Calder (Hong Kong) LLP, our Cayman Islands counsel, the CaymanIslands currently levies no taxes on individuals or corporations based upon profits, income,gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty.There are no other taxes likely to be material to us levied by the Government of the CaymanIslands, except for stamp duties, which may be applicable on instruments executed in, or afterexecution brought within, the jurisdiction of the Cayman Islands. The Cayman Islands is nota party to any double tax treaties that are applicable to any payments made to or by ourcompany. There are no exchange control regulations or currency restrictions in the CaymanIslands.

Our subsidiary incorporated in Hong Kong, Weibo HK, is subject to 16.5% Hong Kong profittax on its taxable income generated from operations in Hong Kong for the years of assessment2017/2018, 2018/2019 and 2019/2020. Commencing from the year of assessment 2018/2019,the first HK$2 million of profits earned by our subsidiary incorporated in Hong Kong will betaxed at half the current tax rate (i.e., 8.25%) while the remaining profits will continue to betaxed at the existing 16.5% tax rate. Under the Hong Kong tax laws, we are exempted from theHong Kong income tax on our foreign-derived income. Hong Kong does not impose awithholding tax on dividends.

Our PRC subsidiaries, VIEs and VIEs’ subsidiaries are incorporated in China and are subjectto enterprise income tax on their taxable income in China at a standard rate of 25% if they arenot eligible for any preferential tax treatment. Taxable income is based on the entity’s globalincome as determined under PRC tax laws and accounting standards. Preferential taxtreatments will be granted to companies conducting businesses in certain encouraged sectorsand to entities qualified as a “software enterprise,” “key software enterprise” and/or “high andnew technology enterprise.” Weibo Technology, our PRC subsidiary, was qualified as a“software enterprise” and was entitled to an exemption from the enterprise income tax for twoyears beginning 2015, its first accumulative profitable year, and a 50% reduction (to a tax rateof 12.5%) for the subsequent three years from 2017 to 2019. Although Weibo Technology wasqualified as a “software enterprise” in 2020, it did not enjoy a reduced tax rate for its “softwareenterprise” status as it has been five years since its first profitable year of 2015. WeiboTechnology completed its filings as a “key software enterprise” with the tax authority in 2018,2019 and 2020 for its status of 2017, 2018 and 2019, and, therefore, was entitled to enjoy afurther reduced preferential tax rate of 10% for 2017, 2018 and 2019. The qualification as a“key software enterprise” is subject to annual evaluation and approval by the relevantauthorities in China, and we will only recognize the preferential tax treatment of “key softwareenterprise” status when approval from the relevant authorities is obtained, usually one year in


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arrears. Weibo Technology was also granted the “high and new technology enterprise” statusfor the fiscal years from 2017 to 2022, which entitled the qualified entity to a preferential taxrate of 15% in 2020 and 2021. Its qualification as a “high and new technology enterprise” issubject to annual evaluation and a three-year review by the relevant authorities in China. Inaddition, certain of our other PRC entities also qualify as a “software enterprise,” and/or “highand new technology enterprise,” and currently enjoy the respective preferential tax treatments.

According to the relevant PRC laws and regulations, enterprises engaging in research anddevelopment activities were entitled to claim 150% of their research and development expensesincurred as tax deductible expenses when determining their assessable profits for that year (the“R&D Deduction”). The PRC State Taxation Administration announced in September 2018 thatenterprises engaging in research and development activities would be entitled to claim 175%of their research and development expenses as R&D Deduction from January 1, 2018 toDecember 31, 2020.

Our PRC subsidiaries, VIEs and VIEs’ subsidiaries are also subject to VAT and relatedsurcharges at a combined rate of 6.7%. Our advertising and marketing revenues are also subjectto cultural business construction fees at a rate of 3%, which has been reduced to 1.5% sinceJuly 1, 2019, valid until December 31, 2024. The cultural business construction fees wereexempted for the fiscal years of 2020 and 2021 as part of the measures taken by the governmentto ease the negative impact from the COVID-19 pandemic. As a result, we were exempt frompayment of cultural business construction fees of US$24.6 million in 2020 and US$11.5million in the six months ended June 30, 2021.

Dividends paid by our subsidiary in China, Weibo Technology, to our intermediary holdingcompany in Hong Kong, Weibo HK, will be subject to PRC withholding tax at a rate of 10%unless they qualify for a special exemption. If Weibo HK satisfies all the requirements underthe Arrangement between the PRC and the Hong Kong Special Administrative Region on theAvoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes onIncome and receives approval from the relevant tax authority, then dividends paid by WeiboTechnology to Weibo HK will be subject to a withholding tax rate of 5% instead. See “RiskFactors — Risks Relating to Doing Business in the People’s Republic of China — Anylimitation on the ability of our PRC subsidiaries to make payments to us, or the taximplications of making payments to us, could have a material adverse effect on our ability toconduct our business or our financial condition.”

If our holding company in the Cayman Islands, Weibo Corporation, were deemed to be a “PRCresident enterprise” under the Enterprise Income Tax Law, it would be subject to enterpriseincome tax on its global income at a rate of 25%. See “Risk Factors — Risks Relating to DoingBusiness in the People’s Republic of China — We and/or our Hong Kong subsidiary may beclassified as a ‘PRC resident enterprise’ for PRC enterprise income tax purposes. Suchclassification would likely result in unfavorable tax consequences to us and our non-PRCshareholders and have a material adverse effect on our results of operations and the value ofyour investment.”

If Weibo HK were deemed to be a “PRC resident enterprise” under the Enterprise Income TaxLaw, then dividends payable by Weibo HK to Weibo Corporation may become subject to 10%PRC dividend withholding tax. Under such circumstances, it is not clear whether dividendspayable by Weibo Technology to Weibo HK would still be subject to PRC dividend withholdingtax and whether such tax, if imposed, would be imposed at a rate of 5% or 10%. See “RiskFactors — Risks Relating to Doing Business in the People’s Republic of China — Anylimitation on the ability of our PRC subsidiaries to make payments to us, or the taximplications of making payments to us, could have a material adverse effect on our ability toconduct our business or our financial condition.”


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RESULTS OF OPERATIONS

The following table sets forth a summary of our consolidated results of operations for theperiods presented. This information should be read together with our audited consolidatedfinancial statements included in the Accountant’s Report in Appendix IA to this document. Theresults of operations in any period are not necessarily indicative of our future trends.


Ended June 30,

2018(1) 2019(1) 2020(1) 2020(1) 2021(1)


Consolidated Statements ofOperations Data:

Revenues:Advertising and marketing

revenues:Third parties �� 1,172,136 1,202,437 1,202,712 497,855 728,818Alibaba(2) �� 117,696 97,772 188,597 72,542 109,918SINA �� 79,148 112,974 48,353 27,624 30,931Other related parties �� 130,200 117,028 46,493 17,985 22,682

Subtotal �� 1,499,180 1,530,211 1,486,155 616,006 892,349Value-added services

revenues�� 219,338 236,703 203,776 94,776 141,013

Total revenues�� 1,718,518 1,766,914 1,689,931 710,782 1,033,362

Costs and expenses:Cost of revenues(3) �� 277,648 328,826 302,180 137,694 172,318Sales and marketing(3) �� 527,424 465,339 455,619 211,220 298,368Product development(3)�� 249,873 284,444 324,110 150,370 197,985General and

administrative(3)(4) �� 43,755 90,721 101,224 47,298 62,850Goodwill and acquired

intangiblesimpairment�� 10,554 — — — —

Total costs and expenses �� 1,109,254 1,169,330 1,183,133 546,582 731,521

Income from operations �� 609,264 597,584 506,798 164,200 301,841Income (loss) from equity

method investments �� 57 (13,198) 10,434 3,388 13,605Realized gain (loss) from

investments �� (287) 612 2,153 844 1,106Fair value changes through

earnings on investments,net(5)�� 40,074 207,438 35,115 117,517 (69,495)

Investment relatedimpairment(6) �� (24,074) (249,935) (211,985) (3,920) (66,625)

Interest income �� 57,970 85,386 85,829 45,609 40,068


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Ended June 30,

2018(1) 2019(1) 2020(1) 2020(1) 2021(1)


Interest expense �� (15,390) (29,896) (57,428) (22,363) (35,503)Other income, net �� 1,228 4,406 4,997 1,356 6,808

Income before income taxexpenses �� 668,842 602,397 375,913 306,631 191,805

Less: Provision of incometaxes�� 96,222 109,564 61,316 56,627 61,855

Net income �� 572,620 492,833 314,597 250,004 129,950Less: Net income (loss)

attributable to non-controlling interests andredeemable non-controlling interests �� 797 (1,842) 1,233 (520) (898)

Net income attributable toWeibo’s shareholders �� 571,823 494,675 313,364 250,524 130,848

Shares used in computing netincome per shareattributable to Weibo’sshareholders:Basic �� 223,751 225,452 226,921 226,535 227,936Diluted�� 232,683 226,412 227,637 227,129 229,429

Income per ordinary share:Basic �� 2.56 2.19 1.38 1.11 0.57Diluted�� 2.52 2.18 1.38 1.10 0.57

Income per ADS(7):Basic �� 2.56 2.19 1.38 1.11 0.57Diluted�� 2.52 2.18 1.38 1.10 0.57

(1) On January 1, 2018, we adopted new revenue guidance ASC Topic 606, “Revenue from Contracts withCustomers,” using the modified retrospective method applied to those contracts which were not completed asof January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic606, while prior period amounts are not adjusted and continue to be reported in accordance with our historicaccounting method under Topic 605. Topic 606 requires the presentation of VAT recognized in revenues from“gross” to “net,” which results in equal decrease in revenues and cost of revenues, and recognition of revenuesand expenses at fair value for advertising barter transactions.

(2) We recorded US$117.7 million, US$97.8 million and US$152.0 million in advertising and marketing revenuesfrom Alibaba during 2018, 2019 and 2020, respectively. We also recorded US$63.3 million and US$73.3million in advertising and marketing revenues from Alibaba for the six months ended June 30, 2020 and 2021,respectively. Moreover, one of Alibaba’s subsidiaries engaged in the business of advertising agency andcontributed another US$36.6 million to our total revenues in 2020, and US$9.2 million and US$36.7 millionto our total revenues for the six months ended June 30, 2020 and 2021, respectively.


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(3) Stock-based compensation was allocated in costs and expenses as follows:


Ended June 30,

2018 2019 2020 2020 2021


Cost of revenues �� 3,522 5,251 5,384 2,502 3,240Sales and marketing�� 6,837 9,828 9,983 4,263 5,549Product development �� 21,187 28,628 33,093 14,452 18,213General and

administrative �� 9,465 17,582 18,645 8,971 9,219

Total �� 41,011 61,289 67,105 30,188 36,221

(4) We adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losseson Financial Instruments” in the fiscal year of 2020. The guidance requires the measurement and recognitionof expected credit losses for financial assets held at amortized cost that an entity does not expect to collect overthe asset’s contractual life, considering past events, current conditions, and reasonable and supportableforecasts of future economic conditions.

(5) We adopted ASU 2016-01 “Classification and Measurement of Financial Instruments” beginning the firstquarter of fiscal year 2018. After the adoption of the new accounting update, we measure investments in equitysecurities, other than equity method investments, at fair value through earnings. For those investments withoutreadily determinable fair values, we elected to record these investments at cost, less impairment, and plus orminus subsequent adjustments for observable price changes. Changes in the basis of these investments arereported in current earnings.

(6) Investment related impairment includes impairment charges to equity investments, investment prepayments,and loans to and interest receivable from related parties.


Revenues

We generate revenues primarily from advertising and marketing services, including socialdisplay advertisements and promoted marketing. We also generate revenues from value-addedservices, mainly including VIP membership, live streaming, and game-related services. Othervalue-added services revenues mainly include the revenues from the provision of trafficacquisition services to various customers.

The following table sets forth the breakdown of our value-added services revenue by nature forthe periods presented:

For the Year Ended December 31,For the Six Months Ended

June 30,

2018 2019 2020 2020 2021


VIP Membership �� 98,243 108,124 123,897 59,127 65,488Live streaming �� 28,003 76,660 39,299 20,888 9,892Game-related services �� 27,303 4,406 12,577 746 52,546Others �� 65,789 47,513 28,003 14,015 13,087

Total value-added servicesrevenues �� 219,338 236,703 203,776 94,776 141,013


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Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020 NetRevenues

Our total net revenues increased by 45% from US$710.8 million in the six months ended June30, 2020 to US$1,033.4 million in the six months ended June 30, 2021.

• Advertising and Marketing Revenues. Advertising and marketing revenues increased by45% from US$616.0 million in the six months ended June 30, 2020 to US$892.3 millionin the six months ended June 30, 2021. Revenues from advertising customers (excludingAlibaba) increased by 48% from US$552.7 million in the six months ended June 30, 2020to US$819.1 million in the six months ended June 30, 2021, primarily attributable to abroad-based increase in advertising demand and strong sales execution. Revenuesgenerated from Alibaba as an advertiser increased by 16% from US$63.3 million in thesix months ended June 30, 2020 to US$73.3 million in the six months ended June 30,2021. The advertising spending from Alibaba highly correlates to its own businessoperation, especially its marketing strategies, which fluctuates from time to time.

• Value-added Services Revenues. Value-added services revenues increased by 49% fromUS$94.8 million in the six months ended June 30, 2020 to US$141.0 million in the sixmonths ended June 30, 2021, primarily attributable to the increase of game-relatedrevenues from US$0.7 million for the six months ended June 30, 2020 to US$52.5 millionfor the six months ended June 30, 2021, contributed by the interactive entertainmentcompany acquired in the fourth quarter of 2020 and incremental revenues from onlinegame services, partially offset by the decrease in the revenues from live streamingbusiness from US$20.9 million to US$9.9 million as a result of the intense marketcompetitions.

2020 Compared to 2019

Our revenues decreased by 4% from US$1,766.9 million in 2019 to US$1,689.9 million in2020.

• Advertising and marketing revenues. Advertising and marketing revenues decreased by3% from US$1,530.2 million in 2019 to US$1,486.2 million in 2020. The decrease wasmainly due to the negative impact and uncertainties brought by the COVID-19 pandemic,particularly in the first half of 2020. Mobile advertising revenues accounted forapproximately 90% of our total advertising and marketing revenues in 2020, compared to87% in 2019, benefiting from the growth of advertiser preferences. The total number ofadvertisers was 1.6 million in 2020, compared to 2.4 million in 2019, while the averagespending per advertiser (excluding Alibaba) increased by 39% from US$593 in 2019 toUS$825 in 2020, both of which were primarily due to the churn of individual customerswith relatively lower advertising budgets.

Revenue from key accounts grew by 2% from US$729.3 million in 2019 to US$741.5million in 2020, largely attributable to the strong relationship between Weibo and brandadvertising customers, as Weibo demonstrated unique value proposition for customerswith our differentiated social advertising offerings and enhanced ad performance.

Revenue from SMEs decreased by 16% from US$703.2 million in 2019 to US$592.7million in 2020, mostly due to the relatively slower recovery pace of the SME sectorduring the COVID-19 pandemic and intense market competition.


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Revenue generated from Alibaba as an advertiser increased by 55% from US$97.8 millionin 2019 to US$152.0 million in 2020. The expenditure from Alibaba on Weibo’s platformhighly correlates to its marketing strategies, which may fluctuate on an annual basis. Thesustained momentum of advertising spending from Alibaba reflects our strengthenedcooperation in driving value for brands and merchants to achieve branding plusperformance purposes through integrated advertisement campaigns on both platforms.Weibo remains a key platform for Alibaba in the fields of social marketing, e-commerceand fan economy.

• Value-added services revenues. Value-added services revenues decreased by 14% fromUS$236.7 million in 2019 to US$203.8 million in 2020. The decrease was mainly causedby the revenue decline from the Yizhibo live streaming business, which fell from US$76.7million in 2019 to US$39.3 million in 2020, resulting from the intense marketcompetition. The decrease was partially offset by (i) the revenue growth of our VIPmembership, which increased by US$15.8 million or 15% compared to 2019, resultingfrom the increase of revenue from users who were willing to pay for the content createdby our platform partners, and (ii) the revenue growth from game-related services byUS$8.2 million or 187% compared to 2019, mostly attributable to the interactiveentertainment company acquired in the fourth quarter of 2020.


Our revenues increased by 3% from US$1,718.5 million in 2018 to US$1,766.9 million in2019. We faced various challenges in 2019, such as the unfavorable impact from the overalldepreciation of RMB against the U.S. dollar in 2019 compared to 2018, tightened regulationson certain industries, intensified market competition and so on.

• Advertising and marketing revenues. Advertising and marketing revenues increased by2% from US$1,499.2 million in 2018 to US$1,530.2 million in 2019. Mobile advertisingrevenues accounted for approximately 87% of our total advertising and marketingrevenues in 2019, compared to 83% in 2018, benefiting from the growth of both mobileusers as well as advertiser preferences. The total number of advertisers was 2.4 millionin 2019, compared to 2.9 million in 2018, mainly due to customer churn of SMEcustomers, as a result of mixed challenges from unfavorable macroeconomic conditionsand intense market competition. The average spending per advertiser (excluding Alibaba)increased by 26% from US$470 in 2018 to US$593 in 2019, primarily attributable to theincrease in spending by our recurring customers, and also a reflection of the churn ofSME customers with relatively lower advertising budgets.

Revenue from key accounts grew by 8% from US$674.0 million in 2018 to US$729.3million in 2019, largely attributable to the strong bond between Weibo and brandadvertising customers, as Weibo demonstrated unique value proposition for customerswith our differentiated social advertising offerings and enhanced ad performance.

Revenue from SMEs decreased slightly by 1% from US$707.5 million in 2018 toUS$703.2 million in 2019, primarily attributable to the unfavorable impact from theoverall depreciation of RMB against the U.S. dollar in 2019 compared to 2018. We alsofaced unfavorable supply and demand dynamics in the performance-based advertisingmarket and consequently intensified market competition.


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Revenue generated from Alibaba decreased by 17% from US$117.7 million in 2018 toUS$97.8 million in 2019. The expenditure from Alibaba on Weibo’s platform highlycorrelates to its marketing strategies, which may fluctuate on an annual basis. Weiboremains a key platform for Alibaba in the fields of social marketing, e-commerce and faneconomy.

• Value-added services revenues. Value-added services revenues increased by 8% fromUS$219.3 million in 2018 to US$236.7 million in 2019. The increase was primarilyattributable to (i) the revenue growth of our VIP membership, which increased by 10%from US$98.2 million in 2018 to US$108.1 million in 2019 mainly as a result of theincrease of our user base, and (ii) the revenue growth of the Yizhibo live streamingbusiness acquired in the fourth quarter of 2018, which increased from US$28.0 million in2018 to US$76.7 million in 2019. Revenues from game-related services decreased by84% from US$27.3 million in 2018 to US$4.4 million in 2019, mainly because somegames had reached the end of their life cycles and a tightened regulatory environment inthis industry.

Costs and Expenses

Our costs and expenses primarily consist of cost of revenues, sales and marketing, productdevelopment, and general and administrative expenses, including costs and expenses allocatedfrom SINA during the periods presented. Cost of revenues primarily consists of costsassociated with the maintenance of our platform, such as bandwidth and other infrastructurecosts, as well as personnel-related expenses, advertisement production cost, stock-basedcompensation, content licensing fees, revenue-share cost, and turnover taxes levied on ourrevenues. Sales and marketing expenses primarily consist of marketing and promotionalexpenses and personnel-related expenses, including commissions, salaries and welfare, andstock-based compensation. Product development expenses primarily consist of personnel-related expenses, stock-based compensation, outside services fees, and infrastructure costincurred for new product development, product enhancements, and back-end systems. Generaland administrative expenses primarily consist of personnel-related expenses, stock-basedcompensation, professional services fees, and provision of allowance for credit losses.

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020

Our costs and expenses increased by 34% from US$546.6 million in the six months ended June30, 2020 to US$731.5 million in the six months ended June 30, 2021, primarily due to highermarketing expense and personnel-related cost.

• Cost of Revenues. Cost of revenues increased by 25% from US$137.7 million in the sixmonths ended June 30, 2020 to US$172.3 million in the six months ended June 30, 2021.The increase was primarily due to an increase of US$13.2 million in labor cost, anincrease of US$9.2 million in advertisement production cost, an increase of US$6.1million in revenue share cost, and an increase of US$5.6 million in turnover taxes.

• Sales and Marketing. Sales and marketing expenses increased by 41% from US$211.2million in the six months ended June 30, 2020 to US$298.4 million in the six monthsended June 30, 2021. The increase was primarily due to an increase of US$62.9 millionin marketing spend and promotional activities as we enhanced our marketing efforts afterthe COVID-19 became gradually contained in China, and an increase of US$21.5 millionin personnel-related expenses primarily due to an increase in our sales and marketing staffheadcount.


– 241 –

• Product Development. Product development expenses increased by 32% from US$150.4million in the six months ended June 30, 2020 to US$198.0 million in the six monthsended June 30, 2021. The increase was primarily due to an increase of US$29.7 millionin personnel-related expenses and an increase of US$3.8 million in stock-basedcompensation as we increased our research and development staff headcount, and anincrease of US$8.3 million in amortization of intangible assets mostly attributable to theacquisitions of JM Tech and the developer of Wuta beauty camera app.

• General and Administrative. General and administrative expenses increased by 33% fromUS$47.3 million in the six months ended June 30, 2020 to US$62.9 million in the sixmonths ended June 30, 2021. The increase was primarily due to the increase of US$24.0million in personnel-related expenses mainly driven by an increase in general andadministrative staff headcount, and an increase of US$3.1 million in professional servicesfees. The increase was partially offset by a decrease of US$14.8 million in provision ofallowance for credit losses as the outbreak of COVID-19 in 2020 adversely impacted thecollection of our accounts receivable.


Our costs and expenses increased slightly by 1% from US$1,169.3 million in 2019 toUS$1,183.1 million in 2020.

• Cost of Revenues. Cost of revenues decreased by 8% from US$328.8 million in 2019 toUS$302.2 million in 2020. The decrease was largely due to the decline of US$34.1million in turnover taxes mainly resulting from the exemption of payment of culturalbusiness construction fees applicable to the advertising industries for the fiscal year of2020, and a decrease of US$20.1 million in revenue share cost primarily caused by thedecline in live streaming revenue. The decrease was partially offset by an increase ofUS$17.0 million in advertisement production cost, and an increase of US$10.0 million inlabor cost. We expect our cost of revenues to increase in absolute amount in theforeseeable future.

• Sales and Marketing. Our sales and marketing expenses decreased by 2% from US$465.3million in 2019 to US$455.6 million in 2020. The decrease was mostly from a reductionof US$21.4 million in marketing spend and promotional activities during the COVID-19pandemic, partially offset by an increase of US$9.4 million in personnel-related expense,mainly driven by an increase in employee headcount. We expect our sales and marketingexpenses to increase in absolute amount in the foreseeable future.

• Product Development. Our product development expenses increased by 14% fromUS$284.4 million in 2019 to US$324.1 million in 2020. The increase was primarilyattributable to a growth of US$22.7 million in personnel-related expenses arising from alarger product development team and higher salaries, and an increase of US$11.2 millionin infrastructure cost. We expect our product development expenses to increase inabsolute amount in the foreseeable future.

• General and Administrative. Our general and administrative expenses increased by 12%from US$90.7 million in 2019 to US$101.2 million in 2020, largely resulting from anincrease of US$14.6 million in provision of allowance for credit losses. We expect ourgeneral and administrative expenses to increase in absolute amount in the foreseeablefuture.


– 242 –


Our costs and expenses increased by 5% from US$1,109.3 million in 2018 to US$1,169.3million in 2019.

• Cost of Revenues. Cost of revenues increased by 18% from US$277.6 million in 2018 toUS$328.8 million in 2019. The increase was largely due to an increase of US$36.1million in live streaming revenue sharing cost, an increase of US$11.0 million in laborcost, an increase of US$8.6 million in bandwidth expenditure, and an increase of US$3.8million in advertisement production cost, partially offset by a decrease of US$12.0million in turnover taxes mainly due to the reduction of cultural construction feesapplicable to our advertising and marketing revenues from a rate of 3% to 1.5% since July1, 2019.

• Sales and Marketing. Our sales and marketing expenses decreased by 12% fromUS$527.4 million in 2018 to US$465.3 million in 2019. The decrease was mostly due toa decrease of US$76.5 million in channel marketing spend and promotional activities dueto a more disciplined channel investment, partially offset by an increase of US$6.7million in personnel-related expense, primarily due to higher commissions arising fromhigher revenue achievements and an increase of US$5.3 million in outside labor cost.

• Product Development. Our product development expenses increased by 14% fromUS$249.9 million in 2018 to US$284.4 million in 2019. The increase was mainlyattributable to an increase of US$12.4 million in personnel-related expenses arising fromhigher salaries, an increase of US$7.4 million in stock-based compensation, an increaseof US$6.7 million in outside labor cost and an increase of US$6.6 million in infrastructurecost.

• General and Administrative. Our general and administrative expenses increased by 107%from US$43.8 million in 2018 to US$90.7 million in 2019, mostly resulting from anincrease of US$32.3 million in bad debt expenses due to slower collection of accountsreceivable from customers in 2019 because of the unfavorable macroeconomicenvironment, an increase of US$8.1 million in stock-based compensation and an increaseof US$6.8 million in professional services.

Investment Related Impairment

We perform impairment assessments of our investments and determine if an investment isimpaired due to changes in quoted market price or other impairment indicators. For a detaileddescription of accounting treatment of our investment related impairment and the performanceof the investments, see “— Critical Accounting Policies and Estimates.” We recorded US$24.1million, US$249.9 million, US$212.0 million and US$66.6 million in investment relatedimpairment charges in 2018, 2019, 2020 and six months ended June 30, 2021, respectively, asthe investments were not performing to expectations or had become incapable of makingrepayments. The investment impairment in 2018 included a US$11.9 million write-off on anonline-reading business and a US$9.7 million write-off on a company operating in gamebusiness, while that of 2019 mainly included the partial impairment charge of US$214.7million on investment in Yixia Tech. The investment related impairment in 2020 mainlyincluded a partial impairment of US$59.8 million on an investee in e-commerce business, aUS$39.3 million write-off on a game company, and a US$82.2 million impairment charge onloans to investees, due to their unsatisfied financial performance with no obvious upturn orpotential financing solutions in the foreseeable future. The impairment charge for the sixmonths ended June 30, 2021 was mainly due to a partial impairment of US$59.4 million oninvestment in Yixia Tech due to its unsatisfied financial performance with no obvious upturnor potential financing solutions in the foreseeable future.


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Interest Income and Interest Expense

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020

Compared to the interest expense for the six months ended June 30, 2020, the increase ininterest expense for the six months ended June 30, 2021 was due to the 2030 Notes issued inJuly 2020.


The increase in interest expense was mainly caused by the interest expense arising from our2024 Notes issued in July 2019 and 2030 Notes issued in July 2020.


The increase in interest income was mostly resulting from the loans to other related parties anda higher balance of cash, cash equivalents and short-term investments. The increase in interestexpense was mainly due to the interest expense arising from our 2024 Notes issued in July2019.

Provision of Income Taxes

The following table sets forth the current and deferred portion of income tax expense of theCompany and the effective tax rate for China operations:


Ended June 30,

2018 2019 2020 2020 2021

(Unaudited)(in US$ thousands, except percentage)

Income before income taxexpenses �� 668,842 602,397 375,913 306,631 191,805

Less: Income (loss) fromnon-China operations �� (43,266) (106,256) (57,031) 79,717 (163,411)

Income from Chinaoperations �� 712,108 708,653 432,944 226,914 355,216

Income tax expensesapplicable to Chinaoperations �� 96,222 88,091 58,464 43,331 66,130

Income tax expenses(benefits) applicable tonon-China operations �� — 21,473 2,852 13,296 (4,275)

Total income taxexpenses �� 96,222 109,564 61,316 56,627 61,855

Effective tax rate forChina operations�� 13.5% 12.4% 13.5% 19.1% 18.6%


– 244 –

Income tax expenses were US$61.9 million in the six months ended June 30, 2021, comparedto US$56.6 million in the six months ended June 30, 2020. The increase in income tax expensesprimarily resulted from the profit growth from China operations for the six months ended June30, 2021, partially offset by decrease of deferred taxes charges related to fair value change ofinvestments from non-China operations.

We recorded income taxes of US$96.2 million, US$109.6 million and US$61.3 million in 2018,2019 and 2020, respectively, including a US$2.9 million deferred tax charge from the fair valuechange of investments by our non-China operations in 2020. The provision for income taxesfor China operations differs from the amounts computed by applying the statutory EIT ratemostly due to the preferential tax treatment that Weibo Technology enjoyed as a qualified“software enterprise” or “high and new technology enterprise” during the periods presented, aswell as the preferential tax treatment of “key software enterprise” status of 2017 to 2019benefited by the WFOE one year in arrears during the three-year period ended December 31,2020. Weibo Technology was entitled to a tax reduction of US$77.2 million, US$83.2 millionand US$55.1 million for 2018, 2019 and 2020, respectively. The WFOE further recognizedpreferential tax treatment of “key software enterprise” status and tax benefit of research anddevelopment super deduction of US$11.7 million for 2017 in 2018, US$21.5 million for 2018in 2019, and US$26.6 million for 2019 in 2020.

Income (loss) from non-China operations mainly included stock-based compensation, fairvalue changes through earnings on investments and investment related impairment recorded byour non-China subsidiaries. We recorded fair value change gain of US$210.2 million in 2019,which was mainly generated by Beijing Showworld Technology Co., Ltd., one of our investees,who completed its listing on Shanghai Stock Exchange through an equity reconstruction witha then-listed company at the end of 2019. We recorded investment related impairment ofUS$233.9 million in 2019 mainly due to the partial write off of US$214.7 million to thecarrying value of Yixia Tech Co., Ltd.

LIQUIDITY AND CAPITAL RESOURCES



Ended June 30,

2018 2019 2020 2020 2021


Net cash provided by operatingactivities �� 488,007 631,653 741,646 185,264 338,357

Net cash used in investing activities �� (254,032) (1,201,358) (1,214,315) (154,782) (162,508)Net cash provided by (used in) financing

activities �� (1,415) 791,869 741,963 1,625 226Effect of exchange rate changes on cash

and cash equivalents �� 1,083 (3,775) 92,565 (12,841) 14,187

Net increase in cash and cashequivalents �� 233,643 218,389 361,859 19,266 190,262

Cash and cash equivalents at thebeginning of the year/period �� 1,000,953 1,234,596 1,452,985 1,452,985 1,814,844

Cash and cash equivalents at theend of the year/period �� 1,234,596 1,452,985 1,814,844 1,472,251 2,005,106


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As of December 31, 2018, 2019, 2020 and June 30, 2021, our total cash, cash equivalents andshort-term investments were US$1,825.9 million, US$2,404.2 million, US$3,496.9 million andUS$2,935.9 million, respectively. Our principal sources of liquidity have been net proceedsfrom cash from operations and issuance of unsecured senior notes.

The decrease in our cash, cash equivalents and short-term investments as of June 30, 2021compared to that of December 31, 2020 was primarily due to cash paid to investments ofUS$960.4 million, loan to SINA of US$310.9 million, and prepayment for purchase of SINAPlaza of US$132.5 million, partially offset by US$338.4 million in cash provided by operatingactivities, proceeds from the disposal of and refund from investments of US$168.3 million andrepayment of loan by SINA of US$388.4 million. As of June 30, 2021, our consolidated entitieswithin China held US$1,466.0 million of cash, cash equivalents and short-term investments,including US$340.2 million held by our VIEs and the subsidiaries of VIEs. The remaining cashand short-term investments balance of US$1,469.9 million was held by our entities outsideChina.

The increase in our cash, cash equivalents and short-term investments as of December 31, 2020compared to that of December 31, 2019, was primarily due to US$741.6 million in cashprovided by operating activities, net proceeds from the issuance of 2030 Notes of US$740.3million and proceeds from the disposal of and refund from investments of US$289.6 million,partially offset by net cash paid to investments of US$392.5 million, net loans to SINA ofUS$292.1 million, and net cash paid for acquisitions of US$214.3 million. As of December 31,2020, our consolidated entities within China held US$1,663.4 million of cash, cash equivalentsand short-term investments, including US$445.2 million held by our VIEs and the subsidiariesof VIEs. The remaining cash and short-term investments balance of US$1,833.5 million washeld by our entities outside China.

The increase in our cash, cash equivalents and short-term investments as of December 31, 2019compared to that of December 31, 2018, was primarily due to US$631.7 million in cashprovided by operating activities and net proceeds from the issuance of 2024 Notes of US$793.3million, partially offset by cash paid to investees of US$688.9 million and net loans to SINAof US$190.3 million. Of the US$2,404.2 million in cash, cash equivalents and short-terminvestments as of December 31, 2019, our consolidated entities within China held US$952.0million, including US$99.5 million held by our VIEs and subsidiaries of VIEs. The remainingcash and short-term investments balance of US$1,452.2 million was held by our entitiesoutside China.

Our accounts receivable primarily include amounts due in one year or less from advertisingcustomers. Our accounts receivable turnover days, which are the average accounts receivablebalances as of the beginning and the end of the period divided by total revenues during theperiod and multiplied by the number of days during the period, were 56 days in 2018, 81 daysin 2019, 97 days in 2020, and 98 days for the six months ended June 30, 2021. As of August31, 2021, US$116.1 million, or 17%, of the total accounts receivable as of June 30, 2021 hadbeen settled.

We believe that our current cash, cash equivalents and short-term investments balance issufficient to fund our operating activities, capital expenditures and other obligations for at leastthe next twelve months. However, we may decide to enhance our liquidity position or increaseour cash reserve for future expansions and acquisitions through additional capital and/orfinance funding. The issuance and sale of additional equity would result in further dilution toour shareholders. The incurrence of indebtedness would result in increased fixed obligationsand could result in operating covenants that would restrict our operations. We cannot assureyou that financing will be available in amounts or on terms acceptable to us, if at all.


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In utilizing the cash that we hold offshore, we may (i) make additional capital contributions toour PRC subsidiaries, (ii) establish new PRC subsidiaries and make capital contributions tothese new PRC subsidiaries, (iii) make loans to our PRC subsidiaries, or (iv) acquire/invest inoffshore entities with business operations in China in offshore transactions. However, most ofthese uses are subject to PRC regulations and/or approvals. For example, loans by us to ourPRC subsidiaries, which are foreign-invested enterprises, to finance their activities cannotexceed statutory limits and must be registered with SAFE or its local branches. See“Regulatory Overview — Regulations on Foreign Exchange.”

Substantially all of our future revenues are likely to continue to be in the form of RMB. Underexisting PRC foreign exchange regulations, payments of current account items, including profitdistributions, interest payments and trade and service-related foreign exchange transactions,can be made in foreign currencies without prior SAFE approval as long as certain routineprocedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to paydividends in foreign currencies to us without prior SAFE approval by following certain routineprocedural requirements. However, approval from or registration with competent governmentauthorities is required where the RMB is to be converted into foreign currency and remitted outof China to pay capital expenses such as the repayment of loans denominated in foreigncurrencies. The PRC government may at its discretion restrict access to foreign currencies forcurrent account transactions in the future. See “Risk Factors — Risks Relating to DoingBusiness in the People’s Republic of China — Restrictions on the remittance of RMB into andout of China and governmental control of currency conversion may limit our ability to paydividends and other obligations, and affect the value of your investment.”

Operating Activities

Net cash provided by operating activities amounted to US$338.4 million for the six monthsended June 30, 2021, which consists of our net income of US$130.0 million as adjusted fornon-cash items and the effects of changes in operating assets and liabilities. Adjustments fornon-cash items primarily include a net loss of US$69.5 million in fair value changes throughearnings on investments, a non-cash investment related impairment of US$66.6 million, acharge of US$36.2 million in stock-based compensation, and a charge of US$26.0 million indepreciation and amortization. The principal items accounting for the changes in operatingassets and liabilities include an increase of US$164.6 million in accrued and other liabilities,partially offset by an increase of US$162.5 million in accounts receivable due from thirdparties, an increase of US$16.7 million in amount due from SINA, and a decrease of US$14.7million in income tax payable.

Net cash provided by operating activities amounted to US$185.3 million for the six monthsended June 30, 2020, which consisted of our net income of US$250.0 million as adjusted fornon-cash items and the effects of changes in operating assets and liabilities. Adjustments fornon-cash items primarily include a charge of US$30.2 million stock-based compensation, acharge of US$25.2 million of provision of allowance for credit losses, a charge of US$13.7million depreciation and amortization, and a charge of US$12.7 million deferred income taxes,partially offset by a net gain of US$117.5 million fair value changes through earnings oninvestments. The principal items accounting for the changes in operating assets and liabilitiesinclude an increase of US$51.1 million in deferred revenues and a decrease of US$33.7 millionin accounts receivable due from other related parties, partially offset by an increase of US$23.9million in prepaid and other current assets, a decrease of US$22.5 million in income taxpayable, a decrease of US$21.0 million in accrued and other liabilities, a decrease of US$20.3million in accounts payable, and an increase of US$16.3 million in accounts receivable duefrom Alibaba.


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Net cash provided by operating activities in 2020 was US$741.6 million. The differencebetween net cash provided by operating activities and our net income of US$314.6 million in2020 was primarily due to a non-cash investment related impairment of US$212.0 million, anda decrease of US$148.9 million in amount due from SINA, a non-cash charge of US$67.1million of stock-based compensation, a charge of US$53.1 million of provision of allowancefor credit losses, an increase of US$62.4 million in accrued and other liabilities, and a decreaseof US$54.7 million in accounts receivable due from other related parties, partially offset by anincrease of US$75.7 million in accounts receivable due from third parties, an increase ofUS$68.3 million in accounts receivable due from Alibaba, a non-cash gain of US$35.1 millionfrom fair value change of investments, and an increase of US$30.5 million in prepaid expensesand other current assets. The increase in accrued and other liabilities mainly resulted from theincreased payable for sales rebate and personnel-related expenses. The increase in accountsreceivable due from third parties was primarily due to the increase of accounts receivable fromrevenues contributed by key accounts advertisers who are generally postpaid customers.

Net cash provided by operating activities in 2019 was US$631.7 million. The differencebetween net cash provided by operating activities and our net income of US$492.8 million in2019 was primarily due to a non-cash investment related impairment of US$249.9 million, anincrease of US$117.6 million in accrued and other liabilities, a non-cash charge of US$61.3million of stock-based compensation, and an increase of US$38.6 million in provision of baddebt expense, partially offset by a non-cash gain of US$207.4 million from fair value changeof investments, an increase of US$115.1 million in accounts receivable due from third parties,and an increase of US$90.1 million in amount due from SINA. The increase in accountsreceivable due from third parties was primarily due to slower collection of accounts receivableduring 2019. The increase in accrued and other liability was primarily due to the increasedpayable for sales rebate and marketing expenses.

Net cash provided by operating activities in 2018 was US$488.0 million. The differencebetween net cash provided by operating activities and our net income of US$572.6 million in2018 was primarily due to an increase of US$64.3 million in accounts payable, an increase ofUS$55.6 million in accrued and other liabilities, a non-cash charge of US$41.0 million instock-based compensation, and an increase of US$24.4 million in deferred revenues, partiallyoffset by an increase of US$109.7 million in accounts receivable due from third parties, anincrease of US$104.0 million in accounts receivable due from other related parties, an increaseof US$49.4 million in prepaid expenses and other current assets, an increase of US$48.7million in amount due from SINA, and a non-cash gain of US$40.1 million in fair valuechanges through earnings on investments. The increase in accounts receivable in 2018 was inline with our revenue growth. The increase in accounts payable was primarily due to theincreased payable for infrastructure cost, and revenue share payable for live streamingbusiness. The accrued and other liabilities increased in 2018 primarily due to the increasedpayable for sales rebate.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2021 was US$162.5million. This was primarily attributable to cash paid on long-term investments of US$960.4million, purchases of bank time deposits and wealth management products of US$501.9million, prepayment for purchase of SINA Plaza of US$132.5 million, net cash paid foracquisitions of US$51.9 million, partially offset by maturities of bank time deposits and wealthmanagement products of US$1,253.8 million, proceeds from the disposal and refund ofprepayment on long-term investments of US$168.3 million, and net repayment of loan bySINA of US$77.4 million.


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Net cash used in investing activities for the six months ended June 30, 2020 was US$154.8million. This was primarily attributable to purchases of short-term investments of US$793.8million, cash paid on long-term investments of US$257.5 million, net loan to SINA of US$41.5million and purchase of property and equipment of US$15.8 million, partially offset bymaturity of short-term investments of US$891.6 million and proceeds from the disposal andrefund of long-term investments of US$62.1 million.

Net cash used in investing activities in 2020 was US$1,214.3 million. This was mainly due topurchases of short-term investments of US$3,170.3 million, cash paid on long-terminvestments of US$392.5 million, net loans to SINA of US$292.1 million, and net cash paidfor acquisitions of US$214.3 million, partially offset by the maturity of short-term investmentsof US$2,600.0 million and proceeds from the disposal and refund of long-term investments ofUS$289.6 million.

Net cash used in investing activities in 2019 was US$1,201.4 million. This was primarily dueto purchases of short-term investments of US$1,230.6 million, cash paid on long-terminvestments of US$688.9 million, net loans to SINA of US$190.3 million, and purchases ofproperty and equipment of US$21.7 million, partially offset by the maturity of short-terminvestments of US$869.8 million and proceeds from the disposal and refund of long-terminvestments of US$60.3 million.

Net cash used in investing activities in 2018 was US$254.0 million. This was primarily due topurchases of short-term investments of US$1,792.5 million, cash paid on long-terminvestments of US$419.1 million, net loans to SINA of US$48.4 million, cash paid for theacquisition of Yizhibo live streaming business of US$40.0 million, and purchases of propertyand equipment of US$28.4 million, partially offset by the maturity of short-term investmentsof US$1,989.1 million and proceeds from the disposal and refund of long-term investments ofUS$85.1 million.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2021 was US$0.2million, which consisted of proceeds from the exercise of employee stock options.

Net cash provided by financing activities for the six months ended June 30, 2020 was US$1.6million, which mainly consisted of proceeds from the sale of a subsidiary’s equity interest toa non-controlling shareholder.

Net cash provided by financing activities in 2020 was US$742.0 million. This mainly consistedof net proceeds of US$740.3 million from the issuance of 2030 Notes and a receipt of US$1.5million from the sale of a subsidiary’s equity interest to non-controlling shareholders.

Net cash provided by financing activities in 2019 was US$791.9 million. This primarilyconsisted of net proceeds of US$793.3 million from the issuance of 2024 Notes and waspartially offset by a payment of US$1.7 million to purchase a subsidiary’s non-controllingequity.

Net cash used in financing activities in 2018 was US$1.4 million. This primarily consisted ofa repayment of US$2.0 million to SINA, partially offset by the proceeds from the exercise ofemployee stock options of US$0.8 million.


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The loans from SINA were presented under cash flow from financing activities, whereas theloans to SINA were presented under investing activities in the consolidated statements of cashflows. Cash payment for billings from SINA for costs and expenses allocated was presentedunder operating activities in the consolidated statements of cash flows.

CAPITAL EXPENDITURES

Our capital expenditures primarily consist of purchases of servers, computers, and other officeequipment. Our capital expenditures were US$28.4 million in 2018, US$21.7 million in 2019,US$34.8 million in 2020 and US$15.5 million for the six months ended June 30, 2021. We willcontinue to make capital expenditures to meet the expected growth of our business and weintend to fund these purchases in the future with existing cash balance.

HOLDING COMPANY STRUCTURE

Weibo Corporation is a holding company that conducts its operations primarily through WeiboTechnology, our VIEs and their subsidiaries, all of which are incorporated in China. As a result,our ability to pay dividends depends upon dividends paid to us by Weibo Technology, our PRCsubsidiary. If Weibo Technology or any newly formed subsidiaries of our company incur debton their own behalf in the future, the instruments governing their debt may restrict their abilityto pay dividends to us. In addition, Weibo Technology is permitted to pay dividends to us onlyout of its retained earnings, if any, as determined in accordance with PRC accounting standardsand regulations. Under the PRC law, each of our PRC subsidiaries, our VIEs and theirsubsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fundcertain statutory reserve funds until such reserve funds reach 50% of its registered capital. Inaddition, each of our PRC subsidiaries, our VIEs and their subsidiaries may allocate a portionof its after-tax profits based on PRC accounting standards to staff welfare and bonus funds, adiscretionary surplus fund and an enterprise expansion fund at its discretion or in accordancewith its articles of association. These reserve funds and staff welfare and bonus funds are notdistributable as cash dividends. As of December 31, 2020 and June 30, 2021, the amountrestricted, including paid-in capital, as determined in accordance with PRC accountingstandards and regulations, was US$451.7 million and US$450.3 million, respectively. AlthoughWeibo Technology has generated accumulated profits in 2020 and for the six months endedJune 30, 2021, it has not paid dividends in the past and currently has no intention to pay anydividend. We plan to reinvest most, if not all, of its profits, into our PRC operations for thefuture development and growth of our business.

INFLATION

In the past three years, inflation in China did not materially impact our results of operations.According to the National Bureau of Statistics of China, the consumer price index for 2018,2019 and 2020 increased by 2.1%, 2.9% and 2.5%, year over year, respectively. Although wehave not been materially affected by inflation in the past, we may be affected by inflation inthe future if the inflation rate in China increases.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based uponour consolidated financial statements, which have been prepared in accordance with U.S.GAAP, appearing elsewhere in this document. The preparation of these consolidated financialstatements requires us to make estimates, judgments and assumptions that affect the reportedamounts of assets, liabilities, revenues and expenses, and related disclosure of contingentassets and liabilities. We evaluate these estimates, judgments and assumptions on an ongoingbasis.


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Our estimates are based on historical experience and various other assumptions that we believeto be reasonable under the circumstances. These estimates form the basis for our judgmentsabout the carrying values of assets and liabilities that are not readily apparent from othersources. Actual results may differ materially from such estimates under different assumptionsor conditions.

We believe the following critical accounting policies affect the more significant judgments andestimates used in the preparation of our consolidated financial statements.

Basis of presentation and use of estimates

Basis of Presentation

The preparation of our consolidated financial statements is in conformity with U.S. GAAP. Theconsolidated financial statements include the accounts of our company, our wholly-ownedsubsidiaries, our variable interest entities and their subsidiaries. All significant intercompanybalances and transactions have been eliminated.

Use of Estimates

Conformity with U.S. GAAP requires the use of estimates and judgments that affect thereported amounts in the consolidated financial statements and accompanying notes. Theseestimates form the basis for judgments we make about the carrying values of the assets andliabilities, which are not readily apparent from other sources. U.S. GAAP requires makingestimates and judgments in several areas, including, but not limited to, the basis ofconsolidation, revenue recognition, fair value accounting, income taxes, goodwill and otherlong-lived assets, allowances for credit losses, stock-based compensation, the estimated usefullives of assets, convertible debt, business combination, and foreign currency. We base theestimates and judgments on historical information and on various other assumptions that webelieve are reasonable under the circumstances. Actual results could differ materially fromsuch estimates.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09,“Revenue from Contracts with Customers (Topic 606).” We adopted the new revenue guidancesince January 1, 2018.

Under ASC 606, revenues are recognized when control of the promised goods or services istransferred to customers in an amount that reflects the consideration we expect to be entitledto in exchange for those goods or services. We identify the contracts with customers and allperformance obligations within those contracts. We then determine the transaction price andallocate the transaction price to the performance obligations within the contracts withcustomers, recognizing revenue when, or as, we satisfy our performance obligations.

We do not believe that significant management judgments are involved in revenue recognition,but the amount and timing of our revenues could be different for any period if managementmade different judgments. Certain customers may receive sales rebates, which are accountedfor as variable consideration. We estimate annual expected revenue volume of each individualagent with reference to their historical results. We recognize revenue for the amount of fees wereceive from our advertisers, after deducting estimated sales rebates and net of value-added tax(“VAT”) under ASC 606. We believe that there will not be significant changes to our estimatesof variable consideration.


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We enter into contracts with our customers, which may give rise to contract assets (unbilledrevenue) or contract liabilities (deferred revenue). The payment terms and conditions withinthe contracts vary by the type and location of our customers and products or servicespurchased, the substantial majority of which are due in less than one year. Deferred revenuerelated to unsatisfied performance obligations at the end of the period mainly consists of theunamortized balance of customer advance of advertising and marketing services. The deferredrevenues are recognized based on customers’ consumption or amortized on a straight-line basisthrough the service period for different products/services. Due to the generally short-termduration of the contracts, the majority of the performance obligations are satisfied in thefollowing reporting period.

Practical Expedients and Exemptions. We generally expense sales commissions when incurredbecause the amortization period is generally one year or less. These costs are recorded withinsales and marketing expenses.

Advertising and Marketing Revenues. Advertising and marketing revenues are derivedprincipally from online advertising, including social display ads and promoted marketing.Social display ad arrangements allow customers to place advertisements on particular areas ofour platform or website in particular formats and over particular periods of time, which istypically no more than three months. We enter into cost per mille (“CPM”), or cost perthousand impressions, advertising arrangements with the customers, under which we recognizerevenues based on the number of times that the advertisement has been displayed. We also enterinto cost per day (“CPD”) advertising arrangements with customers, under which we recognizerevenues ratably over the contract periods. Promoted marketing arrangements are primarilypriced based on CPM. Under the CPM model, customers are obligated to pay when theadvertisement is displayed. Our majority revenue transactions are based on standard businessterms and conditions, which are recognized net of agency rebates. The agency rebates areaccounted for as variable consideration and are estimated during interim periods based onestimated annual revenue volume of each individual agent with reference to their historicalresults, which involves accounting judgment. We believe our estimation approach in variableconsideration results in revenue recognition in a manner consistent with the underlyingeconomics of the transaction.

Our contracts with customers may include multiple performance obligations, which primarilyconsist of combinations of services to allow customers to place advertisements on differentareas of our platform or website. For such arrangements, advertising arrangements involvingmultiple deliverables are broken down into single-element arrangements based on theirstand-alone selling price for revenue recognition purposes. The estimation of stand-aloneselling price involves significant judgment, especially for the deliverables that have not beensold separately. For those deliverables, we determine the best estimate of the stand-aloneselling price by taking into consideration the pricing of advertising areas of our platform orwebsite with similar popularities and advertisements with similar formats and quoted pricesfrom competitors and other market conditions. We believe our estimation approach instand-alone selling price and allocation of the transaction price on a relative stand-alone sellingprice to each performance obligation results in revenue recognition in a manner consistent withthe underlying economics of the transaction and the allocation principle included in ASC 606.Revenues recognized with reference to best estimation of selling price were immaterial for allperiods presented. Most of such contracts have all performance obligations completed withinone year. Changes in judgments on these assumptions and estimates could materially impactthe timing or amount of revenue recognition. Contracts with customers of online advertisingmay require cooperation from third parties. We pay a predetermined portion of revenues weearned from advertising contracts to the third parties such as key opinion leaders who


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participate in advertising and promotion activities by monetizing their social assets. We havedetermined that we are the principal in these transactions, as we are primarily responsible forfulfilling all of the obligations related to advertising contracts. We have discretion inestablishing the pricing of the contracts and control the advertising inventory before thedelivery to customers. We record revenues derived from such contracts on a gross basis and theportion paid to the third parties is recognized as the cost of revenues.

Revenues from barter transactions are recognized during the period in which theadvertisements are displayed on our properties. Barter transactions in which physical goods orservices are received in exchange for advertising services are recorded based on the fair valuesof the goods or services received.

Value-added Services Revenues. We generate value-added services revenues principally fromfee-based services, mainly including VIP membership, live streaming, and game-relatedservices. Revenues from these services are recognized when control of the promised servicesis transferred to customers, in an amount that reflects the consideration we expect to be entitledto in exchange for those services.

VIP membership mainly includes a service package consisting of one performance obligationof providing user certification and preferential benefits, such as daily priority listings andhigher quota for following user accounts. Prepaid VIP membership fees are recorded asdeferred revenue and recognized as revenue ratably over the contract period of the membershipservice.

Live streaming generates revenue from sales of virtual items on the Yizhibo platform. Userscan access the platform and view the live streaming content and interact with the broadcastersfor free. We design, create and offer various virtual items for sales to users with pre-determinedselling price. Each virtual item is considered as a distinctive performance obligation. Salesproceeds are recorded as deferred revenue and recognized as revenue based on the consumptionof the virtual items. Users can purchase and present virtual items to broadcasters to showsupport for their favorite ones. Under the arrangements with broadcasters or broadcasteragencies, we share with them a portion of the revenues derived from the consumption of virtualitems. Revenues derived from the sale of virtual items are recorded on a gross basis as we havedetermined that we act as the principal to fulfill all obligations related to the live streamingservices. The portion paid to broadcasters and/or broadcaster agencies is recognized as the costof revenues. We do not have further obligations to the user after the virtual items are consumed.

Game-related revenues are mostly generated from the purchase of virtual items by gameplayers through our platform, including items, avatars, skills, privileges or other in-gameconsumables, features or functionality, within the games. Our performance obligation is toprovide ongoing game services to players who purchased virtual items to gain an enhancedgame-playing experience. Each virtual item is considered as a distinctive performanceobligation. We collect payments from the game players in connection with the sale of virtualcurrency, which can be used to purchase virtual items in online games.

For games co-operated with third party developers, revenue is recorded on a gross basis forgames for which we are acting as the principal in fulfilling all obligations related to the games,and revenue is recorded net of predetermined revenue sharing with the game developers forgames for which we are not acting as the principal in fulfilling all obligations.


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Sales of virtual currencies are recognized as revenues over the estimated lifespans of in-gamevirtual items. The estimated lifespans of different virtual items are determined by themanagement based on either the expected user relationship periods or the stipulated period ofvalidity of the relevant virtual items depending on the respective term of virtual items. Virtualcurrency sold for game-related services in excess of recognized revenues is recorded asdeferred revenues.

Stock-based compensation

All stock-based awards to employees and directors, such as stock options and restricted shareunits (“RSUs”), are measured at the grant date based on the fair value of the awards.Stock-based compensation, net of forfeitures, is recognized as expenses on a straight-line basisover the requisite service period, which is the vesting period.

We use the Black-Scholes option pricing model to estimate the fair value of stock options. Thedetermination of estimated fair value of stock-based payment awards on the grant date usingan option pricing model is affected by the fair value of our ordinary shares as well asassumptions regarding a number of complex and subjective variables. These variables includethe expected value volatility of us over the expected term of the awards, actual and projectedemployee stock option exercise behaviors, a risk-free interest rate and expected dividends, ifany. Options granted generally vest over four years.

We recognize the estimated compensation cost of restricted share units based on the fair valueof the corresponding ordinary shares on the date of the grant. We recognize the compensationcost, net of estimated forfeitures, over a vesting term of generally four years for service-basedrestricted share units. We also recognize the compensation cost of performance-based restrictedshare units, net of estimated forfeitures, if it is probable that the performance condition will beachieved at the end of each reporting period.

Forfeitures are estimated at the time of grant and revised in subsequent periods if actualforfeitures differ from those estimates. We use historical data to estimate the pre-vesting optionand record stock-based compensation expense only for those awards that are expected to vest.

Taxation

Income Taxes. Income taxes are accounted for using the asset and liability approach. Under thisapproach, income tax expense is recognized for the amount of taxes payable or refundable forthe current year. In addition, deferred tax assets and liabilities are recognized for the expectedfuture tax consequences of temporary differences between the financial reporting and tax basesof assets and liabilities and for operating losses and tax credit carry forwards. We record avaluation allowance to reduce deferred tax assets to an amount for which realization is morelikely than not.

Uncertain Tax Positions. To assess uncertain tax positions, we apply a more likely than notthreshold and a two-step approach for the tax position measurement and financial statementrecognition. Under the two-step approach, the first step is to evaluate the tax position forrecognition by determining if the weight of available evidence indicates that it is more likelythan not that the position will be sustained, including the resolution of related appeals orlitigation processes, if any. The second step is to measure the tax benefit as the largest amountthat is more than 50% likely of being realized upon settlement.


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Credit Losses

In 2016, the FASB issued ASC Topic 326, which amends previously issued guidance regardingthe impairment of financial instruments by creating an impairment model that is based onexpected losses. The guidance is applicable to accounts receivable and was adopted on January1, 2020. Accounts receivable are recorded at the original amount less an allowance for anypotential uncollectible amounts. The management makes estimates of expected credit andcollectability trends for the allowance for credit losses based upon the assessment of variousfactors, including historical experience, the age of the accounts receivable balances, credit-worthiness of the customers, current economic conditions, reasonable and supportableforecasts of future economic conditions, and other factors that may affect its ability to collectfrom the customers. We also provide specific provisions for allowance when facts andcircumstances indicate that the receivable is unlikely to be collected. Expected credit losses arerecorded as general and administrative expenses on the consolidated statements ofcomprehensive income.

ASC Topic 326 is also applicable to the loans to and interest receivable from other relatedparties included in the prepaid expenses and other current assets on the consolidated balancesheets. Our management estimates the allowance for credit losses on loans and interestreceivable not sharing similar risk characteristics on an individual basis, based on lifetimeexpected credit losses of these loans and interest receivable by estimating the loan collectionschedule, then discounting these cash flows to their present values. The key factors consideredwhen determining the above allowances for credit losses include the estimated loan collectionschedule, discount rate, financial condition and performance data of the borrowers andreasonable and supportable performance forecasts.

Short-term Investments

The following table sets forth a breakdown of our short-term investments as of the datesindicated:


June 30,

2018 2019 2020 2021

(in US$ thousands)

Bank time deposits �� 591,269 951,235 1,515,880 750,467Wealth management products�� – – 166,168 180,355

Total short-term investments �� 591,269 951,235 1,682,048 930,822

Short-term investments represent bank time deposits and wealth management products whichare certain deposits with variable interest rates or principal not-guaranteed with certainfinancial institutions. Their original maturities are of greater than three months but less thanone year. In accordance with ASC 825, Financial Instruments, for wealth management productswith the interest rate indexed to performance of underlying assets, we elected the fair valuemethod at the date of initial recognition and carried these investments at fair value. Changesin the fair value are reflected in the consolidated statements of comprehensive income asinterest income.


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Interest income was US$58.0 million, US$85.4 million, US$85.8 million, US$45.6 million andUS$40.1 million for the years ended December 31, 2018, 2019, 2020 and six months endedJune 30, 2020 and 2021, respectively.

Fair Value Measurements

Financial instruments

All financial assets and liabilities are recognized or disclosed at fair value in the consolidatedfinancial statements on a recurring basis. Accounting guidance defines fair value as the pricethat would be received from selling an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. When determining the fairvalue measurements for assets and liabilities required or permitted to be recorded at fair value,we consider the principal or most advantageous market in which we would transact and weconsider assumptions that market participants would use when pricing the asset or liability.

We measure the equity method investments at fair value on a non-recurring basis only if animpairment charge were to be recognized. For those investments without readily determinablefair value, we measure them at fair value when observable price changes are identified or animpairment charge is recognized. The fair values of our privately held investments as disclosedare determined based on the discounted cash flow model using the discount curve of marketinterest rates or based on the similar transaction price in the market directly. The fair valuesof our long-term investments in the equity securities of publicly listed companies are measuredusing quoted market prices. Our non-financial assets, such as intangible assets, goodwill, fixedassets and operating lease assets, would be measured at fair value only if they were determinedto be impaired.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize theuse of observable inputs and minimize the use of unobservable inputs when measuring fairvalue. A financial instrument’s categorization within the fair value hierarchy is based upon thelowest level of input that is significant to the fair value measurement. Accounting guidanceestablishes three levels of inputs that may be used to measure fair value:

• Level 1 applies to assets or liabilities for which there are quoted prices in active marketsfor identical assets or liabilities.

• Level 2 applies to assets or liabilities for which there are inputs other than quoted pricesincluded within Level 1 that are observable for the asset or liability such as quoted pricesfor similar assets or liabilities in active markets; quoted prices for identical asset orliabilities in markets with insufficient volume or infrequent transactions (less activemarkets); or model-derived valuations in which significant inputs are observable or canbe derived principally from, or corroborated by, observable market data.

• Level 3 applies to assets or liabilities for which there are unobservable inputs to thevaluation methodology that are significant to the measurement of the fair value of theassets or liabilities.

The carrying amount of cash and cash equivalents, short-term investments, accounts receivabledue from third parties, accounts receivable due from Alibaba, accounts receivable due fromother related parties, accounts payable, amount due from/to SINA, and accrued and otherliabilities approximates fair value because of their short-term nature.


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Long-Term Investments

Long-term investments comprised of investments in publicly traded companies, privately heldcompanies, and limited partnerships. The following sets forth the changes in our long-terminvestments:

CostMethod/Equity

SecuritiesWithout Readily

DeterminableFair Values Equity Method

Available-for-Sale

Securities/EquitySecurities With

ReadilyDeterminableFair Values Total

(In US$ thousands)

Balance at December 31, 2017 420,356 27,702 4,279 452,337Investments made/transferred from prepayments 134,797 97,337 – 232,134Income (loss) from equity method investments – 57 – 57Dividend received from equity method investments – (657) – (657)Disposal of investments – (1,623) – (1,623)Impairment on investments (23,557) – – (23,557)Fair value change through earnings

(including adjustment of subsequent price changes) 42,877 – (2,803) 40,074Currency translation adjustment (3,854) (325) – (4,179)

Balance at December 31, 2018 570,619 122,491 1,476 694,586Investments made/transferred from prepayments 268,734 91,869 15,017 375,620Income (loss) from equity method investments – (13,198) – (13,198)Dividend received from equity method investments – (932) – (932)Disposal of investments (1,724) (165) – (1,889)Reclassification of equity investment without readily

determinable fair values to those with readilydeterminable fair values (81,385) – 81,385 –

Impairment on investments (230,859) – – (230,859)Fair value change through earnings (including

adjustment of subsequent price changes) 35,838 – 171,600 207,438Currency translation adjustment (2,621) (686) – (3,307)

Balance at December 31, 2019 558,602 199,379 269,478 1,027,459Investments made/transferred from prepayments 134,925 92,925 30,500 258,350Income (loss) from equity method investments – 10,434 – 10,434Dividend received from equity method investments – (320) – (320)Disposal of investments (2,067) – (48,334) (50,401)Impairment on investments (126,820) – – (126,820)Fair value change through earnings (including

adjustment of subsequent price changes) (2,462) – 37,577 35,115Currency translation adjustment 16,906 8,743 – 25,649

Balance at December 31, 2020 579,084 311,161 289,221 1,179,466Investments made/transfers from prepayments 47,957 103,932 – 151,889Income (loss) from equity method investments – 13,605 – 13,605Dividend received from equity method investments – (2,880) – (2,880)Disposal of investments (16,883) – (4,946) (21,829)Changes from measurement alternative to

consolidation (66,415) – – (66,415)Impairment on investments (66,625) – – (66,625)Fair value change through earnings (including

adjustment of subsequent price changes) (26,810) – (42,685) (69,495)Currency translation adjustment 3,150 2,392 – 5,542

Balance at June 30, 2021 453,458 428,210 241,590 1,123,258


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• Equity investments accounted for using the measurement alternative

For investments without readily determinable fair values, we elect to record these investmentsat cost, less impairment, and plus or minus subsequent adjustments for observable pricechanges. Under this measurement alternative, changes in the carrying value of the investmentswill be recognized in consolidated statement of comprehensive income, whenever there areobservable price changes in orderly transactions for the identical or similar investment of thesame issuer. Impairment charges will be recorded when any impairment indicators are notedand the fair value is lower than the carrying value. Our investments made during the TrackRecord Period, mainly included an investment of US$72.7 million in an investee ine-commerce business and an investment of US$21.8 million in a company engaged in creatingand providing unique online cartoon content in 2018, a follow-on investment of US$100.0million in Yixia Tech in 2019, an investment of US$46.8 million in a financing guaranteecompany and an investment of US$30.6 million in a commercial search business in 2020, aswell as a further investment of US$39.5 million in a leading mobile photo and videoapplication in China.

• Equity investments accounted for using equity method

Investments in entities in which we can exercise significant influence and hold an investmentin voting common shares or in-substance common shares (or both) of the investee but in whichwe do not own a majority equity interest or control are accounted for using the equity methodof accounting in accordance with ASC topic 323 (“ASC 323”), Investment – Equity Methodand Joint Ventures. Our investments made during the Track Record Period mainly includedUS$93.0 million investments in two funds in 2018, a US$57.4 million investment in a companyproviding consumer finance services in 2019, several investment funds in 2020 and anadditional investment of US$60.0 million in an investment fund for the six months ended June30, 2021.

• Equity securities with readily determinable fair value

The marketable equity securities were reclassified as investments with readily determinablefair values under ASU 2016-01. Investments in marketable equity securities are valued usingthe market approach based on the quoted prices in active markets at the reporting dates. Weclassify the valuation techniques that use these inputs as Level 1 of fair value measurements.In December 2019, one of the Group’s investees, Beijing Showworld Technology Co., Ltd., acompany providing social and new media marketing services, completed its listing on ShanghaiStock Exchange through an equity reconstruction with a then-listed company. BeforeShowworld’s IPO, the Group accounted for the investment under equity securities withoutreadily determinable fair values and then reclassified it to investments with readilydeterminable fair values the moment it went public. The Group recorded US$2.8 million fairvalue change loss, US$171.6 million fair value change gain, US$37.6 million fair value changegain, US$120.3 million fair value change loss and US$42.7 million fair value change loss,which was unrealized, for the years ended December 31, 2018, 2019, 2020 and six monthsended June 30, 2020 and 2021, respectively.

Pursuant to ASC 321, for equity investments measured at fair value with changes in fair valuerecorded in earnings, we do not assess whether those securities are impaired. At each reportingdate, we make a qualitative assessment of whether the investment is impaired, applyingjudgement in considering various factors and events. If a qualitative assessment indicates thatthe investment is impaired, we estimate the investment’s fair value in accordance with theprinciples of ASC 820. If the fair value is less than the investment’s carrying value, we


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recognize an impairment loss in net income equal to the difference between the carrying valueand fair value. We recognized US$23.6 million, US$230.9 million, US$126.8 million, US$2.5million and US$66.6 million impairment charges to investments without readily determinablefair values for the years ended December 31, 2018, 2019, 2020 and six months ended June 30,2020 and 2021 respectively.

Our main investment strategy is to expand and strengthen our ecosystem to further diversifyour monetization channels. Long-term investments are comprised of investments in publiclytraded companies, privately held companies, and limited partnerships.

Our major investments during the Track Record Period included Beijing ShowworldTechnology Co., Ltd., providing social and new-media marketing services, Xiaoju KuaizhiInc., a mobile transport platform that operates Didi, Yixia Tech Co., Ltd., a developer of mobilevideo apps, Shanghai Benqu Network Technology Co., Ltd, a developer of Wuta beauty cameraapp, and other investees that complement our ecosystem.

The following table sets forth a breakdown of our long-term investments by the type ofcompanies and partnerships as of the dates indicated.


June 30,

2018 2019 2020 2021

(in US$ thousands)

Publicly traded companies �� 1,476 269,478 289,221 241,590Privately held companies �� 574,846 621,195 647,798 530,108Limited Partnerships�� 118,264 136,786 242,447 351,560

Total �� 694,586 1,027,459 1,179,466 1,123,258

We are exposed to risks associated with our long-term investments. We periodically review ourinvestments in publicly traded companies, privately held companies, and limited partnershipsfor impairment. If we conclude that any of these investments is impaired, we will write downthe asset to its fair value and take a corresponding charge to our consolidated statements ofcomprehensive income. For details, see “Risk Factors — Our financial results could beadversely affected by our long-term investments.”

Leases

In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases (Topic842)”, which requires a lessee to recognize assets and liabilities arising from operating leases.A lessee should recognize a liability to make lease payments (the Lease Liability) and aright-of-use asset (the Operating Lease Assets) representing its right to use the underlying assetfor the lease term. For leases with a term of twelve months or less, a lessee is permitted to makean accounting policy choice not to recognize lease assets and lease liabilities. In July 2018, theFASB issued an amendment, ASU 2018-11, which provides another transition method inaddition to the existing transition methods by allowing entities to initially apply the new leasesstandard at the effective date and recognize a cumulative-effect adjustment to the openingbalance of retained earnings in the period of adoption and to not retrospectively adjust priorperiods’ financial statements.


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On January 1, 2019, we have adopted the new lease standard using the transition method byapplying the standard to all leases existing at the date of initial application. We chose to notrecognize lease assets and lease liabilities for leases with a term of twelve months or less, tonot separate non-lease components from lease components, and to not reassess leaseclassification, treatment of initial direct costs, or whether an existing or expired contractcontains a lease according to the practical expedients permitted under the transition method.We did not retrospectively adjust the prior comparative periods. Under the new lease standard,we determine if an arrangement is or contains a lease at inception. Right-of-use assets andliabilities are recognized at the lease commencement date based on the present value ofremaining lease payments over the lease terms. We consider only payments that are fixed anddeterminable at the time of lease commencement.

Long-Lived Assets

Property and equipment

Property and equipment are stated at cost less accumulated depreciation, amortization andimpairment, if any. Depreciation is computed using the straight-line method over the estimateduseful lives of the assets, generally from three to four years for computers and equipment andfive years for furniture and fixtures. Leasehold improvements are amortized over the shorterof the estimated useful lives of the assets or the remaining lease term.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiableassets and liabilities acquired as a result of our acquisitions of interests in our subsidiaries andconsolidated VIE. We assess goodwill for impairment in accordance with ASC Subtopic 350-20(“ASC 350-20”), Intangibles — Goodwill and Other: Goodwill, which requires that goodwillbe tested for impairment at the reporting unit level at least annually and more frequently uponthe occurrence of certain events, as defined by ASC 350-20. U.S. The guidance provides theoption that we may first assess qualitative factors to determine whether it is necessary toperform the quantitative goodwill impairment test, by taking into considerationmacroeconomics, overall financial performance, industry and market conditions and our shareprice. If determined to be necessary, the quantitative impairment test shall be used to identifygoodwill impairment and measure the amount of a goodwill impairment loss to be recognized(if any). Application of a goodwill impairment test requires significant management judgment,including the identification of reporting units, assigning assets and liabilities to reporting units,assigning goodwill to reporting units, and determining the fair value of each reporting unit.Judgment in estimating the fair value of reporting units includes estimating future cash flows,determining appropriate discount rates and making other assumptions. Changes in theseestimates and assumptions could materially affect the determination of fair value for eachreporting unit. During 2018, impairment indicators were identified by us for the game relatedreporting unit including adversely policy change on game industry and failure to meetforecasted financial performance supporting the goodwill without prospect of future recovery.We fully impaired the goodwill arising from acquisition of several game business amountingUS$10.6 million as we expect it would be hard for the game business to recover. For the yearsended December 31, 2019 and 2020 and six months ended June 30, 2020 and 2021, noimpairment indicator was noted by performing qualitative analysis, therefore, no provision wasrecorded.


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Intangible assets other than goodwill

Intangible assets arising from acquisitions are recognized at fair value upon acquisition andamortized on a straight-line basis over their estimated useful lives, generally from three to tenyears. Long-lived assets and certain identifiable intangible assets other than goodwill to beheld and used are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of such assets may not be recoverable. Determination ofrecoverability is based on an estimate of undiscounted future cash flows resulting from the useof the asset and its eventual disposition. Measurement of any impairment loss for long-livedassets and certain identifiable intangible assets that management expects to hold or use is basedon the amount by which the carrying value exceeds the fair value of the asset. Judgment is usedin estimating future cash flows, determining appropriate discount rates and making otherassumptions. Changes in these estimates and assumptions could materially affect thedetermination of the asset’s fair value.

Convertible debt and unsecured senior notes

We determine the appropriate accounting treatment of our convertible debt in accordance withthe terms in relation to the conversion feature. After considering the impact of such features,we may account for such instrument as a liability in its entirety, or separate the instrument intodebt and equity components following the respective guidance described under ASC 815Derivatives and Hedging and ASC 470 Debt.

The debt discount, if any, together with related issuance cost are subsequently amortized asinterest expense over the contractual life. We presented the issuance costs of debt as a directdeduction from the related debt during the periods presented.

The unsecured senior notes are recognized initially at fair value, net of debt discounts orpremiums, if any, issuance costs and other incidental fees, all of which are recorded as a directdeduction of the proceeds received from issuing the unsecured senior notes, and the relatedaccretion is recorded as interest expense in the consolidated statement of comprehensiveincome over the estimated term using the effective interest method.

Recent Accounting Pronouncements

A list of recently issued accounting pronouncements that are relevant to us is included in Note2. Significant Accounting Policies to the Accountant’s Report in Appendix IA to this document.


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CONTRACTUAL OBLIGATIONS

The following table sets forth our contractual obligations as of June 30, 2021:

Payment Due by Period

TotalLess than

1 year 1-3 years 3-5 yearsMore than

5 years

(in US$ thousands)

Operating LeaseObligations�� 12,800 6,020 3,632 2,855 293

PurchaseObligations�� 591,545 561,167 28,263 2,093 22

2022 Notes �� 916,867 11,250 905,617 — —2024 Notes �� 898,000 28,000 56,000 814,000 —2030 Notes �� 990,469 25,313 50,625 50,625 863,906

Total �� 2,805,336 64,563 1,012,242 864,625 863,906

Operating lease obligations consist of the commitments under the lease agreements for ouroffice premises. We lease our office facilities under non-cancelable operating leases withvarious expiration dates. Our leasing expense was US$11.2 million, US$11.5 million, US$12.5million, US$6.0 million and US$7.9 million for the years ended December 31, 2018, 2019,2020 and six months ended June 30, 2020 and 2021, respectively. The majority of our operatinglease commitments are related to our office lease agreements in China.

Purchase obligations primarily consist of minimum commitments for marketing activities andinternet connection.

2022 Notes represents our future maximum commitment relating to the principal amount andinterests in connection with the issuance of US$900 million in aggregate principal amount of1.25% coupon interest convertible senior notes, which will mature on November 15, 2022.

2024 Notes represents our future maximum commitment relating to the principal amount andinterests in connection with the issuance of US$800 million in aggregate principal amount ofsenior notes bearing an annual interest rate of 3.50%, which will mature on July 5, 2024.

2030 Notes represents future maximum commitment relating to the principal amount andinterests in connection with the issuance of US$750 million in aggregate principal amount ofsenior notes bearing an annual interest rate of 3.375%, which will mature on July 8, 2030.

As of September 30, 2021 and the Latest Practicable Date, save as disclosed in theAccountant’s Report in Appendix IA and Unaudited Interim Condensed Consolidated FinancialInformation in Appendix IB to this document, we did not have significant contingent liabilities.

As of September 30, 2021, save as disclosed in this section, we did not have any bankoverdrafts, loans and other similar indebtedness, liabilities under acceptances or acceptancecredits, debentures, mortgages, charges hire purchase commitments or other outstandingmaterial contingent liabilities.

Other than as shown above, we did not have any significant capital and other commitments,long-term obligations or guarantees as of September 30, 2021.


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WORKING CAPITAL

We recorded net current assets of US$1,839.3 million, US$2,835.3 million, US$3,876.2million, US$3,560.4 million, and US$3,688.2 million (unaudited), respectively, as ofDecember 31, 2018, 2019, 2020 and June 30, 2021 and September 30, 2021. As of September30, 2021, we recorded total current assets of US$4,850.5 million (unaudited) and total currentliabilities of US$1,162.3 million (unaudited). In addition, as of September 30, 2021, we hadcash and cash equivalents of US$1,828.7 million (unaudited). The following table sets forth abreakdown of our current assets and liabilities as of the dates indicated.


June 30,

2018 2019 2020 2021

(in US$ thousands)

Current assetsCash and cash equivalents �� 1,234,596 1,452,985 1,814,844 2,005,106Short-term investments �� 591,269 951,235 1,682,048 930,822Accounts receivable due from

third parties, net of allowancesof US$11,799, US$36,594,US$29,061 and US$35,880 as ofDecember 31, 2018, 2019 and2020 and June 30, 2021,respectively �� 190,036 262,158 314,159 467,246

Accounts receivable due fromAlibaba, net of allowances ofnil, nil, nil and nil as ofDecember 31, 2018, 2019 and2020 and June 30, 2021,respectively �� 48,222 60,392 135,321 122,991

Accounts receivable due fromother related parties, net ofallowances of US$630, nil,US$6,095 and nil as ofDecember 31, 2018, 2019 and2020 and June 30, 2021,respectively �� 130,835 99,675 42,530 40,972

Prepaid expenses and other currentassets (including loans to andinterest receivable from otherrelated parties of US$43,695,US$301,526, US$158,622 andUS$336,558 as of December 31,2018, 2019 and 2020 andJune 30, 2021, respectively)�� 168,821 424,905 296,757 587,293

Amount due from SINA(1) �� 105,319 384,828 548,900 498,618

Total current assets�� 2,469,098 3,636,178 4,834,559 4,653,048


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June 30,

2018 2019 2020 2021

(in US$ thousands)

Current liabilitiesAccounts payable �� 123,730 126,247 149,509 159,497Accrued and other liabilities �� 317,437 460,872 556,753 692,390Operating lease liability, short-

term �� — 4,708 5,580 5,594Income taxes payable �� 88,683 100,245 102,844 89,100Deferred revenues �� 99,994 108,783 143,684 146,085

Total current liabilities �� 629,844 800,855 958,370 1,092,666

Net current assets �� 1,839,254 2,835,323 3,876,189 3,560,382

Note:

(1) Included short-term loans to and interest receivable from SINA of US$43.6 million, US$236.6 million,US$547.9 million and US$480.7 million as of December 31, 2018, 2019 and 2020 and June 30, 2021,respectively. For a detailed description of our transactions with SINA, see “Related Party Transactions —Transactions with SINA.”

Our total assets increased from US$3,274.7 million as of December 31, 2018 to US$4,804.2million as of December 31, 2019, further to US$6,335.1 million as of December 31, 2020, toUS$6,702.7 million as of June 30, 2021 and to US$6,998.0 million (unaudited) as of September30, 2021. The significant increase in our total assets as of September 30, 2021 was largely dueto (i) an increase in our current assets mainly resulted from the increase in our cash and cashequivalents that were primarily attributable to our operating activities and financing activities,and (ii) an increase in our non-current assets primarily attributable to the increase in ourlong-term investments.

Our total liabilities increased from US$1,526.5 million as of December 31, 2018 to US$2,522.4million as of December 31, 2019, further to US$3,448.8 million as of December 31, 2020, toUS$3,595.1 million as of June 30, 2021 and to US$3,667.6 million (unaudited) as of September30, 2021. The significant increase in our total liabilities as of September 30, 2021 was largelydue to (i) an increase in our non-current liabilities primarily attributable to increases in ourunsecured senior notes, and (ii) an increase in our current liabilities mainly attributable toincreases in our accrued expenses and other liabilities.

For a detailed discussion on our cash position, being the balance sheet item that has materialimpact on our liquidity, as well as material changes in the various working capital items, see“— Liquidity and Capital Resources.”

Taking into account cash and cash equivalents on hand, our operating cash flows, and theestimated net proceeds available to us from the Global Offering, our Directors believe that wehave sufficient working capital for our present requirements and for at least the next 12 monthsfrom the date of this document.


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INDEBTEDNESS

The following table sets forth our indebtedness as of the dates indicated.


June 30,

As ofSeptember

30,

2018 2019 2020 2021 2021

(Unaudited)(In US$ thousands)

Current:Operating lease liability,

short-term �� – 4,708 5,580 5,594 4,405

Sub-total �� – 4,708 5,580 5,594 4,405

Non-current:Operating lease liability,

long-term �� – 5,289 1,505 6,154 5,831Convertible debt�� 884,123 888,266 892,399 894,470 895,505

Unsecured senior notes �� – 793,985 1,536,112 1,537,264 1,537,840

Sub-total �� 884,123 1,687,540 2,430,016 2,437,888 2,439,176

Total �� 884,123 1,692,248 2,435,596 2,443,482 2,443,581

Except as demonstrated in the table above, we did not have any material mortgages, charges,debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,finance lease or hire purchase commitments, liabilities under acceptances (other than normaltrade bills), acceptance credits, which are either guaranteed, unguaranteed, secured orunsecured, or guarantees or other contingent liabilities as of September 30, 2021. SinceSeptember 30, 2021 and up to the Latest Practicable Date, there had not been any materialadverse change to our indebtedness.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any financial guarantees or other commitments to guarantee thepayment obligations of any unconsolidated third parties. In addition, we have not entered intoany derivative contracts that are indexed to our shares and classified as shareholders’ equity,or that are not reflected in our consolidated financial statements. Furthermore, we do not haveany retained or contingent interest in assets transferred to an unconsolidated entity that servesas credit, liquidity or market risk support to such entity. Moreover, we do not have any variableinterest in any unconsolidated entity that provides financing, liquidity, market risk or creditsupport to us or engages in leasing, hedging or product development services with us.


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RELATED PARTY TRANSACTIONS

For details relating to our related party transactions, see “Related Party Transactions” and Note10 to the Accountant’s Report set out in Appendix IA to this document. Our Directors believethat our transactions with related parties during the Track Record Period were conducted on anarm’s length basis, and they did not distort our results of operations or make our historicalresults not reflective of our future performance.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Risk

The value of the RMB against the U.S. dollar and other currencies is affected by changes inChina’s political and economic conditions and China’s foreign exchange policies, among otherthings. It is difficult to predict how market forces or PRC or U.S. government policy mayimpact the exchange rate between the RMB and the U.S. dollar in the future. To date, we havenot entered into any hedging transactions in an effort to reduce our exposure to foreigncurrency exchange risk.

Our revenues and costs are mostly denominated in RMB, and a significant portion of ourfinancial assets are also denominated in RMB, whereas our reporting currency is the U.S.dollar. Any significant depreciation of the RMB may materially and adversely affect ourrevenues, earnings and financial position as reported in U.S. dollars. To the extent that we needto convert U.S. dollars we received from the issuance of 2022 Notes, 2024 Notes and 2030Notes into RMB for our operations, appreciation of the RMB against the U.S. dollar wouldhave an adverse effect on the RMB amount we would receive from the conversion. Conversely,if we decide to convert our RMB into U.S. dollars for the purpose of making payments fordividends on our ordinary shares or ADSs or for other business purposes, appreciation of theU.S. dollar against the RMB would have a negative effect on the U.S. dollar amount availableto us.

Below is a sensitivity analysis on the impact of a change in the value of the RMB against theU.S. dollar assuming: (1) projected net income from operation in China equal to the net incomeof 2020, (2) projected net assets of the operation in China equal to the balances in RMB andU.S. dollar as of December 31, 2020 and (3) currency fluctuation occurring proportionatelyover the period:

Change in the Value of RMBAgainst the U.S. Dollar

TranslationAdjustments to

Comprehensive IncomeTransactionGain (Loss)

(in US$ thousands)

Appreciate 2% �� 53,028 (241)Appreciate 5% �� 132,713 (603)Depreciate 2% �� (52,950) 241Depreciate 5% �� (132,222) 603


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Interest Rate Risk

Our exposure to interest rate risk primarily relates to the interest income generated by excesscash, which is mostly held in interest-bearing bank deposits. Interest-earning instruments carrya degree of interest rate risk. We have not been exposed to material risks due to changes ininterest rates, and we have not used any derivative financial instruments to manage our interestrisk exposure. However, our future interest income may fall short of expectations due tochanges in market interest rates.

Investment Risk

As of December 31, 2020 and June 30, 2021, our equity investments totaled US$1,179.5million and US$1,123.3 million, respectively. We adopted ASU 2016-01, “Classification andMeasurement of Financial Instruments,” beginning January 1, 2018. After the adoption of ASU2016-01, we measure investments in equity securities other than equity method investments atfair value through earnings. For those investments without readily determinable fair values, weelected to record these investments at cost, less impairment, and plus or minus subsequentadjustments for observable price changes (referred to as the measurement alternative). Changesin the basis of these investments are reported in current earnings. We recognized gain ofUS$35.1 million in upward adjustment and loss of US$69.5 million in downward adjustmentfor fair value changes on investments for the year ended December 31, 2020 and for the sixmonths ended June 30, 2021, respectively.

Our investments other than equity method are subject to a wide variety of market related risksthat could substantially reduce or increase the fair value of our holdings. Investments usingmeasurement alternative are investments in privately held companies. Valuations of ourinvestments in private companies are inherently more complex due to the lack of readilyavailable market data. The fair value is measured at the time of the observable transaction,which is not necessarily an indication of the current fair value as of the balance sheet date.These investments, especially those in the early stages, are inherently risky because thetechnologies or products these companies have under development are typically in the earlyphases and may never materialize and they may experience deterioration in financial condition,which could result in a loss of a substantial part of our investment in these companies. Thesuccess of our investment in any private company is also dependent on the likelihood of ourability to realize value in our investments through liquidity events such as public offerings,acquisitions, private sales or other favorable market events reflecting appreciation to the costof our initial investment. Volatility in the global economic climate and financial markets couldalso result in a significant impairment charge on our non-marketable equity securities. As ofDecember 31, 2020 and June 30, 2021, the carrying value of our investments usingmeasurement alternative was US$579.1 million and US$453.5 million, respectively.

The carrying values of our equity method investments generally do not fluctuate due to marketprice changes, however these investments could be impaired if the carrying value exceeds thefair value.

We periodically review our investments for impairment. Factors we consider to make suchdetermination include the duration and severity of the impairment, the reason for the declinein value, the potential recovery period, and our intent to sell, or whether it is more likely thannot that we will be required to sell, the investment before recovery. We recorded US$212.0million and US$66.6 million of investment related impairment charges for the year endedDecember 31, 2020 and for the six months ended June 30, 2021, respectively. We are unableto control these factors and an impairment charge recognized by us will unfavorably impact ouroperating results and financial position.


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Our short-term investments as of December 31, 2020 and June 30, 2021 totaled US$1,682.0million and US$930.8 million, respectively, which were composed of bank time deposits andwealth management products with maturity over three months but within one year.

DIVIDEND POLICY

We have not previously declared or paid cash dividends and we have no plan to declare or payany dividends in the near future on our shares or ADSs. We currently intend to retain most, ifnot all, of our available funds and any future earnings to fund the development and growth ofour business.

We are a holding company incorporated in the Cayman Islands. We rely principally ondividends from our PRC subsidiaries for our cash requirements, including any payment ofdividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiariesto pay dividends to us. See “Risk Factors — Risks Relating to Doing Business in the People’sRepublic of China — Any limitation on the ability of our PRC subsidiaries to make paymentsto us, or the tax implications of making payments to us, could have a material adverse effecton our ability to conduct our business or our financial condition.”

Our board of directors has discretion as to whether to distribute dividends, subject to applicablelaws. In addition, our shareholders may by ordinary resolution declare dividends, but nodividend may exceed the amount recommended by our directors. Under Cayman Islands law,our company may pay dividends only out of either profit or share premium account, providedthat in no circumstances may a dividend be paid if this would result in our company beingunable to pay its debts as they fall due in the ordinary course of business. Even if our boardof directors decides to pay dividends, the form, frequency and amount will depend upon ourfuture operations and earnings, capital requirements and surplus, general financial condition,contractual restrictions and other factors that the board of directors may deem relevant. If wepay any dividends, our depositary will distribute such dividends to our ADS holders to thesame extent as holders of our ordinary shares, subject to the terms of the deposit agreement,including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, ifany, will be paid in U.S. dollars.

NO MATERIAL ADVERSE CHANGE

After due and careful consideration, our directors confirm that, up to the date of this document,there has not been any material adverse change in our financial or trading position or prospectssince June 30, 2021, and there is no event since June 30, 2021 which would materially affectthe information shown in the Accountant’s Report in Appendix IA to this document.

LISTING EXPENSES

We expect to incur listing expenses of approximately HK$129.7 million, accounting for 6.08%of gross proceeds, after June 30, 2021, including underwriting-related expenses ofapproximately HK$27.1 million, and non-underwriting related expenses of approximatelyHK$102.6 million which consist of fees and expenses for legal advisors and accountants ofapproximately HK$68.1 million and other fees and expenses of approximately HK$34.5million (assuming that the Global Offering is conducted at the indicative offer price per OfferShare of HK$388.00 for both Hong Kong Public Offering and International Offering and theOver-allotment Option is not exercised). We expect approximately HK$121.8 million of thelisting expenses will be recorded as a deduction in equity directly and approximately HK$7.9million of the listing expenses will be charged to the profit or loss of our Company. The SellingShareholder pays the underwriting fees, the Hong Kong Stock Exchange trading fee, SFCtransaction levy and SEC registration fee corresponding to the Sale Shares, and we bear otherlisting expenses.


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UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS

The following unaudited pro forma adjusted net tangible assets prepared in accordance withRule 4.29 of the Listing Rules are set out below for the purpose of illustrating the effect of theGlobal Offering on the audited consolidated net tangible assets attributable to shareholders ofthe Company as at June 30, 2021 as if the Global Offering had taken place on that date.

The unaudited pro forma adjusted net tangible assets has been prepared for illustrativepurposes only; and because of its hypothetical nature, it may not give a true picture of theconsolidated net tangible assets attributable to shareholders of the Company as at June 30, 2021or at any future dates following the completion of the Global Offering. The unaudited proforma adjusted net tangible assets is based on the audited consolidated net tangible assetsattributable to the shareholders of the Company as at June 30, 2021, as shown in theAccountant’s Report of the Group, the text of which is set out in Appendix IA to this document,and adjusted as described below.

Auditedconsolidatednet tangible

assetsattributable toshareholders ofthe Companyas at June 30,

2021(1)

Estimatednet proceeds

from theGlobal

Offering(2)

Unaudited proforma adjusted

net tangibleassets

attributable toshareholders ofthe Company

Unauditedpro forma

adjusted nettangible

assets perShare

Unauditedpro forma


assets perADS

Unauditedpro forma


assets perShare

Unauditedpro forma


assets perADS

USD’000 USD’000 USD’000 USD(3) USD(4) HK$(5) HK$(5)

Based on an Offer Price ofHK$388.00 per Share � � 2,788,516 257,239 3,045,755 13.03 13.03 101.51 101.51

Notes:

* No adjustment has been made to reflect any trading result or other transactions of the Group entered intosubsequent to June 30, 2021.

(1) The audited consolidated net tangible assets attributable to shareholders of the Company as at June 30, 2021is calculated based on the audited consolidated net assets attributable to shareholders of the Company as atJune 30, 2021 of US$3,010,038,000 as set out in Appendix IA, with adjustments for goodwill attributable toshareholders of the Company as at June 30, 2021 of US$98,008,000 (excludes non-controlling interests ofUS$15,596,000) and net intangible assets attributable to shareholders of the Company as at June 30, 2021 ofUS$123,514,000 (excludes non-controlling interests of US$33,663,000).

(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$388.00 per Share,after deduction of the underwriting fees and other related expenses payable by the Group, but does not takeinto account 11,674,008 Class A ordinary shares issued and reserved for future issuance upon the exercisingor vesting of awards granted under the Share Incentive Plans, any conversion of Class B ordinary shares intoClass A ordinary shares upon exercise of the Over-allotment Option, and any issuance or repurchase of sharesand/or ADSs by the Company.


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(3) The unaudited pro forma adjusted net tangible assets per Share is arrived at after the adjustments referred toin the preceding paragraphs and on the basis that 233,781,368 Shares were in issue assuming that the GlobalOffering had been completed on June 30, 2021, but does not take into account 11,674,008 Class A ordinaryshares issued and reserved for future issuance upon the exercising or vesting of awards granted under the ShareIncentive Plans, any conversion of Class B ordinary shares into Class A ordinary shares upon exercise of theOver-allotment Option, and any issuance or repurchase of shares and/or ADSs by the Company.

(4) The unaudited pro forma adjusted net tangible assets per ADS is arrived at after the adjustments referred toin the preceding paragraphs and on the basis that one ADS represent one Share.

(5) For the purpose of this unaudited pro forma adjusted net tangible assets, the amounts stated in USD areconverted into Hong Kong dollars at a rate of USD1.00 to HK$7.7915. No representation is made that USDamounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, at that rate.


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CONTROLLING SHAREHOLDERS

As of September 30, 2021, Mr. Charles Chao, our chairman of the board of directors since ourinception, was interested in and controlled through SINA Corporation, a wholly ownedsubsidiary of Sina Group Holding Company Limited, which is a wholly owned subsidiary ofNew Wave MMXV Limited, a business company incorporated in the BVI and controlled by Mr.Charles Chao, 101,778,958 Class B ordinary shares of our Company. As of September 30,2021, Mr. Chao controlled approximately 70.6% of the aggregate voting rights in ourCompany. Immediately following the Global Offing, Mr. Charles Chao will controlapproximately 67.6% of the aggregate voting rights in our Company, assuming theshareholding in the Company which he controls through SINA Corporation has remainedunchanged since September 30, 2021 and will remain unchanged until SINA Corporation sellsthe Sale Shares, and without taking into account any conversion of Class B ordinary shares intoClass A ordinary shares upon the exercise of the Over-allotment Option.

INDEPENDENCE FROM CONTROLLING SHAREHOLDERS

Having considered the following factors, our directors are satisfied that we are capable ofcarrying on our business independently of our controlling shareholders and their closeassociates after the Listing.

Management independence

Our business is managed and conducted by our board and senior management. Our boardconsists of seven directors, of whom three are independent directors unrelated to ourcontrolling shareholders. For more information, please see “Directors and SeniorManagement”.

Our directors consider that our board and senior management will function independently ofour controlling shareholders because:

(a) each director is aware of his/her fiduciary duties as a director, which require, among otherthings, that he/she acts for the benefit, and in the interests, of our Company and does notallow any conflict between his/her duties as a director and his/her personal interests;

(b) our daily management and operations are carried out by our senior management, all ofwhom have substantial experience in our Group’s business and/or the industry in whichwe operate, and will be able to make decisions that are in our best interest;

(c) we have three independent directors and certain matters of our Company will always bereferred to them for review and/or approval;

(d) in the event that there is a potential conflict of interest arising out of any transaction tobe entered into between our Group and our directors or their respective associates, theinterested director(s) is required to declare the nature of his/her interest before voting atthe relevant meeting(s) in respect of that transaction; and

(e) we have adopted a series of corporate governance measures to manage conflicts ofinterest, if any, between our Group and our controlling shareholders that would supportour independent management; see “— Corporate Governance Measures”.

RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS

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Operational independence

We have certain ongoing transactions with SINA. For details, please refer to the section“Related Party Transactions — Our Relationship with SINA” and “Related Party Transactions— Transactions with SINA”. Our Group (through our subsidiaries) holds all material licensesand owns all relevant intellectual properties and research and development facilities necessaryto carry on our business. We have sufficient capital, facilities, equipment and employees tooperate our business independently of our controlling shareholders. Our access to, andrelationship with, our customers and suppliers are independent of our controlling shareholders,and we have an independent management team that operates our business.

Financial Independence

We have independent internal control and accounting systems. We also have an independentfinance department responsible for discharging the treasury function, and an audit committeecomprising solely of independent directors to oversee our accounting and financial reportingprocesses. We are capable of obtaining financing from third parties, if necessary, withoutreliance on our controlling shareholders.

Save for those disclosed in the section “Related Party Transactions — Our Relationship withSINA” and “Related Party Transactions — Transactions with SINA”, there are no other loansor guarantees granted to our controlling shareholders or their respective associates, and thereare no loans or guarantees provided by our controlling shareholders or their respectivelyassociates, as of the Latest Practicable Date.

Based on the above, our directors believe that our board as a whole and together with our seniormanagement team are able to manage, operate and carry on our business independently of, anddo not place undue reliance on, our controlling shareholders and their respective closeassociates.

DISCLOSURE UNDER RULE 8.10 OF THE HONG KONG LISTING RULES

Our controlling shareholders and/or our directors may, from time to time, make minorityinvestments or hold non-executive board positions in entities that operate in, or havesubsidiaries that operate in, the broader industries in which our business segments also operate.As our controlling shareholders and/or directors have no executive or shareholding controlover any of these entities, and these entities have separate businesses with separatemanagement and shareholder bases that control their entities, our controlling shareholders willnot inject any of their interested entities into our Group; and to the extent our directors holdnon-executive board positions or make minority investments in these entities, we believe thatthis strengthens the experience and diversity of our directors, as a group, and signifies theirpassion for the industries in which we operate.

Our controlling shareholders and directors confirm that as of the Latest Practicable Date, theydid not have any interest in a business, apart from the business of our Group, which competesor is likely to compete, directly or indirectly, with our business that would require disclosureunder Rule 8.10 of the Hong Kong Listing Rules. For further details on the risks in relation topotential conflicts of interest with SINA, please see “Risk Factors — Risks Relating to ourBusiness”.


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CORPORATE GOVERNANCE MEASURES

Our directors recognize the importance of good corporate governance in protecting ourshareholders’ interests. We have adopted the following measures to ensure good corporategovernance standards and to avoid potential conflicts of interest between our Group and ourcontrolling shareholders:

(a) where our directors reasonably request the advice of independent professionals, such asfinancial advisors, the appointment of such independent professionals will be made at ourCompany’s expense;

(b) we have appointed Somerley Capital Limited as our compliance advisor to provide adviceand guidance to us in respect of compliance with the applicable laws, as well as the HongKong Listing Rules, including various requirements relating to corporate governance; and

(c) we have established our audit committee and compensation committee with written termsof reference in compliance with the rules of the Nasdaq. All of the members of our auditcommittee, including the chairman, are independent directors.

Based on the above, our directors are satisfied that we have sufficient corporate governancemeasures in place to manage conflicts of interest that may arise between our Group and ourcontrolling shareholders, and to protect our minority shareholders’ interests after the Listing.


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OVERVIEW

The following table provides information with respect to our directors and executive officersas of the date of this document. There are no family relationships among any of the directorsor executive officers of our company.

Name Age Position(s)

Date ofappointmentas directoror seniormanager

Year ofjoining

ourGroup

Charles Guowei Chao 56 Chairman of the Board ofDirectors

June 2010 2010

Hong Du 49 Director January 2014 2014Daniel Yong Zhang 49 Director May 2014 2014Pochin Christopher

Lu62 Independent Director August 2020 2020

Pehong Chen 63 Independent Director January 2016 2016Gaofei Wang 43 Director and Chief

Executive OfficerAugust 2020 2012

Yan Wang 49 Independent Director May 2021 2021Fei Cao 46 Chief Financial Officer March 2021 2017Wei Wang 47 Chief Operating Officer March 2021 2021Zenghui Cao 43 Senior Vice President,

OperationApril 2018 2009

Our board consists of seven directors, including three independent non-executive directors. See“— Board Practices” for the functions and duties of our board. Our board is responsible forexercising other powers, functions and duties in accordance with the Articles of Association,and all applicable laws, including the Hong Kong Listing Rules. Our independent directorsunder applicable U.S. regulations are also independent non-executive directors for the purposeof the Hong Kong Listing Rules. We have determined that Pochin Christopher Lu qualifies asan “audit committee financial expert” under the applicable rules of the SEC and has theappropriate professional accounting and financial management experience.

Save as disclosed below, none of our directors held any other directorships in any othercompany listed in Hong Kong or overseas during the three years immediately preceding thedate of this document and there are no family relationships among any of the directors orexecutive officers of our Company. See “Major Shareholders” for disclosure of interests of thedirectors and executive officers. There is no other material matter relating to our directors thatneeds to be brought to the attention of our shareholders and the information of our directorsdisclosed in this document comply with the requirements under Rule 13.51(2) of the HongKong Listing Rules in all material respects.

DIRECTORS AND SENIOR MANAGEMENT

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BIOGRAPHIES

Our directors

Charles Guowei Chao has served as our Chairman of the board of directors since ourinception. He has served as the Chairman of the board of directors of our parent, SINA, sinceAugust 2012, and has been SINA’s Chief Executive Officer since May 2006. He served asSINA’s President from September 2005 to February 2013, Chief Financial Officer fromFebruary 2001 to May 2006, Co-Chief Operating Officer from July 2004 to September 2005.Prior to joining SINA, Mr. Chao served as an audit manager at PricewaterhouseCoopers, LLP.Prior to that, Mr. Chao was a news correspondent at Shanghai Media Group. Mr. Chao iscurrently a director of Leju Holdings Ltd., a New York Stock Exchange-listed company(NYSE: LEJU) providing online-to-offline (O2O) real estate services in China, a director ofNetDragon Websoft Inc., an Hong Kong Stock Exchange-listed company (HKEX: 0777)providing technology for online gaming, and a director of TuSimple Holdings Inc., aNasdaq-listed autonomous technology company (Nasdaq: TSP). Mr. Chao holds a B.A. inJournalism from Fudan University in Shanghai, China, master of art from the University ofOklahoma and a Master of Professional Accounting degree from the University of Texas atAustin.

Hong Du has served as our director since January 2014. Since February 2013, Ms. Du hasserved as SINA’s Co-President and Chief Operating Officer. Ms. Du joined SINA in November1999 and worked in Business Development until April 2004. From May 2004 to January 2005,Ms. Du served as Deputy General Manager of 1Pai.com, a joint venture between SINA andYahoo! Ms. Du rejoined SINA in January 2005 and served as the General Manager of SalesStrategy from January 2005 to March 2005, General Manager of Sales from April 2005 toAugust 2005, Vice President of Sales from September 2005 to February 2007, Senior VicePresident of Sales and Marketing from February 2007 to February 2008, and Chief Operatingofficer from February 2008 to February 2013. Ms. Du holds a B.S. in Applied Chemistry fromHarbin Institute of Technology and an M.S. in Business Administration from LincolnUniversity.

Daniel Yong Zhang has served as our director since May 2014. Mr. Zhang has been theChairman of Alibaba Group Holding Limited, a leading digital platform company listed on theNew York Stock Exchange (NYSE: BABA) and the Hong Kong Stock Exchange (HKEX:9988), since September 2019, and has served as Alibaba’s Chief Executive Officer since May2015. After joining Alibaba in August 2007, Mr. Zhang served multiple senior managementroles within the group. He has served as Director since September 2014, as Chief OperatingOfficer from September 2013 to May 2015, and as President of Tmall.com from June 2011 toSeptember 2013, and as Chief Financial Officer of Taobao Marketplace from August 2007 toJune 2011 while concurrently served as General Manager of Tmall.com starting in August 2008to June 2011. Prior to joining Alibaba, Mr. Zhang served as Chief Financial Officer andfinancial controller of Shanda Interactive Entertainment Limited, an online game developerand operator then listed on Nasdaq, from September 2005 to August 2007. From 2002 to 2005,he was a senior manager of PricewaterhouseCoopers’ Audit and Business Advisory Division inShanghai. Mr. Zhang is a director of Didi Global Inc., a company listed on the New York StockExchange (NYSE: DIDI) since April 2018. Mr. Zhang was a director of Sun Art Retail GroupLimited, a company listed on the Main Board of the Hong Kong Stock Exchange (HKEX:6808), from January 2018 to December 2020, and served as chairman until October 2020. Heis a member of the WEF International Business Council and the Co-Chair of the Board andCo-Chair of the China board of Consumer Goods Forum. Mr. Zhang received a bachelor’sdegree in finance from Shanghai University of Finance and Economics.


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Pochin Christopher Lu has served as our independent director since August 2020. Mr. Lu hasserved as the Executive Director at Foxconn Interconnect Technology Ltd, a company listed onthe Hong Kong Stock Exchange (HKEX: 6088) and global leader in the supply of precisioncomponents, since March 16, 2015. Mr. Lu is also the Global Cooperating Officer and ChiefFinancial Officer of Foxconn Interconnect Technology Ltd. From January 1981 to December2014, Mr. Lu served multiple executive positions at Deloitte Touche Tohmatsu Limited,including the Chief Executive Officer of Deloitte China and a member of the Deloitte ToucheTohmatsu Limited Global Executive Committee. Mr. Lu was also an independent director atGreenland Holdings Corp., Ltd., a Shanghai Stock Exchange-listed company (SSE: 600606)operating real estate business until November 2021, and is an independent non-executivedirector at Honma Golf Limited, a Hong Kong Stock Exchange-listed company (HKEX: 6858)that manufactures and distributes golf products. He is a member of the American Institute ofCertified Public Accountants and the Chinese Institute of Certified Public Accountants. Mr. Luobtained a Bachelor of Science degree in accounting and a master of accounting science degreefrom the University of Illinois at Urbana-Champaign, USA, in 1980 and 1981, respectively.

Pehong Chen (formerly known as Pee-Hong Chen) has served as our independent directorsince January 2016. Before that he served as a director of SINA between March 1999 andDecember 2015. Dr. Pehong Chen is Founder and Chairman of BroadVision Group, a globalholding company that incubates and invests in cloud, AI, fintech, medtech, biotech, healthtech,and other innovative technologies and digital transformation initiatives. Previously, he wasFounder, President, and CEO of BroadVision, Inc. (Nasdaq: BVSN; acquired by AureaSoftware in 2020) from 1993-2020 and of Gain Technology, Inc. (acquired by Sybase in 1992)from 1988-1992. Mr. Chen received a B.S. in engineering from National Taiwan University, amaster of science degree from Indiana University and a Ph.D. in Computer Science from theUniversity of California at Berkeley.

Gaofei Wang has served as our Chief Executive Officer since February 2014 and our directorsince August 2020. Since our inception, Mr. Wang has had various product and businessdevelopment roles at Weibo and was promoted to General Manager in December 2012. Mr.Wang joined SINA in August 2000 and worked in the product development department untilearly 2004 when he transferred to the SINA Mobile division. He served as General Managerof SINA Mobile division from November 2006 to November 2012. Mr. Wang is a director ofDidi Global Inc., a company listed on the New York Stock Exchange (NYSE: DIDI) since June2021. Mr. Wang holds a B.S. degree in Computer Science from Peking University and anEMBA degree from Guanghua School of Management of Peking University.

Yan Wang has served as our independent director since May 2021. Previously, he had servedas a director of SINA since May 2003, including as SINA’s Vice Chairman of the board andChairman of the board from May 2006 to August 2012 and as an independent director of SINAfrom August 2012 to March 2021. Before that, he served as SINA’s Chief Executive Officerfrom May 2003 to May 2006, its President from June 2001 to May 2003, its General Managerof China operations from September 1999 to May 2001 and as its Executive Deputy GeneralManager for production and business development in China from April 1999 to August 1999.In April 1996, Mr. Wang founded the SRSnet.com division of Beijing Stone Rich Sight Limited(currently known as Beijing SINA Information Technology Co., Ltd.), one of SINA’ssubsidiaries. From April 1996 to April 1999, Mr. Wang served as the Head of SINA’s SRSInternet Group. Mr. Wang has also served as the independent non-executive director, theChairman of the remuneration committee, the member of the audit committee and thenomination committee of a Hong Kong Stock Exchange-listed company, Viva China HoldingsLimited (HKEX: 8032), since July 2017. Mr. Wang holds a B.A. in Law and Master inInternational Relations from the University of Paris II.


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Our senior management (aside from our directors)

Fei Cao has served as our Chief Financial Officer since March 2021. Ms. Cao served as ourVice President, Finance from August 2017 to March 2021. Prior to that, Ms. Cao was a VicePresident of SINA from January 2017 to July 2017, overseeing SINA’s finance department. Ms.Cao joined SINA in 2005 and served as the company’s Corporate Controller for more than tenyears. Prior to joining SINA, she was an audit manager at the PricewaterhouseCoopers inBeijing. Ms. Cao is currently a director of Tian Ge Interactive Holdings Limited, a Hong KongStock Exchange-listed (HKEX: 1980) live social video company in China, and a director ofINMYSHOW Digital Technology (Group) Co., Ltd., a Shanghai Stock Exchange-listedcompany (SSE: 600556) providing social and new media marketing services. Ms. Cao holds aB.S. in engineering and an EMBA degree from Shanghai Jiaotong University. She is a certifiedpublic accountant in China and a member of the China Institute of Certified PublicAccountants.

Wei Wang has served as our Chief Operating Officer since March 2021. Mr. Wang has beenin charge of SINA Mobile’s business since January 2019. From January 2016 to December2018, he served as Chief Information Officer of SINA. Mr. Wang joined SINA in March 2000and served as the General Manager of Information Systems Department until December 2015.Prior to joining SINA, he worked at PricewaterhouseCoopers, LLP. Mr. Wang holds a B.A. inGerman from Fudan University.

Zenghui Cao has served as our Senior Vice President, Operation since April 2018. Mr. Caoserved as our Chief Editor from October 2017 to March 2018. Mr. Cao joined us in September2009 and served as Director of Operation from September 2009 to March 2013, GeneralManager of Operation from April 2013 to March 2015, and Vice President of Operation fromApril 2015 to September 2017. Mr. Cao joined SINA in September 2002 and served as ChiefEditor and other roles in SINA Technology Channel from September 2002 to August 2009.Prior to joining SINA, Mr. Cao worked at Sohu. Mr. Cao holds a. B.S. in Electrical Engineeringand Automation from Hebei University of Technology.

COMPENSATION

Compensation of directors and executive officers

For each of the year ended December 31, 2018, 2019 and 2020 and the six months ended June30, 2021, we paid an aggregate of US$2.7 million, US$0.8 million, US$0.8 million and US$0.6million in cash and benefits to our executive officers, and we did not pay any cashcompensation to our non-executive directors. For share incentive grants to our officers anddirectors, see “— Share Incentive Plans”. We have not set aside or accrued any amount toprovide pension, retirement or other similar benefits to our executive officers and directors.

Our PRC subsidiaries, our VIEs and their subsidiaries are required by law to makecontributions equal to certain percentages of each employee’s salary for his or her pensioninsurance, medical insurance, unemployment insurance and other statutory benefits and ahousing provident fund.


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Employment agreements

We have entered into employment agreements with our senior executive officers. Pursuant tothese agreements, we will be entitled to terminate a senior executive officer’s employment forcause at any time without remuneration for certain acts of the officer, such as being convictedof any criminal conduct, any act of gross or willful misconduct or any serious, willful, grosslynegligent or persistent breach of any employment agreement provision, or engaging in anyconduct which may make the continued employment of such officer detrimental to ourcompany. In connection with the employment agreement, each senior executive officer hasentered into an intellectual property ownership and confidentiality agreement and agreed tohold all information, know-how and records in any way connected with the products of ourcompany, including, without limitation, all software and computer formulae, designs,specifications, drawings, data, manuals and instructions and all customer and supplier lists,sales and financial information, business plans and forecasts, all technical solutions and thetrade secrets of our company, in strict confidence perpetually. Each officer has also agreed thatwe shall own all the intellectual property developed by such officer during his or heremployment.

Each executive officer has agreed to hold, both during and after the termination or expiry ofhis or her employment agreement, in strict confidence and not to use, except as required in theperformance of his or her duties in connection with the employment, any of our confidentialinformation or trade secrets, any confidential information or trade secrets of our clients orprospective clients, or the confidential or proprietary information of any third party receivedby us and for which we have confidential obligations.

In addition, each executive officer has agreed to be bound by non-competition andnon-solicitation restrictions during the term of his or her employment. Specifically, eachexecutive officer has agreed not to (a) approach our clients, advertisers or contacts or otherpersons or entities introduced to the executive officer for the purpose of doing business withsuch persons or entities that will harm our business relationships with these persons or entities;(b) assume employment with or provide services to any of our competitors, or engage, whetheras principal, partner, licensor or otherwise, any of our competitors; or (c) seek directly orindirectly, to solicit the services of any of our employees who is employed by us on or afterthe date of the executive officer’s termination, or in the year preceding such termination.

Share Incentive Plans

2010 Share Incentive Plan

We adopted our 2010 Share Incentive Plan, or the 2010 Plan, in August 2010 to promote thelong-term success of our Company and the creation of shareholder value by offeringparticipants the opportunity to share in such long-term success by acquiring a proprietaryinterest in our Company. The maximum aggregate number of shares which may be issued underthe 2010 Plan is 35,000,000 ordinary shares. In March 2014, the 2010 Plan was terminated andall ordinary shares reserved but unissued were transferred to the 2014 Plan.


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2014 Share Incentive Plan

We adopted our 2014 Share Incentive Plan, or the 2014 Plan, in March 2014. Ordinary sharesreserved but unissued under the 2010 Plan have been transferred to the 2014 Plan. Since theadoption of the 2014 Plan, we have not issued and will not issue any share incentive awardsunder the 2010 Plan. The maximum aggregate number of shares which may be issued pursuantto all awards under the 2014 Plan is the sum of 5,647,872 shares and the amount equal to 10%of the total number of our ordinary shares on an as-converted and fully diluted basis as ofDecember 31, 2014. As of September 30, 2021, 394,769 option and 6,886,726 restricted shareunits were granted and outstanding. The following paragraphs summarize the terms of the 2014Plan.

Types of Awards. The 2014 Plan permits the awards of options, restricted shares and restrictedshare units.

Plan Administration. Our board or a committee of one or more members of our board dulyauthorized for the purpose of the 2014 Plan can act as the plan administrator.

Award Agreement. Options, restricted shares or restricted share units granted under the 2014Plan are evidenced by an award agreement that sets forth the terms, conditions and limitationsfor each grant.

Exercise Price and Purchase Price. The exercise price in respect of any option shall bedetermined by the plan administrator and set forth in the award agreement which may be afixed or variable price related to the fair market value of the shares. The exercise price pershare subject to an option may be amended or adjusted in the absolute discretion of the planadministrator, the determination of which shall be final, binding and conclusive.

Eligibility. We may grant awards to our employees, consultants or directors, employees of ourparent company and subsidiaries.

Term of the Awards. The 2014 Plan shall be valid and effective for a period of ten years fromthe date of effectiveness. The term of each option grant shall not exceed ten years from the dateof the grant.

Vesting Schedule. In general, the plan administrator determines the vesting schedule, which isset forth in the award agreement with each award recipient.

Transfer Restrictions. Unless otherwise provided by applicable law and by the awardagreement, awards under the 2014 Plan may not be transferred in any manner by the awardholders and may be exercised only by such holders, subject to limited exceptions.

Termination. The plan administrator may at any time terminate the operation of the 2014 Plan.


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The following table summarizes, as of September 30, 2021, the outstanding options andrestricted share units that we granted to our directors, executive officers and other grantees inthe aggregate under the 2014 Plan:

Name

OrdinaryShares

UnderlyingOutstandingOptions andRestricted

Share UnitsExercise Price

(US$/Share) Grant Date Expiration Date

Charles Chao�� — — — —Hong Du �� *(1) — From November 22,

2018 to July 27,2021

—

Pehong Chen �� *(1) — November 22, 2018 —P Christopher Lu �� *(1) — August 13, 2020 —Gaofei Wang �� *(1) — From November 22,

2018 to July 27,2021

—

Yan Wang �� *(1) — May 10, 2021 —Fei Cao �� *(1) — From May 21, 2018

to July 27, 2021—

Wei Wang �� *(1) — From May 21, 2018to July 27, 2021

—

Zenghui Cao �� *(1) — From April 20, 2017to July 27, 2021

—

* US$32.68 August 14, 2020 August 14, 2027Other grantees�� * US$32.68 August 14, 2020 August 14, 2027

5,765,921(1) — From November 16,2016 to July 27,2021

—

Total �� 7,281,495

* Less than one percent of our total outstanding shares.

(1) Restricted share units.


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BOARD PRACTICES

Board of Directors

Our board of directors consists of seven directors. A director is not required to hold any sharesin our company to qualify to serve as a director. A director who to his knowledge is in any way,whether directly or indirectly, interested in a contract or arrangement or proposed contract orarrangement with our company is required to declare the nature of his interest at the meetingof our board at which the question of entering into the contract or arrangement is firstconsidered, if he knows his interest then exists, or in any other case at the first meeting of ourboard after he knows that he is or has become so interested. Following such a declaration beingmade, subject to any separate requirement for audit committee approval under applicable lawor the Listing Rules of the Nasdaq, and unless disqualified by the chairman of the relevantboard meeting, a director may vote in respect of any contract or proposed contract orarrangement in which such director is interested and may be counted in the quorum at suchmeeting. Our board of directors may exercise all our powers of the company to raise or borrowor to secure the payment of any sum or sums of money for the purposes of our company andto mortgage or charge our undertaking, property and assets (present and future) and uncalledcapital or any part thereof.

Board committees

We have established an audit committee and a compensation committee under the board ofdirectors and adopted a charter for each of these committees. Each committee’s members andfunctions are described below.

Audit committee

Our audit committee consists of Mr. P Christopher Lu and Mr. Pehong Chen, and is chaired byMr. Lu. Mr. Lu and Mr. Chen satisfy the “independence” requirements of Rule 5605(c)(2) ofthe Listing Rules of the Nasdaq Stock Market and meet the independence standards under Rule10A-3 under the Exchange Act. We have determined that Mr. Lu qualifies as an “auditcommittee financial expert.” As a Cayman Islands company, we are permitted to rely on thehome country exemption under Nasdaq rules to reduce the size of our audit committee to twomembers. An audit committee of two independent directors would satisfy Rule 5605(c)(2). Wehave elected to follow home country practice in terms of the number of audit committeemembers. The audit committee oversees our accounting and financial reporting processes andthe audits of the financial statements of our company. The audit committee is responsible for,among other things:

• selecting the independent registered public accounting firm and pre-approving allauditing and non-auditing services permitted to be performed by the independentregistered public accounting firm;

• reviewing with the independent registered public accounting firm any audit problems ordifficulties and management’s response;

• reviewing and approving all proposed related party transactions, as defined in Item 404of Regulation S-K under the Securities Act;


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• discussing the annual audited financial statements with management and the independentregistered public accounting firm;

• reviewing major issues as to the adequacy of our internal controls and any special auditsteps adopted in light of material control deficiencies;

• annually reviewing and reassessing the adequacy of our audit committee charter;

• meeting separately and periodically with management and the independent registeredpublic accounting firm; and

• reporting regularly to the board.

Compensation committee

Our compensation committee consists of Mr. Pehong Chen and Mr. P Christopher Lu, and ischaired by Mr. Chen. Mr. Chen and Mr. Lu satisfy the “independence” requirements of Rule5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. The compensation committeeassists the board in reviewing and approving the compensation structure, including all formsof compensation, relating to our directors and executive officers. Our chief executive officermay not be present at any committee meeting during which his compensation is deliberated.The compensation committee is responsible for, among other things:

• reviewing the total compensation package for our executive officers and makingrecommendations to the board with respect to it;

• approving and overseeing the total compensation package for our executives other thanthe three most senior executives;

• reviewing the compensation of our directors and making recommendations to the boardwith respect to it; and

• periodically reviewing and approving any long-term incentive compensation or equityplans, programs or similar arrangements, annual bonuses, and employee pension andwelfare benefit plans.

Duties of Directors

Under Cayman Islands law, our directors owe fiduciary duties to our company, including a dutyof loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to bein our best interests. Our directors also have a duty to exercise the skill they actually possessand such care and diligence that a reasonably prudent person would exercise in comparablecircumstances. In fulfilling their duty of care to us, our directors must ensure compliance withour memorandum and articles of association and the class rights vested thereunder in theholders of the shares. We have the right to seek damages if a duty owed by our directors isbreached. In limited exceptional circumstances, a shareholder may have the right to seekdamages in our name if a duty owed by our directors is breached.


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Terms of Directors and Officers

Our officers are elected by and serve at the discretion of the board. Our directors may beappointed by the board or by the shareholders through ordinary resolutions. Any directorappointed by the board to fill a vacancy or as a new addition to the board shall hold office onlyuntil our next annual general meeting and shall then be eligible for re-election at that meeting.After the completion of our initial public offering, at each annual general meeting of ourcompany, one-third of our directors at the time, or, if their number is not three or a multipleof three, then the number nearest to, but not less than, one-third, shall retire from office byrotation. The directors to retire in every year shall be those who have been longest in officesince their last election but as between persons who became directors on the same day thoseto retire shall be determined by lot, unless they otherwise agree between themselves. A retiringdirector shall retain office until the close of the meeting at which he retires, and shall beeligible for re-election at the annual general meeting. A director may be removed at any timebefore the expiration of his period of office by an ordinary resolution of our shareholders. Adirector will be removed from office automatically if, among other things, the director (1)becomes bankrupt or has a receiving order made against him or suspends payment orcompounds with his creditors generally; (2) dies or an order is made by any competent courtor official on the grounds that he is or may be suffering from mental disorder or is otherwiseincapable of managing his affairs and the board of directors resolves that his office be vacated;(3) without leave, is absent from meetings of the board for a continuous period of 12 months,and the board resolves that his office be vacated; (4) ceases to be or is prohibited from beinga director by law or by virtue of any provisions in our articles of association; or (5) is removedfrom office by notice in writing served upon him signed by not less than three-fourths innumber (or, if that is not a round number, the nearest lower round number) of our directors(including himself) then in office. In addition, Ali WB Investment Holding Limited hasobtained certain board representation rights.

Code of ethics

We have adopted a Code of Business Conduct and Ethics which applies to our directors,officers and employees, including our principal executive officer and principal financialofficer. We have posted the corporate code on our website at http://ir.weibo.com/.


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The following table sets forth information concerning the beneficial ownership of our ordinaryshares as of September 30, 2021, by:

• each of our directors and executive officers; and

• each person known to us to beneficially own more than 5% of our ordinary shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC.In computing the number of shares beneficially owned by a person and the percentageownership of that person, we have included shares that the person has the right to acquirewithin 60 days, including through the exercise of any option, warrant, or other right or theconversion of any other security. These shares, however, are not included in the computationof the percentage ownership of any other person.

The calculations in the table below is based on 229,091,789 ordinary shares issued andoutstanding as of September 30, 2021, comprising of 127,312,831 Class A ordinary shares and101,778,958 Class B ordinary shares.

Ordinary SharesBeneficially Owned

VotingPower

Number %(1) %(2)

Directors and Executive Officers:**Charles Chao �� * * *Hong Du �� * * *Daniel Yong Zhang �� - - -P Christopher Lu �� * * *Pehong Chen �� * * *Gaofei Wang�� * * *Yan Wang �� * * *Fei Cao �� * * *Wei Wang �� * * *Zenghui Cao �� * * *All directors and executive officers

as a group �� 2,670,234 1.2% *Principal Shareholders:SINA Corporation(3)�� 101,778,958 44.4% 70.6%Ali WB Investment Holding Limited(4) �� 67,883,086 29.6% 15.7%

Notes:

* Less than 1% of our total outstanding shares.

** The business address for Charles Chao and Hong Du is No. 8 SINA Plaza, Courtyard 10, the West, XibeiwangE. Road Haidian District, Beijing 100193, People’s Republic of China.

(1) For each person and group included in this column, percentage ownership is calculated by dividing the numberof ordinary shares beneficially owned by such person or group, including shares that such person or group hasthe right to acquire within 60 days after September 30, 2021, by the sum of (1) 229,091,789 which is the totalnumber of ordinary shares outstanding as of September 30, 2021 and (2) the number of ordinary shares thatsuch person or group has the right to acquire within 60 days after September 30, 2021.

MAJOR SHAREHOLDERS

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(2) For each person or group included in this column, the percentage of total voting power represents voting powerbased on both Class A and Class B ordinary shares held by such person or group with respect to all of ouroutstanding Class A and Class B ordinary shares as one class as of September 30, 2021. Each holder of ClassA ordinary shares is entitled to one vote per share, and each holder of Class B ordinary shares is entitled tothree votes per share on all matters subject to a shareholders’ vote. Our Class B ordinary shares are convertibleat any time by the holder into Class A ordinary shares on a one-for-one basis, whereas Class A ordinary sharesare not convertible into Class B ordinary shares under any circumstances.

(3) Represents 101,778,958 Class B ordinary shares. SINA Corporation is incorporated in the Cayman Islands. Thebusiness address of SINA Corporation is SINA Plaza, No. 8 Courtyard 10, the West Xibeiwang E. Road,Haidian District, Beijing 100193, People’s Republic of China. On March 22, 2021, New Wave MergersubLimited (a wholly owned subsidiary of Sina Group Holding Company Limited, formerly known as New WaveHoldings Limited) merged with and into SINA, with SINA continuing as the surviving company. As a resultof this merger, SINA became a wholly owned subsidiary of Sina Group Holding Company Limited, which isa wholly owned subsidiary of New Wave MMXV Limited (“New Wave”), a business company incorporatedin the British Virgin Islands and controlled by Mr. Charles Chao. As of the date of this document, New Wavewas owned as to 61.2% by Mr. Charles Chao, 30.0% by Mr. Yunli Liu and the remaining shares were held byother senior management members of SINA, including Ms. Hong Du, Mr. Gaofei Wang and Ms. Bonnie YiZhang, each of whom held less than 5% of the total share capital of New Wave. All the voting shares in NewWave were held by Mr. Charles Chao, and the rest were all non-voting shares. Following the completion ofthe merger, SINA has ceased to be a reporting company under the Exchange Act and its shares have ceasedtrading on NASDAQ.

(4) Represents (1) 58,883,086 Class A ordinary shares and (2) 9,000,000 Class A ordinary shares represented byADSs. Such shareholding information is based on the information contained in the Schedule 13D filed by AliWB with the SEC on September 9, 2016.

To our knowledge, as of September 30, 2021, we had 68,415,156 ordinary shares outstandingon an as converted basis that were held by 27 record holders in the United States, including thedepositary of our ADS program. The number of beneficial owners of our ADSs in the UnitedStates is likely to be much larger than the number of record holders of our ordinary shares inthe United States. None of our shareholders has informed us that it is affiliated with aregistered broker-dealer or is in the business of underwriting securities. We are not aware ofany arrangement that may, at a subsequent date, result in a change of control of our company.

MAJOR SHAREHOLDERS

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We are seeking a listing on the Hong Kong Stock Exchange pursuant to Chapter 19C ofthe Hong Kong Listing Rules. Pursuant to Rule 19C.11 of the Hong Kong Listing Rules,Chapter 14A of the Hong Kong Listing Rules, governing connected transactions, does notapply to us. The following discussion of related party transactions has been preparedpursuant to the requirements of Form 20-F of the SEC, and is included in this documentfor disclosure purposes only.

SINA and Ali WB Investment Holding Limited (“Ali WB”) are currently the two largestshareholders of our company. Below are summaries of our relationship with these twoshareholders.

OUR RELATIONSHIP WITH SINA

We are a controlled subsidiary of SINA. On March 22, 2021, New Wave Mergersub Limited(a wholly owned subsidiary of Sina Group Holding Company Limited, formerly known as NewWave Holdings Limited) merged with and into SINA, with SINA continuing as the survivingcompany. As a result of this merger, SINA became a wholly owned subsidiary of Sina GroupHolding Company Limited, which is a wholly owned subsidiary of New Wave MMXV Limited,a business company incorporated in the British Virgin Islands and controlled by Mr. CharlesChao. Following the completion of the merger, SINA has ceased to be a reporting companyunder the Exchange Act and its shares have ceased trading on NASDAQ.

We have entered into agreements with SINA with respect to various ongoing relationshipsbetween us after our initial public offering. These agreements include a master transactionagreement, a transitional service agreement, a non-competition agreement, and a sales andmarketing services agreement. The following are summaries of these agreements and of anintellectual property license agreement that we entered into with SINA in April 2013.

(i) Master Transaction Agreement

The master transaction agreement contains provisions relating to our carve-out from SINA.Pursuant to this agreement, we are responsible for all financial liabilities associated with thecurrent and historical social media business and operations that have been conducted by ortransferred to us, and SINA is responsible for financial liabilities associated with all of SINA’sother current and historical businesses and operations, in each case regardless of the time thoseliabilities arise. The master transaction agreement also contains indemnification provisionsunder which we and SINA indemnify each other with respect to breaches of the mastertransaction agreement or any related inter-company agreement.

In addition, we have agreed to indemnify SINA against liabilities arising from misstatementsor omissions in our prospectus dated April 16, 2014 or the registration statement of which itis a part, except for misstatements or omissions relating to information that SINA provided tous specifically for inclusion in our prospectus dated April 16, 2014 or the registration statementof which it forms a part. We also have agreed to indemnify SINA against liabilities arising fromany misstatements or omissions in our subsequent SEC filings and from information weprovide to SINA specifically for inclusion in SINA’s annual reports or other SEC filingsfollowing the completion of our initial public offering, but only to the extent that theinformation pertains to us or our business or to the extent SINA provides us prior written noticethat the information will be included in its annual reports or other subsequent SEC filings andthe liability does not result from the action or inaction of SINA. Similarly, SINA willindemnify us against liabilities arising from misstatements or omissions in its subsequent SEC


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filings or with respect to information that SINA provided to us specifically for inclusion in ourprospectus dated April 16, 2014, the registration statement of which our prospectus dated April16, 2014 forms a part, or our annual reports or other SEC filings following the completion ofour initial public offering.

The master transaction agreement also contains a general release, under which the parties willrelease each other from any liabilities arising from events occurring on or before the initialfiling date of the registration statement of which our prospectus dated April 16, 2014 forms apart, including in connection with the activities to implement of our initial public offering. Thegeneral release does not apply to liabilities allocated between the parties under the mastertransaction agreement or the other inter-company agreements.

Furthermore, under the master transaction agreement, we have agreed to use our reasonablebest efforts to use the same independent certified public accounting firm selected by SINA andto maintain the same fiscal year as SINA until the first SINA fiscal year-end following theearlier of (1) the first date when SINA no longer owns at least 20% of the voting power of ourthen outstanding securities and (2) the first date when SINA ceases to be the largest beneficialowner of our then outstanding voting securities (without considering holdings by certaininstitutional investors). We refer to this earlier date as the control ending date. We also haveagreed to use our reasonable best efforts to complete our audit and provide SINA with allfinancial and other information on a timely basis so that SINA may meet its deadlines for itsfiling of annual and quarterly financial statements.

Under the master transaction agreement, the parties also agree to cooperate in sharinginformation and data collected from each party’s business operation, including withoutlimitation user information and data relating to user activities. The parties agree not to chargeany fees for their cooperation provided under the agreement unless they separately andexplicitly agree otherwise.

The master transaction agreement will automatically terminate five years after the first dateupon which SINA ceases to own in aggregate at least 20% of the voting power of our thenoutstanding securities, provided that the agreement on sharing information and data willterminate on the earlier of (1) the fifteenth anniversary of the commencement of thecooperation period or (2) five years after the first date upon which SINA ceases to own inaggregate at least 20% of the voting power of our then outstanding securities. This agreementcan be terminated early or extended by mutual written consent of the parties. The terminationof this agreement will not affect the validity and effectiveness of the transitional servicesagreement, the non-competition agreement and the sales and marketing services agreement.This agreement remains valid as of the date of this document and is expected to remain validupon the Listing.

(ii) Transitional Services Agreement

Under the transitional services agreement, SINA agrees that, during the service period, asdescribed below, SINA will provide us with various corporate support services, including butnot limited to:

• administrative support, including but not limited to secretarial support, eventmanagement, conference management, and other day-to-day office support services;


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• operational management support, including but not limited to management, supervisionand instruction of the operation of sales and marketing, product development and generaladministration;

• legal support, including but not limited to support services in respective of contractmanagement, risk control, compliance and other corporate legal matters;

• technology support, including but not limited to network design, optimization andmaintenance, system (such as EPR and CRM systems) support and upgrade, technologyand infrastructure support (such as IDC rental), management of information technologyequipment, technical support and disaster recovery, and complementary productdevelopment; and

• provision of office facilities.

SINA also may provide us with additional services that we and SINA may identify from timeto time in the future.

The price to be paid for the services provided under the transitional service agreement will becharged based on the actual cost incurred by SINA in the provision of such services, which canbe classified into direct and indirect costs. Direct costs include labor-related compensationwhich represents the head counts and work hours that SINA’s employees have dedicated to theprovision of the relevant services to our Company, as well as the travel expenses and materialsand supplies consumed in performing the services. Indirect costs include office occupancy,information technology, sharing of bandwidth provided by third party service providers,supervision and other overhead costs of the department incurring the direct costs of providingthe services apportioned based on the proportionate utilization rate. We believe the cost-basedcharges would be on better terms compared to those that may be offered by other independentthird party service providers.

The transitional service agreement provides that the performance of a service according to theagreement will not subject the provider of such service to any liability whatsoever except asdirectly caused by the gross negligence or willful misconduct of the service provider. Liabilityfor gross negligence or willful misconduct is limited to the lower of the price paid for theparticular service or the cost of the service’s recipient performing the service itself or hiringa third party to perform the service. Under the transitional services agreement, the serviceprovider of each service is indemnified by the recipient against all third-party claims relatingto provision of services or the recipient’s material breach of a third-party agreement, exceptwhere the claim is directly caused by the service provider’s gross negligence or willfulmisconduct.

The service period under the transitional services agreement commences on March 14, 2014,ended on the expiration of five years thereafter, and has been extended for another five yearsby the parties, therefore will remain valid upon the Listing.


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The following table sets forth the details of cost and expenses allocated from SINA for theperiods presented.

For the Year Ended December 31,

For theSix Months

EndedJune 30,

2018 2019 2020 2021

(in US$ thousands)Cost and expenses

allocated fromSINA �� 47,334 51,848 43,011 18,603

In addition to the allocated costs and expense, SINA billed US$23.4 million, US$37.5 million,US$48.3 million and US$21.9 million for other costs and expenses incurred by us but paid bySINA in 2018, 2019, 2020 and the six months ended June 30, 2021, respectively.

(iii) Non-competition Agreement

Our non-competition agreement with SINA provides for a non-competition period beginningupon the completion of our initial public offering and ending on the later of (1) five years afterthe first date upon which members of SINA and its subsidiaries and consolidated affiliatedentities cease to own in aggregate at least 20% of the voting power of our then outstandingsecurities and (2) fifteenth anniversary of the completion of our initial public offering. Thisagreement can be terminated early by mutual written consent of the parties. This agreementremains valid as of the date of this document and is expected to remain valid upon the Listing.

SINA has agreed not to compete with us during the non-competition period in the business thatis of the same nature as the microblogging and social networking business operated by us asof the date of the agreement, except for owning non-controlling equity interest in any companycompeting with us. We have agreed not to compete with SINA during the non-competitionperiod in the businesses currently conducted by SINA, as described in its periodic filings withthe SEC, other than the microblogging and social networking business currently operated byus as of the date of the agreement, except for owning non-controlling equity interest in anycompany competing with SINA.

The non-competition agreement also provides for a mutual non-solicitation obligation thatneither SINA nor we may, during the non-competition period, hire, or solicit for hire, anyactive employees of or individuals providing consulting services to the other party, or anyformer employees of or individuals providing consulting services to the other party within sixmonths of the termination of their employment or consulting services, without the other party’sconsent, except for solicitation activities through generalized non-targeted advertisement notdirected to such employees or individuals that do not result in a hiring within thenon-competition period.


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(iv) Sales and Marketing Services Agreement

Under our sales and marketing services agreement with SINA, we agree that SINA will be oursales and marketing agent within the service period commencing on the date of signing andending on the earlier of (1) the fifteenth anniversary of the commencement of the serviceperiod or (2) five years after the first date upon which SINA and any entity controlled by SINAcease to collectively own in aggregate at least 20% of the voting power of our then outstandingsecurities. This agreement remains valid as of the date of this document and is expected toremain valid upon the Listing.

The fee to be reimbursed for the services provided under this agreement shall be the reasonablyallocated direct and indirect costs of providing such services. Direct costs include labor-relatedcompensation and travel expenses and materials and supplies consumed in performing theservices. Indirect costs include office occupancy, information technology support and otheroverhead costs of the department incurring the direct costs of providing the service.

(v) Intellectual Property License Agreement

The intellectual property license agreement was entered into by and between SINA and us asa part of Ali WB’s purchase of our ordinary and preferred shares in April 2013. Under theintellectual property license agreement, SINA grants us and our subsidiaries a perpetual,worldwide, royalty-free, fully paid-up, non-sublicensable, non-transferable, limited, exclusivelicense of trademarks, including “ ”, “ ” and “ ”, and a non-exclusivelicense of certain other intellectual property owned by SINA to make, sell, offer to sell anddistribute products, services and applications on a microblogging and social networkingplatform. We grant SINA and its affiliates a non-exclusive, perpetual, worldwide, non-sublicensable, non-transferable limited license of certain of our intellectual property to use,reproduce, modify, prepare derivative works of, perform, display or otherwise exploit suchintellectual property. This agreement commenced on April 29, 2013 and will continue in effectunless and until terminated as provided in the agreement. This agreement remains valid as ofthe date of this document and is expected to remain valid upon the Listing. Neither party isrequired to pay any fees under this agreement, and, apart from the licenses and rights set forthin the agreement, there will be no other exchange of value in connection with this agreement.

(vi) SINA’s Registration Rights

SINA has the same registration rights as those that have been granted to Ali WB. See below“— Our Relationship with Alibaba — (iv) Registration Rights Agreement.”

OUR RELATIONSHIP WITH ALIBABA

In April 2013, concurrently with forming a strategic alliance with several of our affiliatedentities, Alibaba invested US$585.8 million through Ali WB, its wholly owned subsidiary, topurchase our ordinary and preferred shares representing approximately 18% of our then totaloutstanding shares on a fully diluted basis. The following are summaries of our strategicalliance with Alibaba and major rights that Ali WB has as our shareholder.

(i) Strategic Collaboration with Alibaba

In April 2013, we entered into a strategic collaboration agreement and a marketing cooperationagreement to form a strategic alliance between several of our affiliated entities, includingWeibo Technology, Weimeng, and Beijing SINA Internet Information Service Co., Ltd., anaffiliate of SINA, and several entities affiliated with Alibaba, including Alibaba (China) Co.,


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Ltd., Taobao (China) Software Co., Ltd., Zhejiang Tmall.com Technology Co., Ltd. andAlibaba (China) Technology Co., Ltd., to jointly explore social commerce and developinnovative marketing solutions to enable merchants on Alibaba e-commerce platforms to betterconnect and build relationships with Weibo users. Under these agreements, the parties agreedto cooperate on a non-exclusive basis in respect of user account sharing, data sharing, platformintegration, product development, payment supporting for both personal computer and mobilebusinesses, marketing activities and other aspects of the parties’ businesses. The strategiccollaboration agreement and marketing cooperation agreement expired in January 2016.However, Alibaba still remains as our largest customer, and we rely on them to enable us tooffer e-commerce advertisement solutions to their merchants.

(ii) Shareholders’ Agreement

Concurrently with Alibaba’s purchase of our ordinary and preferred shares in April 2013, weentered into a shareholders’ agreement with Ali WB and SINA which regulates ourshareholders’ rights and obligations after Ali WB became our shareholder, which agreementwas amended and restated in March 2014. This agreement will continue in effect unless it isterminated: (i) by written agreement among the parties; or (ii) upon the expiration of (A) allrights created under this agreement and (B) all statutes of limitations applicable to theenforcement of claims under this agreement. This agreement remains valid as of the date of thisdocument and is expected to remain valid upon the Listing. The following are summaries ofcertain rights that Ali WB is entitled to under the shareholders’ agreement which continue tobe valid after the completion of our initial public offering.

Ali WB’s Rights Relating to Share Incentive Plan. Until the earlier of (1) April 21, 2019, the5th anniversary of our initial public offering, and (2) certain investor exit events defined underthe shareholders agreement, we are not permitted to revise our equity-based incentive plans,including our 2014 Share Incentive Plan to increase the number of securities issuable undersuch plans or adopt any new plan without the prior written consent of Ali WB. These rightshave expired in April 2019.

Ali WB’s Right of First Offer. Ali WB has the right of first offer if (1) SINA or any of its whollyowned subsidiaries desires to sell all or any portion of our shares it holds to a third party otherthan up to 7,000,000 ordinary shares, or (2) any management shareholder desires to sell all orany portion of our shares such shareholder holds to a third party other than up to 20% of theordinary shares held by such shareholder as of April 29, 2013. These rights remain valid as ofthe date of this document and are expected to remain valid upon the Listing.

Ali WB’s Board Representation Rights. After Ali WB exercised its option in full, it has the rightto appoint a number of directors in proportion to the percentage of its ownership in ourcompany. SINA and Ali WB have entered into a voting agreement to effect the boardrepresentation rights. See “— (iii) Voting Agreement” below. These rights remain valid as ofthe date of this document and are expected to remain valid upon the Listing.

(iii) Voting Agreement

Pursuant to the voting agreement entered into by SINA and Ali WB on April 24, 2014, Ali WBhas the right to appoint or nominate such number of directors as is proportional to thepercentage of its ownership in our company on a fully diluted basis (such number of directorsto be rounded down the closest integer). Nevertheless, the number of non-independent directorsAli WB is entitled to appoint or nominate shall be no fewer than one director but no greaterthan the number of directors appointed or nominated by SINA as long as Ali WB holds less ourshares than SINA. Ali WB’s board representation rights will terminate in the event that more


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than 50% of its acquired shares, being the total shares of our company acquired by Ali WB inApril 2013 and through the exercise of Ali WB’s option under the shareholders’ agreement, aretransferred by Ali WB or its permitted transferees to one or more third parties or are no longerheld by Alibaba directly, or indirectly through certain subsidiaries. Ali WB may assign itsboard representation rights to a qualified new investor to whom Ali WB transfers at least 50%of its acquired shares and who meets the requirements set forth in the shareholders agreementand the directors to be appointed by such new qualified investor must meet qualifications setforth in the voting agreement. These rights remain valid as of the date of this document andare expected to remain valid upon the Listing. In May 2014, Mr. Daniel Yong Zhang wasappointed by Ali WB as a director of our company.

(iv) Registration Rights Agreement

We have entered into a registration rights agreement with SINA and Ali WB. Under theregistration rights agreement, each of SINA and Ali WB has the right to require us to registerthe public sale of all the shares owned by them as well as the right to participate in registrationsof shares by us or any of our other shareholders. SINA and Ali WB have customary rights underthe registration rights agreement, such as no more than two (2) demand registration rights,unlimited piggyback registration rights, shelf registration rights and rights to request us to payregistration expenses and to bear indemnification liability. The registration rights granted toSINA or Ali WB under this agreement shall terminate when all of their registrable securitiesmay be sold without restriction or limitation under Rule 144. The Registration RightsAgreement will continue in effect unless it is terminated by written agreement among theparties. This agreement remains valid as of the date of this document and is expected to remainvalid upon the Listing.

CERTAIN RIGHTS GRANTED TO SINA AND ALIBABA IN LIGHT OF OURRELATIONSHIP WITH THEM

Prior to our initial public offering in the United States in April 2014, SINA provided us withfinancial, administrative, sales and marketing, human resources and legal services and supportin other administerial functions. After we became a public company on Nasdaq in April 2014,to ensure our continued stable business operation with respect to various ongoing relationshipsbetween us after our initial public offering, we entered into agreements with SINA to cover thetransition services and supporting functions to be provided by SINA.

Alibaba invested US$585.8 million in us through Ali WB in April 2013, representingapproximately 18% of our then outstanding shares on a fully diluted basis. After thisinvestment, Alibaba became our second largest shareholder. Alibaba concurrently formedstrategic cooperation arrangements with several of our affiliated entities. In light of theconsiderable amount of investment from Alibaba and our business synergies with Alibaba afterour strategic collaboration with Alibaba to jointly explore social commerce and developinnovative marketing solutions, we granted Ali WB certain shareholder rights in theshareholders’ agreement, which was amended and restated in March 2014 in relation to ourinitial public offering in the United States in April 2014, relating to right of first offer, boardrepresentation, share incentive plan and resale registration.

The board of directors of our company has approved our transactions with SINA and Alibabaas described under the headings of “Our Relationship with SINA” and “Our Relationship withAlibaba” in this section titled “Related Party Transactions” and their respective terms beforedefinitive transaction documents related thereto was entered into. We are of the view that thethen Directors have exercised their fiduciary duties in these transactions, and have acted in thebest interests of our company and the shareholders as a whole. Accordingly, we are of the view


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that the terms of the aforementioned transactions, including the special rights granted toshareholders, are in the interest of our company and the shareholders as a whole. The grant ofrights to SINA and Ali WB in connection with the transactions and agreements as summarizedunder headings of “Our Relationship with SINA” and “Our Relationship with Alibaba” in thissection titled “Related Party Transactions” does not contravene with the shareholders’protection requirements under Rule 19C.07 of the Hong Kong Listing Rules, the U.S. securitieslaws and regulations and Nasdaq listing rules, and does not contravene with relevant laws,rules and regulations in the Cayman Islands.

Sponsors’ confirmation

The Joint Sponsors have reviewed the relevant agreements and corporate documents in relationto the grant of the special rights set out in the paragraph headed “Certain Rights Granted ToSINA And Alibaba In Light Of Our Relationship With Them” above, have participated indiscussions with the Company’s management on the commercial reasons for the granting of thespecial rights and have discussed with the Company’s management and the relevant legaladvisors on the Company’s compliance with shareholders’ protection requirements and relevantlaws and regulations. Based on the above, the Joint Sponsors are of the view that nothing hascome to their attention that would lead them to cast doubt on the conclusion of the Companythat (i) it is in the interest of the Company and its Shareholders as a whole to grant the specialrights; (ii) the Company’s Directors have exercised their fiduciary duties in granting of thespecial rights, and have acted in the best interests of the Company and its Shareholders as awhole; and (iii) the granting of the special rights does not contravene with the shareholders’protection requirements under Rule 19C.07 of the Hong Kong Listing Rules. Although the JointSponsors are not legal experts, based on the above and having discussed with the Company’sCayman counsel and U.S. counsel, nothing has come to the Joint Sponsors’ attention that wouldlead them to cast doubt on the conclusion of the Company that the granting of the special rightsdoes not violate the applicable laws and regulations in the Cayman Islands, the relevant U.S.federal securities law and the Nasdaq Listing Rules.

CONTRACTUAL ARRANGEMENTS

Current PRC laws and regulations impose substantial restrictions on foreign ownership ofinternet information services and value-added telecommunication service businesses in China.Therefore, we conduct part of our businesses through a series of agreements between our PRCsubsidiaries, our consolidated affiliated Chinese entities and/or their respective shareholders.See “History and Corporate Structure — Corporate Structure — Contractual Arrangements” fora summary of the contractual arrangements entered into between Weibo Technology, Weimeng,Weimeng Chuangke and their shareholders.

TRANSACTIONS WITH SINA

During the six months ended June 30, 2021, we recorded US$36.3 million in revenues billedthrough SINA to third parties/for services provided to SINA. We had costs and expensesallocated from SINA of US$18.6 million and another US$21.9 million billed by SINA for othercosts and expenses associated with Weibo business. In addition, we allocated US$1.5 millionto SINA for costs and expenses related to certain of SINA’s activities for which Weibo madethe payments. As of June 30, 2021, the outstanding balance of amounts due from SINA(excluding loans to and interest receivable from SINA) was US$18.0 million. We entered intoa letter of intent to purchase the office building (SINA Plaza) from SINA. As of June 30, 2021,the balance of prepayment for SINA Plaza was US$131.6 million.


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During the six months ended June 30, 2021, we entered in to a series of one-year loanagreements with SINA, pursuant to which SINA is entitled to withdraw loans from us tofacilitate SINA’s business operations. In the first half of 2021, SINA has withdrawn a total ofUS$310.9 million of loans from us and repaid US$388.4 million to us while we recognizedUS$10.0 million interest income on the loans to SINA. As of June 30, 2021, the outstandingbalance of the loans to and interest receivable from SINA was US$480.7 million.

During 2020, we recorded US$62.1 million in revenues billed through SINA to thirdparties/from SINA. The advertising and marketing revenues from SINA decreased fromUS$113.0 million in 2019 to US$48.4 million in 2020, as we started to offer services directlyto advertisers in certain industries since 2020, leading to the decrease of revenues billedthrough SINA. We had costs and expenses allocated from SINA of US$43.0 million andUS$48.3 million billed by SINA for other costs and expenses associated with Weibo business.In addition, we allocated US$9.7 million to SINA for costs and expenses related to certain ofSINA’s activities for which Weibo made the payments. As of December 31, 2020, theoutstanding balance of amounts due from SINA (excluding loans to and interest receivablefrom SINA) was US$1.0 million.

In 2020, we entered into a series of one-year loan agreements with SINA, pursuant to whichSINA is entitled to withdraw loans from us to facilitate SINA’s business operations. In 2020,SINA has withdrawn a total of US$473.8 million of loans from us and repaid US$181.7 millionto us while we recognized US$13.5 million interest income on the loans to SINA. As ofDecember 31, 2020, the outstanding balance of the loans to and interest receivable from SINAwas US$547.9 million.

During 2019, we recorded US$137.2 million in revenues billed through SINA to thirdparties/from SINA. We had costs and expenses allocated from SINA of US$51.8 million andUS$37.5 million billed by SINA for other costs and expenses associated with Weibo business.In addition, we had amounts due from SINA (excluding loans to and interest receivable fromSINA) of US$148.2 million as of December 31, 2019.

In 2019, we entered in to a series of one-year loan agreements with SINA, pursuant to whichSINA is entitled to withdraw loans from us to facilitate SINA’s business operations. In 2019,SINA has withdrawn a total of US$233.9 million of loans from us and repaid US$43.6 millionto us and we recognized US$9.3 million interest income on the loans to SINA. As of December31, 2019, the outstanding balance of the loans to and interest receivable from SINA wasUS$236.6 million.

During 2018, we recorded US$90.6 million in revenues billed through SINA to thirdparties/from SINA. We had costs and expenses allocated from SINA of US$47.3 million andUS$23.4 million billed by SINA for other costs and expenses associated with Weibo business.In addition, we had amounts due from SINA (excluding loans to and interest receivable fromSINA) of US$61.7 million as of December 31, 2018.

SINA made a US$2.0 million short-term loan to Weibo in 2017, which was repaid to SINA in2018. In 2018, we entered in to a series of one-year loan agreements with SINA, pursuant towhich SINA is entitled to withdraw loans from us to facilitate SINA’s business operations. In2018, SINA has withdrawn a total of US$149.5 million of loans from us and repaid US$101.1million to us and we recognized US$2.4 million interest income on loans to SINA. As ofDecember 31, 2018, the outstanding balance of the loan extended by us to SINA was US$43.6million.


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To better utilize human resources, some of our employees also provided services to SINA, andwe may allocate part of the labor costs based on the proportion of their work time to SINA.Furthermore, from time to time, we entered into several contracts with vendors whose servicesbenefit Weibo and SINA simultaneously since 2020 and we allocated part of the cost andexpenses to SINA for the services related to SINA’s activities based on the proportion as agreedby mutual managements, such as the work time dedicated to providing services to SINA.

SINA has established branches at provincial level and in several economically developed citiesacross China, which generally have good operation records and strong sales and marketingteams with experienced local staff. Due to the good and stable cooperation between SINA localbranches with the local customers, we use SINA’s branches as our sales and marketing agentsat these regional markets. Therefore, we billed revenue through SINA for services provided tothese customers.

The following table sets forth the details of the revenues billed through SINA and the revenuefrom services provided to SINA for the periods specified.


Ended June 30,

2018 2019 2020 2020 2021


Revenue billed through SINA �� 78,821 109,949 41,754 23,712 24,586Revenue from services provided to

SINA �� 11,824 27,274 20,348 11,534 11,707

Total revenues from SINA�� 90,645 137,223 62,102 35,246 36,293

The following table sets forth the details of the revenues from SINA by advertising andmarketing revenues and value-added services revenues for the periods specified.

Year Ended December 31,Six Months Ended

June 30,

2018 2019 2020 2020 2021


Advertising and marketing revenues�� 79,148 112,974 48,353 27,624 30,931Value-added services revenues �� 11,497 24,249 13,749 7,622 5,362

Total revenues from SINA�� 90,645 137,223 62,102 35,246 36,293

The one-year loan agreements between us and SINA during the Track Record Period generallymature within one year from the date that SINA received the loans, with annual interest ratesranging from 1.0% to 4.8%, and the repayments of the loans before the maturity dates areallowed under mutual agreement. The one-year loan agreements between us and SINA weremade based on mutual consent, without additional condition precedent for SINA to satisfy, orany amount limit or timing restriction, before SINA is entitled to draw loans. We made theseloans to SINA to meet its short-term capital needs. We have the right to demand repaymentunder certain circumstances when the financial situation of SINA is deemed deteriorating or


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materially negatively impacted. We regularly ask SINA to provide its financial information forus to understand its financial positions so as to assess the recoverability of the loans to SINA.During the Track Record Period, SINA has repaid substantially all the principal loan amountsand accrued interests on time in accordance with the respective loan agreements. During theTrack Record Period, SINA has requested to, and we have agreed to, extend the maturity ofcertain loan agreements for no more than one year after the respective original maturity date.We have prudently assessed the financial position of SINA before making loans and agreeingto the extension to assess the recoverability of the outstanding balance. Specifically, we noticedthat SINA has been holding equity interests in several public companies. Based on the publicinformation, the fair value of these equity interests in public companies exceeded the balanceof our loans to SINA during the Track Record Period. The following table sets forth the detailsof the loans made to SINA for the periods specified.

For the Year Ended December 31,

For theSix Months

EndedJune 30,

2018 2019 2020 2021

(in US$ thousands)Balance at the beginning of

the year/period �� – 43,614 236,623 547,935New loans to SINA �� 149,460 233,884 473,777 310,923Repayment of loans by

SINA �� (101,060) (43,567) (181,697) (388,354)Interest receivable accrued �� 2,425 9,295 13,458 9,994Interest received �� (1,395) (1,494) (12,633) (6,426)Currency translation

adjustments �� (5,816) (5,109) 18,407 6,590

Balance at the end of theyear/period �� 43,614 236,623 547,935 480,662

Accounts receivable amounts directly related to Weibo but for which SINA will receivepayments and remit payments to us, as well as accounts receivable directly from SINA areincluded in the amount due from SINA. Liabilities directly related to Weibo but for whichSINA will make payments and receive reimbursements from us, as well as liabilities directlyto SINA, are included in the amount due to SINA. The amount due from or the amount due toSINA is presented as an offsetting balance on our consolidated balance sheets. Loan from SINAis presented under cash flow from financing activities, whereas loan to SINA is presented underinvesting activities in the consolidated statements of cash flows. Cash payment for billingsfrom SINA for costs and expenses allocated to Weibo is presented under operating activitiesin the consolidated statements of cash flows.

Costs and expenses allocated from SINA represent services that were provided by varioussubsidiaries and VIEs of SINA. The service fees were incurred using an allocationmethodology based on proportional utilization. See “— Our Relationship with SINA” and“Financial Information — Critical Accounting Policies and Estimates — Basis of Presentationand Use of Estimates.”


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TRANSACTIONS WITH ALIBABA

During the six months ended June 30, 2021, we recorded US$73.3 million in advertising andmarketing revenues from Alibaba and US$21.5 million of cost and expenses for the servicesprovided by Alibaba. One of Alibaba’s subsidiaries engaged in the business of advertisingagency contributed another US$36.7 million to our total revenues during the six months endedJune 30, 2021. As of June 30, 2021, we had a total of US$123.0 million in accounts receivabledue from Alibaba.

During 2020, we recorded US$152.0 million in advertising and marketing revenues fromAlibaba and US$52.3 million of cost and expenses for the services provided by Alibaba. Oneof Alibaba’s subsidiaries engaged in the business of advertising agency contributed anotherUS$36.6 million to our total revenues in 2020. As of December 31, 2020, we had a total ofUS$135.3 million in accounts receivable due from Alibaba.

During 2019, we recorded US$97.8 million in advertising and marketing revenues fromAlibaba and US$50.2 million of cost and expenses for the services provided by Alibaba. As ofDecember 31, 2019, we had US$60.4 million in accounts receivable due from Alibaba.

During 2018, we recorded US$117.7 million in advertising and marketing revenues fromAlibaba. As of December 31, 2018, we had US$48.2 million in accounts receivable due fromAlibaba.

TRANSACTIONS WITH OTHER RELATED PARTIES

During the six months ended June 30, 2021, other than revenues generated from SINA andAlibaba, we recorded US$23.6 million in revenues from other related parties and US$20.2million in cost and expenses for services received from other related parties. As of June 30,2021, we had outstanding balances related to other related parties of US$41.0 million inaccounts receivable, US$28.7 million in accounts payable, and US$5.4 million in accrued andother liabilities. Moreover, we recorded loans to and interest receivables from other relatedparties of US$336.6 million at annual interest rates ranging from 3.5% to 5.5% as of June 30,2021, with maturity within one year. These other related parties mainly included an equityinvestee in e-commerce business, accounting US$18.5 million, and an investee providingonline brokerage services, accounting US$270.9 million of the outstanding balance as of June30, 2021.

During 2020, other than revenues generated from SINA and Alibaba, we recorded US$49.9million in revenues from other related parties and US$48.1 million in cost and expenses forservices received from other related parties. The advertising and marketing revenues fromother related parties decreased from US$117.0 million in 2019 to US$46.5 million in 2020,primarily due to the decline of revenues from several related parties which experiencedunfavorable operating performance and reduced promotion activities on our platform. As ofDecember 31, 2020, we had outstanding balances related to other related parties of US$42.5million in accounts receivable, US$30.8 million in accounts payable, and US$4.8 million inaccrued and other liabilities. Moreover, we recorded loans to and interest receivables fromother related parties of US$158.6 million at annual interest rates ranging from 4% to 10% asof December 31, 2020, with maturity within one year. These other related parties mainlyincluded an equity investee in e-commerce business, accounting US$79.8 million, and aninvestee providing online brokerage services, accounting US$41.2 million of the outstandingbalance at the year-end. We assessed the collectability of outstanding loans at least on annualbasis or whenever impairment indicators noted. During 2020, we recognized US$82.2 millionimpairment charges on loans to and interest receivable from other related parties due to theirunsatisfied financial performance and decline in forecasted revenues.


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During 2019, other than revenue generated from SINA and Alibaba, we recorded US$122.4million in revenues from other related parties and US$31.2 million in cost and expenses forservices received from other related parties. As of December 31, 2019, we had US$99.7 millionin accounts receivable due from other related parties, US$10.7 million in accounts payable dueto other related parties, and US$34.4 million in accrued and other liabilities due to other relatedparties. Moreover, we recorded loans to and interest receivables from other related parties ofUS$301.5 million at annual interest rates ranging from 4% to 10.5% as of December 31, 2019,with maturity within one year. These other related parties mainly included an equity investeein e-commerce business, accounting US$160.0 million, an equity investee providing social andnew media marketing services, accounting US$60.6 million (interest free), and an investeeproviding online brokerage services, accounting US$41.0 million as of December 31, 2019.

During 2018, we recorded US$154.3 million in revenues from other related parties andUS$19.0 million in cost and expenses for services received from other related parties. As ofDecember 31, 2018, we had US$130.8 million in accounts receivable due from other relatedparties, US$31.2 million in accounts payable due to other related parties, and US$14.4 millionin accrued and other liabilities due to other related parties.

The following table sets forth the details of the revenues from other related parties for theperiods specified.


June 30,

2018 2019 2020 2020 2021


Advertising and marketing revenues�� 130,200 117,028 46,493 17,985 22,682Value-added services revenues �� 24,055 5,372 3,408 935 943

Total revenues from Other RelatedParties �� 154,255 122,400 49,901 18,920 23,625

The related parties with outstanding loan balances with us during the Track Record Period areour or SINA’s investees. These investees are primarily start-up or growth stage companieswhich operate businesses that are synergistic and complementary to Weibo’s ecosystem, andare expected to further diversify our monetization channels. We may continue to assist thesecompanies after assessing the prospects of success of their businesses going forward.

We also provided loans to a few third parties, who are our business partners with good financialpositions, to help meet their short-term financial needs. We may continue to assist third partiesbased on specific circumstances after prudently assessing the credit risks and recoverability.

All of our loans to related parties and third parties made in the Track Record Period werenon-trade in nature. The non-trade balances as of June 30, 2021 have maturities within oneyear. As of September 30, 2021, US$59.2 million of the non-trade balances with related partieswere settled and the remaining outstanding non-trade balances with related parties is expectedto be settled pursuant to the relevant respective contract term.


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As advised by our PRC Legal Adviser, they are of the view that, the General LendingProvisions primarily apply to lending activity undertaken by financial institutions providingcommercial loan services, and not the intercompany loans of the nature disclosed in thissection. As advised by our PRC Legal Adviser, our loans made to related parties and thirdparties are private loans that must comply with the Circular on Regulating Private LendingActivities and Maintaining the Economic and Financial Order (關於規範民間借貸行為維護經濟金融秩序有關事項的通知), pursuant to which, any private loan activity must rely on fundsderived from legal income, among other requirements. In addition, the interest rates of privateloans cannot exceed four times the one-year loan prime rate published by the NationalInterbank Funding Center from time to time, according to the Provisions of the SupremePeople’s Court on Several Issues concerning the Application of Law in Trial of Private LendingCases (最高人民法院關於審理民間借貸案件適用法律若干問題的規定). Our loans made torelated parties and third parties during the Track Record Period have complied with theserequirements. Our PRC Legal Adviser is therefore of the view that our loans to the relatedparties and third parties made by our PRC subsidiaries during the Track Record Period arecompliant with PRC laws and regulations in all material aspects as of the date of this document.


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REGULATIONS ON MICROBLOGS

The Rules on the Administration of Microblog Development (《北京市微博客發展管理若干規定》), issued by the Beijing Municipal Government in 2011, stipulate that users who postpublicly on microblogs are required to disclose their real identity to the microblogging serviceprovider, though they may still use pen names on their accounts. Microblogging serviceproviders are required to verify the identities of their users. In addition, microblogging serviceproviders based in Beijing were required to verify the identities of all of their users, includingexisting users who post publicly on their websites.

The Cyber Security Law (《中華人民共和國網絡安全法》), issued by the Standing Committeeof the National People’s Congress on November 7, 2016, which came into effect on June 1,2017, requires network operators that provide network access or domain name registrationservices, landline or mobile phone network access, or that provide users with informationpublication or instant messaging services, to require users to provide a real identity when theysign up.

The Cyberspace Administration of China, or the CAC, released the Provisions on theAdministration of Microblog Information Services (《微博客信息服務管理規定》), or theMicroblogs Provisions, on February 2, 2018, which came into effect on March 20, 2018. TheProvisions for Microblogs provide the principal responsibilities of the microblog serviceproviders, including, among other matters, authentication of true identity information; tieredand categorized management; rumor-dispelling mechanisms; industry self-discipline; socialsupervision; and administrative management. The Microblogs Provisions further requiremicroblog service providers to establish complete and comprehensive systems for registeringusers; verifying published information; managing posts, comments, and emergency responses;and providing education and training for practitioners; as well as implement a “chief editorsystem.” Additionally, the Microblogs Provisions require microblog service providers to set upsound rumor-dispelling mechanisms, whereby it shall take the initiative to refute rumors whenit finds that any microblog service user publishes or spreads any rumor or untruthfulinformation. Furthermore, if new technology is adopted or if any update is made to add anapplication or function which enable discussion of news or social mobilization capabilities, itshall be reported to the local CAC office of the relevant province, autonomous region ormunicipality directly under the State Council for security assessment.

In order to comply with the abovementioned rules, we have added additional clauses into theagreements between the users of our microblog service and us requesting our microblog usersto register using their real names.

On November 15, 2018, the CAC and the Ministry of Public Security jointly promulgated theRegulations for the Security Assessment of Internet Information Services Having PublicOpinion Properties or Social Mobilization Capacity (《具有輿論屬性或社會動員能力的互聯網信息服務安全評估規定》), which deems microblogging, live streaming, information sharingservices as internet information having public opinion properties or social mobilizationcapacity. The service providers providing such services are required to conduct securityassessments when they launch new online services, expand the functionality of their existingservices, introduce new technologies or applications, experience a significant increase in userbase, witness the spread of unlawful or harmful information, or any other circumstanceidentified by the cybersecurity authorities. These service provides are required to submitsecurity assessment reports to the local cybersecurity authorities and public security bureau viathe National Internet Security Management Service Platform.

REGULATORY OVERVIEW

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REGULATIONS ON ADVERTISEMENTS

The PRC government regulates advertising, including online advertising, principally throughState Administration for Market Regulation, or the SAMR, formerly the State Administrationfor Industry and Commerce. Since 2005, the State Administration for Industry and Commercehas exempted most enterprises (other than radio stations, television stations, newspapers andmagazines, non-corporate entities and entities specified in other regulations) that engage inadvertising business from the requirement of holding an operating license for advertising inaddition to a relevant business license. We conduct our online advertising business throughWeimeng, which holds a business license that covers online advertising in its scope of business.

Advertisers, advertising operators and advertising distributors are required by PRC advertisinglaws and regulations to ensure that the content of the advertisements they produce or distributeare true and in full compliance with applicable laws and regulations. In addition, where aspecial government review is required for certain categories of advertisements beforepublishing, advertisers, advertising operators and advertising distributors are obligated toconfirm that such review has been duly performed and that the relevant approval has beenobtained. Violations of these regulations may result in penalties, including fines, confiscationof advertising income, orders to cease dissemination of the advertisements and orders topublish an advertisement correcting the misleading information. For serious violations, theSAMR or its local branches may order the violator to terminate its advertising operations oreven revoke its business license. Furthermore, advertisers, advertising operators or advertisingdistributors may be subject to civil liabilities if they infringe on the legal rights and interestsof third parties.

On April 24, 2015, the Standing Committee of the National People’s Congress issued the PRCAdvertising Law or the Advertising Law (《中華人民共和國廣告法》), effective on September1, 2015 and amended on October 26, 2018 and April 29, 2021. The Advertising Law appliesto all advertising activities conducted via the internet. The Advertising Law requires that usersmust be able to close online pop-up ads with one click. Moreover, internet service providersare obligated to cease publishing any advertisements that they know or should know are illegal.Violation of these regulations may result in penalties, including fines, confiscation of theadvertising incomes, termination of advertising operations and even suspension of theprovider’s business license.

On July 4, 2016, the State Administration for Industry and Commerce issued the InterimMeasures for the Administration of Internet Advertising (《互聯網廣告管理暫行辦法》), orthe Interim Measures, which became effective on September 1, 2016. The Interim Measuresclarify that “Internet Advertisements” means commercial advertisements that promotecommodities or services directly or indirectly via Internet media such as websites, webpagesand Internet application programs in the form of texts, pictures, audio, video or other forms.The Interim Measures also impose a number of new requirements on Internet advertisers. Forexample, the Interim Measures state that paid search advertisements should be clearlydistinguished from ordinary search results. In addition, consistent with the Advertising Law,the Interim Measures require that advertisements published on Internet pages in the form ofpop-ups or other similar forms shall be clearly marked with a “Close” button to ensure “oneclick to close.” The measures also prohibit unfair competition in internet advertisementpublishing, including (i) providing or using any programs or hardware to intercept or filter anylegally operated advertisements of other persons; and (ii) using network pathways, networkequipment or applications to disrupt the normal data transmission of advertisements, alter orblock legally operated advertisements of other persons or load advertisements withoutauthorization. Violation of these regulations may result in fine of up to RMB30,000, with anypunishments administrated by the Administrative Authority for Industry and Commerce in theplace where the advertisement publisher is located.

REGULATORY OVERVIEW

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To comply with these laws and regulations, we include clauses in all of our advertisingcontracts requiring that all advertising content provided by advertisers or advertising agenciesmust comply with the relevant laws and regulations.

REGULATIONS ON VALUE-ADDED TELECOMMUNICATIONS SERVICES

The Telecommunications Regulations (《中華人民共和國電信條例》), promulgated by theState Council in 2000, and were subsequently revised in 2014 and 2016 respectively, draw adistinction between “basic telecommunication services” and “value-added telecommunicationservices.” Internet content provision services is a subcategory of value-addedtelecommunications services. According to the Catalogue of Telecommunications Business,most recently updated in June 6, 2019, the “value-added telecommunication services” wasfurther classified into two sub-categories and 10 items. Internet content provision services, orICP services, is under the second subcategory of value-added telecommunications businesses.Under the Telecommunications Regulations, commercial operators of value-addedtelecommunications services must first obtain an operating license from the MIIT or itsprovincial level counterparts.

The State Council issued the Administrative Measures on Internet Information Servicesconcurrently with the Telecommunications Regulations (《互聯網信息服務管理辦法》) in2000 to regulate internet content provision services, which was subsequently amended onJanuary 8, 2011. According to these measures, commercial internet content provision serviceoperators must obtain an Internet Content Provision License from the relevant governmentauthorities before engaging in any commercial internet content provision operations within thePRC. These measures further stipulate that entities providing internet content provisionservices regarding news, publishing, education, medicine, health, pharmaceuticals and medicalequipment must procure the approval of the national government authorities responsible forsuch areas prior to applying for an operating license from the relevant government authorities.

The Administrative Measures on Telecommunications Business Operating Licenses, (《電信業務經營許可管理辦法》) promulgated by the MIIT in 2001 and revised in 2009 and 2017, setforth the types of licenses required to operate value-added telecommunications services and thequalifications and procedures for obtaining such licenses. For example, an information serviceoperator providing value-added telecommunication services in multiple provinces is requiredto obtain an inter-regional license, whereas an information services operator providing thesame services in one province is required to obtain a local license.

To comply with these PRC laws and regulations, Weimeng holds an Internet Content ProvisionLicense issued by the Beijing Telecommunications Administration. In addition, Weimeng alsoholds an inter-regional Value-Added Telecommunications Services Operating License forprovision of value-added telecommunication services nationwide.

RESTRICTIONS ON FOREIGN OWNERSHIP IN VALUE-ADDEDTELECOMMUNICATIONS SERVICES

According to the Provisions on Administration of Foreign Invested TelecommunicationsEnterprises (《外商投資電信企業管理規定》), promulgated by the State Council in 2001 andamended in 2008 and 2016, respectively, the ultimate foreign equity ownership in avalue-added telecommunications service provider must not exceed 50%. Moreover, for aforeign investor to acquire any equity interest in a value-added telecommunications businessin China, it must demonstrate a good track record and experience in operating value-addedtelecommunications services. Foreign investors that meet these requirements must obtainapprovals from the MIIT and the Ministry of Commerce or their authorized local branches. Dueto the limitation of foreign investment in value-added telecommunications services companies

REGULATORY OVERVIEW

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that provide internet information services, we would be prohibited from acquiring any equityinterest in Weimeng. In addition, we believe that our contractual arrangements with Weimengand its individual shareholders provide us with sufficient and effective control over Weimeng.Accordingly, we currently do not plan to acquire any equity interest in Weimeng.

The Notice of the MIIT on Intensifying the Administration of Foreign Investment inValue-added Telecommunications Services (《關於加強外商投資經營增值電信業務管理的通知》), issued in 2006, prohibits domestic telecommunications services providers from leasing,transferring or selling telecommunications business operating licenses to any foreign investorin any form, or providing any resources, sites or facilities to any foreign investor for theirillegal operation of a telecommunications business in China. Either the holder of a value-addedtelecommunications business operating license or its shareholders must legally own the domainnames and trademarks used by such license holder in providing value-addedtelecommunications services. The notice further requires each license holder to have thenecessary facilities, including servers, for its approved business operations and to maintainsuch facilities in the regions covered by its license. In addition, all value-addedtelecommunications service providers are required to maintain network and internet security inaccordance with the standards set forth in the relevant PRC regulations. If a license holder failsto comply with the requirements in the notice and cure such non-compliance, the MIIT or itslocal counterparts have the discretion to take measures against such license holders, includingrevoking their value-added telecommunications business operating licenses.

The National People’s Congress approved the Foreign Investment Law (《中華人民共和國外商投資法》) on March 15, 2019 and the State Council approved the Regulation onImplementing the Foreign Investment Law (《中華人民共和國外商投資法實施條例》) (the“Implementation Regulations”) on December 26, 2019, effective from January 1, 2020. Theyreplaced the trio of existing laws regulating foreign investment in China, namely, theSino-foreign Equity Joint Venture Enterprise Law (《中外合資經營企業法》), the Sino-foreignCooperative Joint Venture Enterprise Law (《中外合作經營企業法》) and the Wholly Foreign-invested Enterprise Law (《外資企業法》), together with their implementation rules andancillary regulations. The Foreign Investment Law and Implementation Regulations embody anexpected PRC regulatory trend to rationalize its foreign investment regulatory regime in linewith prevailing international practice and the legislative efforts to unify the corporate legalrequirements for both foreign and domestic investments. The Foreign Investment Law and theImplementation Regulations reference a negative industry list for foreign investment’s accessinto various PRC domestic industries. This negative list has been updated from time to time bythe State Council and sets forth industry sectors prohibited to foreign investment. Accordingto the Special Administrative Measures for Access of Foreign Investment (Negative List)(2020) (《外商投資准入特別管理措施(負面清單)(2020年版)》) effective on July 23, 2020, orthe Negative List, the ultimate foreign equity ownership of a value-added telecommunicationsservice (other than e-commerce, domestic multi-party communications, storage-forwardingand call centers) provider in the PRC may not exceed 50%.

The Supreme People’s Court of China issued a judicial interpretation on the ForeignInvestment Law on December 27, 2019, effective from January 1, 2020, to ensure fair andefficient implementation of the Foreign Investment Law. According to the judicialinterpretation, courts in China shall not, among other things, support contracted parties toclaim foreign investment contracts in sectors not on the Negative List as void because thecontracts have not been approved or registered by administrative authorities. In addition, courtsin China shall support contracted parties who claim (i) foreign investment contracts for sectorsprohibited by the Negative List as void, or (ii) foreign investment contracts in sectors whereforeign investment is restricted as void because the contracts have violated the restrictions inthe Negative List.

REGULATORY OVERVIEW

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To comply with these PRC regulations, we operate our platform through Weimeng. Weimengis currently owned by four PRC employees of our company or SINA, Y. Liu, W. Wang, W.Zheng and Z. Cao, and a third-party minority stake holder, WangTouTongDa (Beijing)Technology Co., Ltd. Weimeng holds an Internet Content Provision License and a BulletinBoard Service Permit. Weimeng owns the domain names related to its operations and ourplatform (weibo.com, weibo.cn, and weibo.com.cn), while the trademarks relating to ouroperations are held by Weibo Technology, Weimeng and SINA’s subsidiaries. Due to the factthat trademarks owned by SINA’s subsidiaries contain SINA’s Chinese name or logo, suchtrademarks cannot be transferred to us. However, each of SINA’s subsidiaries has granted anexclusive license to Weimeng for its use of such trademarks. If the relevant PRC governmentauthorities determine in the future that the current ownership of our trademarks do not complywith the relevant regulations and the trademarks relating to our operations must be held byWeimeng, we may need to transfer these trademarks to Weimeng, which could severely disruptour business.

If, despite these precautions, the PRC government determines that we do not comply withapplicable laws and regulations, it can revoke our business and operating licenses, require usto discontinue or restrict our operations, restrict our right to collect revenues, block ourplatform, require us to restructure our operations, including possibly the establishment orrestructuring of a foreign-invested telecommunications enterprise, re-application for thenecessary licenses, or relocation of our businesses, staff and assets, impose additionalconditions or requirements with which we may not be able to comply, or take other regulatoryor enforcement actions against us.

REGULATIONS ON INTERNET CONTENT SERVICES

National security considerations are an important factor in the regulation of internet content inChina. The National People’s Congress has enacted laws with respect to maintaining thesecurity of internet operations and internet content. According to these laws, as well as theAdministrative Measures on Internet Information Services, violators may be subject topenalties, including criminal sanctions, for internet content that:

• opposes the fundamental principles stated in the PRC Constitution;

• compromises national security, divulges state secrets, subverts state power or damagesnational unity;

• harms the dignity or interests of the state;

• incites ethnic hatred or racial discrimination or damages inter-ethnic unity;

• undermines the PRC’s religious policy or propagates superstition;

• disseminates rumors, disturbs social order or disrupts social stability;

• disseminates obscenity or pornography, encourages gambling, violence, murder or fear orincites the commission of a crime;

• insults or slanders a third party or infringes upon the lawful rights and interests of a thirdparty; or

• is otherwise prohibited by law or administrative regulations.

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Internet content provision service operators are required to monitor their websites. They maynot post or disseminate any content that falls within these prohibited categories and mustremove any such content from their websites. The PRC government may shut down thewebsites of Internet Content Provision License holders that violate any of the above-mentionedcontent restrictions, order them to suspend their operations, or revoke their Internet ContentProvision Licenses.

On February 4, 2015, the CAC promulgated the Administrative Provisions on Account Namesof Internet Users (《互聯網用戶賬號名稱管理規定》), or the Account Names Provisions,which became effective as of March 1, 2015. The Account Name Provisions require internetservice providers to authenticate registered users’ identity information and to commit tocomplying with the “seven basic requirements,” including, among other things, observing thelaws and regulations, protecting state interests, as well as ensuring the authenticity of anyinformation they provide. Relevant internet information service providers are responsible forprotecting users’ privacy, the consistency between user information, such as account names,avatars, and the requirements set forth in the Account Names Provisions, making reports to thecompetent authorities regarding any violation of the Account Names Provisions, and takingappropriate measures to stop any such violations, such as, notifying the user to makecorrections within a specified time and suspending or closing accounts in the event ofcontinuing non-compliance.

On October 26, 2021, the CAC issued draft Administrative Provisions on the Account Namesof Internet Users (互聯網用戶賬號名稱信息管理規定(徵求意見稿)), revising the AccountNames Provisions. This draft provides that when registering an internet account, the user shallexecute an agreement with the Internet user account services platform, provide authenticidentity information, and obey the rules of the platform for content production and accountmanagement, the platform conventions and service agreement. Internet user account serviceplatforms shall establish, improve and strictly implement, among others, account nameinformation management system, information content security system, and personalinformation protection system. Internet user account service platforms should also establish anaccount name information dynamic check patrol system for the verification of real identityinformation, improve their technical measures for purposes of account information legalcompliance, and support account name authenticity checks. When an Internet user account isin violation of the provisions of this draft, the Internet user account service platform shallsuspend the service and inform the user to correct the issue within a limited time; and if theuser refuses to correct it, the account shall be terminated.

On August 25, 2017, the CAC promulgated the Administrative Provisions on InternetFollow-up Comment Services (《互聯網跟帖評論服務管理規定》), which became effective asof October 1, 2017. It provides that services related to following-up on or responding to onlinecomments must also strictly verify the identification information of registered users, establishand improve a user information protection system, establish and improve an Internet follow-upcomment review and administration system for real-time monitoring of user comments, andemergency responses, among other things.

On August 25, 2017, the CAC promulgated the Administrative Provisions on Internet Forumand Community Services (《互聯網論壇社區服務管理規定》, which became effective as ofOctober 1, 2017. It provides that Internet forum and community service providers must assumeprimary responsibility for establishing and improving real-time information verification,emergency response capabilities, and personal information protections as well as otherinformation security administration systems to institute preventative safety measures withemployed professionals and necessary technical support for performing these duties.

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On September 7, 2017, the CAC promulgated the Provisions on the Administration ofInformation Services Provided through Chat Groups on the Internet (《互聯網群組信息服務管理規定》), which became effective as of October 8, 2017. It requires that providers verify theidentification information of users of information services through Internet chat groups andtake necessary measures to protect user safety and personal information.

On September 7, 2017, the CAC promulgated the Administrative Provisions on the InformationServices Provided through Official Accounts of Internet Users (《互聯網用戶公眾賬號信息服務管理規定》), as amended on January 22, 2021 and became effective on February 22, 2021.Pursuant to the amended provisions, official accounts, or public accounts on certain socialmedia, refer to subscription accounts created and run by users of internet platforms to distributeinformation to the public. These platforms are required to establish and improve a managementsystem for user registration, information content security, content ecology, data security,personal information protection, intellectual property protection and credit assessment, and amonitoring and evaluation mechanism for public accounts, to prevent fraud such as falseaccount subscriptions and interaction counts. Platforms shall also establish and disclosemanagement rules and platform codes with respect to information content production andpublic account operation, both of which shall be filed with the local cyberspace administrator.The amended provisions also require platforms to verify the consistency of user information onthe platform with the user’s real identity and prohibit the operators of public accounts fromillegally transferring those accounts to others. Furthermore, platform shall establish andimprove mechanisms to deal with online rumors and other false information. When cooperatingwith an account operator, platforms shall regulate and manage business acts such ase-commerce sales, advertisement publishing, user reward, etc. In addition, platform operatorsare obligated to prevent false advertisements and commercial fraud from occurring on theirplatforms.

On December 15, 2019, the CAC promulgated the Regulations on the Ecological Governanceof Network Information Content (《網絡信息內容生態治理規定》), effective from March 1,2020, which specify the content scopes that are encouraged, prohibited or prevented fromproducing, re-producing and publishing. The network information content producers shouldtake measures to prevent and resist the production of content that, among others, usesexaggerated titles that are inconsistent with the content, may incite racism or discriminationagainst geographic region, and propagates gossip and scandals. The network informationcontent service platforms should fulfill the main responsibility of content management andestablish an ecological governance mechanism of the network information, improve system foruser registration, account management, information publishing review, emergency response,and etc. The network information content service users, network information content producersand network information content service platforms should not, through manual or technicalmeans, carry out acts, such as traffic falsification, traffic hijacking, false registration ofaccount IDs, illegal trading of account IDs, or manipulation of user account IDs, that destroynetwork ecology.

The Cyberspace Administration of China launched a “Fan Group Chaos Rectification” specialaction on June 15, 2021, followed by the issuance of the Notice on Further Strengthening theManagement of Chaos in Fan Groups (《關於進一步加強“飯圈”亂象治理的通知》) on August25, 2021. Both of the special action and notice are intended to rectify chaos in online fangroups for celebrities, specifically, in features such as celebrity rankings, hot topics, fancommunities, and fans interactive functions, so as to curb verbal abuse, stigmatization,instigation, confrontation, insults, slander, rumors, malicious marketing and the spread of otherharmful information. This notice requested, among other things, the cancellation of allrankings of celebrities. The rankings of music, film and television works are still allowed, but

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the network platforms should optimize and adjust ranking rules to focus on the art worksthemselves and professional evaluation. Furthermore, minors are not allowed to make virtualgifting or spending money on supporting idols, or act as the organizer or manager of a fangroup.

To comply with these PRC laws and regulations, we have took measures including removingthe function of star power list on our platform and adopted internal procedures to monitorcontent displayed on our platform, including a team of employees dedicated to screening andmonitoring content uploaded on our platform and removing inappropriate or infringing content.

To the extent that PRC regulatory authorities find any content displayed on or through ourplatform objectionable, they may require us to limit or eliminate the dissemination oravailability of such content on our platform or impose penalties, including the revocation ofour operating licenses or the suspension or shutdown of our online operations. In addition, thecosts of compliance with these regulations may increase as the volume of content and numberof users on our website increase.

REGULATIONS ON INFORMATION SECURITY

Internet content in China is also regulated and restricted from a state security point of view.The Decision Regarding the Safeguarding of Internet Security (《全國人民代表大會常務委員會關於維護互聯網安全的決定》), enacted by the Standing Committee of the National People’sCongress and amended in 2009, makes it unlawful to: (i) gain improper entry into a computeror system of strategic importance; (ii) disseminate politically disruptive information; (iii) leakstate secrets; (iv) spread false commercial information; or (v) infringe intellectual propertyrights.

The Administrative Measures for the Security Protection of International Connectionsto Computer Information Network (《計算機信息網絡國際聯網安全保護管理辦法》),promulgated by the Ministry of Public Security in 1997 and amended in 2011, prohibit the useof the internet in ways that, among other things, result in a leakage of state secrets or thedistribution of socially destabilizing content. Socially destabilizing content includes anycontent that incites defiance or violations of PRC laws or regulations or subversion of the PRCgovernment or its political system, spreads socially disruptive rumors or involves cultactivities, superstition, obscenities, pornography, gambling or violence. State secrets aredefined broadly to include information concerning PRC’s national defense affairs, state affairsand other matters as determined by the PRC authorities.

The Provisions on Technological Measures for Internet Security Protection (《互聯網安全保護技術措施規定》), promulgated by the Ministry of Public Security in 2005, require all internetcontent provision operators to keep records of certain information about their users (includinguser registration information, log-in and log-out times, IP addresses, content and time of postsby users) for at least 60 days. If an internet content provision operator violates these measures,the PRC government may revoke its Internet Content Provision License and shut down itswebsites.

In addition, the State Secrecy Bureau has issued provisions authorizing the blocking of accessto any website it deems to be leaking state secrets or failing to comply with the relevantlegislation regarding the protection of state secrets.

On July 1, 2015, the Standing Committee of the National People’s Congress issued the NationalSecurity Law (《中華人民共和國國家安全法》), which came into effect on the same day. TheNational Security Law provides that the state shall safeguard the sovereignty, security and

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cyber security development interests of the state, and that the state shall establish a nationalsecurity review and supervision system to review, among other things, foreign investment, keytechnologies, internet and information technology products and services, and other importantactivities that are likely to impact national security of China.

On November 7, 2016, the Standing Committee of the National People’s Congress issued theCyber Security Law (《中華人民共和國網絡安全法》), which came into effect on June 1,2017. The Cyber Security Law provides that network operators must set up internal securitymanagement systems that meet the requirements of a classified protection system for cybersecurity, including appointing dedicated cyber security personnel, taking technical measures toprevent computer viruses, network attacks and intrusions, taking technical measures to monitorand record network operation status and cyber security incidents, and taking data securitymeasures such as data classification, backups and encryption. The Cyber Security Law alsoimposes a relatively vague but broad obligation to provide technical support and assistance tothe public and state security authorities in connection with criminal investigations or forreasons of national security. The Cyber Security Law also requires network operators thatprovide network access or domain name registration services, landline or mobile phonenetwork access, or that provide users with information publication or instant messagingservices, to require users to provide a real identity when they sign up. The Cyber Security Lawsets forth elevated security requirements for operators of “critical information infrastructure.”These requirements include data localization, i.e., storing personal information and importantbusiness data in China, and national security review requirements for any network products orservices that may have an impact on national security. Among other factors, “criticalinformation infrastructure” is defined as critical information infrastructure, that will, in theevent of destruction, loss of function or data leak, result in serious damage to national security,the national economy and people’s livelihoods, or the public interest. Specific reference ismade to key sectors such as public communication and information services, energy,transportation, water-resources, finance, public services and e-government. The Cyber SecurityLaw also provides that the CAC and relevant departments, upon discovery of any publicationor transmission of information prohibited by laws or administrative regulations, shall requestthe network operators to stop the transmission, take disposal measures such as deletion, andkeep relevant records. The CAC and relevant departments shall notify the relevant departmentsto take technological and other measures to block the transmission of any information sourcedfrom outside the territory of China.

On March 15, 2019, the CAC and the SAMR jointly issued the Notice on App SecurityCertification and the Implementation Rules on Security Certification of Mobile InternetApplication (《移動互聯網應用程序(App)安全認證實施規則》), which encourages mobileapplication operators to voluntarily obtain app security certification, and search engines andapp stores are encouraged to recommend certified applications to users. The institutiondesignated for this certification is the China Cybersecurity Review Technology andCertification Center, or the CCRC. CCRC has the right to appoint testing agencies to inspecttechnical capabilities and business operations for the certification.

On April 13, 2020, twelve PRC governmental authorities including the CAC issued theMeasures for Cybersecurity Review (《網絡安全審查辦法》), with effect from June 1, 2020,which provide detailed cybersecurity review procedures for the purchase of network productsand services by operators of “critical information infrastructure.” According to the Measuresfor Cybersecurity Review, operators of “critical information infrastructure” are to operatorsidentified by the PRC governmental department in charge of the protection of criticalinformation infrastructure, and “network products and services” primarily are to core network

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equipment, high-performance computers and servers, mass storage equipment, large databasesand applications, network security equipment, cloud computing services, and other networkproducts and services that may have an important impact on the security of critical informationinfrastructure.

According to the Measures for Cybersecurity Review, before purchasing any network productsor services, an operator of “critical information infrastructure” shall assess potential nationalsecurity risks that may arise from the launch or use of such products or services, and apply fora cybersecurity review with the cybersecurity review office of CAC (the “CybersecurityReview Office”) if national security will or may be affected. To apply for a cybersecurityreview, the operator of “critical information infrastructure” shall submit (i) an applicationletter, (ii) a report to analyze the impact or the potential impact on national security, (iii)purchase documents, agreements and the draft contracts, and (iv) other necessary materials.The cybersecurity review will evaluate the potential impact on national security due to thepurchase of network products and services, taking into consideration of the following factors,among others, (i) the risk of any critical information infrastructure being illegally controlled,interfered, or sabotaged and any material data being stolen, leaked, or damaged, after usingthese products or services, (ii) the harm to the business continuity of any critical informationinfrastructure caused by the disruption of supply of these products and services, and (iii) thesecurity, openness, transparency and variety of sources of these products or services, thereliability of supply channels, as well as risks of supply interruptions due to factors such aspolitics, diplomacy and trade.

If the Cybersecurity Review Office deems it necessary to conduct a cybersecurity review, itshould complete a preliminary review within 30 business days from the issuance of a writtennotice to the operator, or 45 business days for complicated cases. Upon the completion of apreliminary review, the Cybersecurity Review Office should reach a review conclusionsuggestion and send the review conclusion suggestion to the implementing body for thecybersecurity review mechanism and the relevant authorities for their comments. Theseauthorities shall issue a written reply within 15 business days from the receipt of the reviewconclusion suggestion. If the Cybersecurity Review Office and these authorities reach aconsensus, then the Cybersecurity Review Office shall inform the operator in writing,otherwise, the case will go through a special review procedure. The special review procedureshould be completed within 45 business days, or longer for complicated cases.

On July 22, 2020, the Ministry of Public Security published the Guidelines on CybersecurityProtection System and Critical Information Infrastructure Security Protection System (《貫徹落實網絡安全等級保護製度和關鍵信息基礎設施安全保護製度的指導意見》), which requirecompetent authorities of public communication and information services, energy,transportation, water conservancy, finance, public services, electric governmental services,national defense science, technology and industry and other important industries and fields toformulate rules to identify critical information infrastructure in their respective industriesfields, and furnish a list of identified entities with the Ministry of Public Security. Specifically,key protected assets, such as basic networks, large private networks, core business systems,cloud platforms, big data platforms, Internet of Things, industrial control systems, intelligentmanufacturing systems, new internet and emerging communication facilities that meet therequirements for identification should be identified as critical information infrastructure.

On June 10, 2021, the Standing Committee of the National People’s Congress promulgated theData Security Law (《中華人民共和國數據安全法》), which took effect on September 1, 2021.The Data Security Law establishes a classified and tiered system for data protection based onthe level of importance of the data in the economic and social development, as well as the levelof danger of the data imposed on national security, public interests, or the legal interests of

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individuals and organizations upon any manipulation, destruction, leakage, illegal acquisitionor illegal usage. Furthermore, it is specified that the Cyber Security Law applies to the securityadministration of the cross-border transfer of important data collected and generated byoperators of “critical information infrastructure” during their operations in China.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of Chinaand the General Office of the State Council jointly issued the Opinions on Strictly CombatingIllegal Securities Activities (《關於依法從嚴打擊證券違法活動的意見》), which requestimprovement on the laws and regulations related to data security, cross-border data transfer andthe management of confidential information, strengthening principal responsibility for theinformation security of overseas listed companies, strengthening standardized mechanisms forproviding cross-border information, and improvement of cross-border audit regulatorycooperation in accordance with the law and the principle of reciprocity.

On July 10, 2021, the CAC published a discussion draft of the proposed amended Measures forCybersecurity Review (《網絡安全審查辦法(修訂草案征求意見稿)》) for public commentuntil July 25, 2021, which provides that (i) operators of “critical information infrastructure” ordata processors holding over one million users’ personal information shall apply with theCybersecurity Review Office for a cybersecurity review when listing abroad, (ii) operators of“critical information infrastructure” that intend to purchase internet products and services thatwill or may affect national security shall apply for a cybersecurity review, and (iii) dataprocessors carrying out data processing shall apply for a cybersecurity review. The CACsolicited comments on this draft, but there is no timetable as to when it will be enacted. ThePRC government authorities have wide discretion in the interpretation and enforcement ofthese laws, including identifying any entity to meet any of the above cybersecurity reviewcriteria.

On July 30, 2021, the State Council promulgated the Regulations on Security Protection ofCritical Information Infrastructure (《關鍵信息基礎設施安全保護條例》), effective onSeptember 1, 2021. According to the Regulations on Security Protection of Critical InformationInfrastructure, a “critical information infrastructure” has the meaning of an important networkfacility and information system in important industries such as, among others, publiccommunications and information services, as well as other important network facilities andinformation systems that may seriously endanger national security, the national economy, thepeople’s livelihood, or the public interests in the event of damage, loss of function, or dataleakage. The competent governmental departments and supervision and managementdepartments of the aforementioned important industries will be responsible for (i) organizingthe identification of critical information infrastructures in their respective industries inaccordance with certain identification rules, and (ii) promptly notifying the identified operatorsand the public security department of the State Council of the identification results.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of thePeople’s Republic of China (《中華人民共和國個人信息保護法》) (the “Personal InformationProtection Law”), effective from November 1, 2021. The Personal Information Protection Lawrequires, among others, that (i) the processing of personal information should have a clear andreasonable purpose which should be directly related to the processing purpose, in a method thathas the least impact on personal rights and interests, and (ii) the collection of personalinformation should be limited to the minimum scope necessary to achieve the processingpurpose to avoid the excessive collection of personal information. Different types of personalinformation and personal information processing will be subject to various rules on consent,transfer, and security. Entities handling personal information bear responsibilities for theirpersonal information handling activities, and shall adopt necessary measures to safeguard the

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security of the personal information they handle. Otherwise, the entities handling personalinformation could be ordered to correct, or suspend or terminate the provision of services, andface confiscation of illegal income, fines or other penalties.

On November 14, 2021, the CAC published a discussion draft of Management Measures forInternet Date Security (《網絡數據安全管理條例(徵求意見稿)》) or the Draft Measures forInternet Data Security, which provides that data processors conducting the following activitiesshall apply for cybersecurity review: (i) merger, reorganization or separation of Internetplatform operators that have acquired a large number of data resources related to nationalsecurity, economic development or public interests affects or may affect national security; (ii)listing abroad (國外上市) of data processors processing over one million users’ personalinformation; (iii) listing in Hong Kong which affects or may affect national security; (iv) otherdata processing activities that affect or may affect national security. The Draft Measures forInternet Data Security also provide that operators of large Internet platforms that set upheadquarters, operation centers or R&D centers overseas (境外) shall report to the nationalcyberspace administration and competent authorities.

In addition, the Draft Measures for Internet Data Security requires data processors processingover one million users’ personal information to comply with the regulations on important dataprocessors, including, among others, appointing a person in charge of data security andestablishing a data security management organization, filing with the competent authoritywithin fifteen working days after identifying its important data, formulating data securitytraining plans and organizing data security education and training for all staff every year, andthat the education and training time of data security related technical and managementpersonnel shall not be less than 20 hours per year.

The Draft Measures for Internet Data Security also state that data processors processingimportant data or going public overseas (境外) shall conduct an annual data securityassessment by themselves or entrust a data security service institution to do so, and submit thedata security assessment report of the previous year to the local branch of CAC before January31 of each year.

Further, the Draft Measures for Internet Data Security also require Internet platform operatorsto establish platform rules, privacy policies and algorithm strategies related to data, and solicitpublic comments on their official websites and personal information protection related sectionsfor no less than 30 working days when they formulate platform rules or privacy policies ormakes any amendments that may have a significant impacts on users’ rights and interests.Further, platform rules and privacy policies formulated by operators of large Internet platformswith more than 100 million daily active users, or amendments to such rules or policies byoperators of large Internet platforms with more than 100 million daily active users that mayhave significant impacts on users’ rights and interests shall be evaluated by a third-partyorganization designated by the CAC and reported to local branch of the CAC for approval.

The CAC solicited comments on this draft, but there is no timetable as to when it will beenacted.

Because Weimeng is an internet content provision operator, we are subject to laws andregulations relating to information security. To comply with these laws and regulations,Weimeng has completed the mandatory security filing procedures with local public securityauthorities. We regularly update our information security and content-filtering systems basedon any newly issued content restrictions, and maintain records of user information as requiredby relevant laws and regulations. We have also taken measures to delete or remove links tocontent that, to our knowledge, contains information that violates PRC laws and regulations.

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If, despite the precautions, we fail to identify and prevent illegal or inappropriate content frombeing displayed on or through our platform, we may be subject to liability. In addition, theselaws and regulations are subject to interpretation by the relevant authorities, and it may not bepossible to determine in all cases what content could result in liability. To the extent that PRCregulatory authorities find any content displayed on or through our platform objectionable,they may require us to limit or eliminate the dissemination or availability of such content orimpose penalties, including the revocation of our operating licenses or the suspension orshutdown of our online operations. In addition, the costs of compliance with these regulationsmay increase as the volume of content and users on our website increase.

REGULATIONS ON ALGORITHM RECOMMENDATIONS

On February 7, 2021, the Anti-Monopoly Commission of the State Council published theAnti-Monopoly Guidelines for the Internet Platform Economy Sector (《國務院反壟斷委員會關於平台經濟領域的反壟斷指南》), which stipulates that online platform operators who usetechnological advantages, such as data and algorithms, to eliminate or restrict competition orimpose price restrictions or exclusivity requirements on users, may be deemed as committingan abuse of dominant market position.

On September 17, 2021, the CAC, together with eight other governmental authorities, jointlyissued the Guidelines on Strengthening the Comprehensive Regulation of Algorithms forInternet Information Services (關於加強互聯網信息服務算法綜合治理的指導意見), whichprovides that daily monitoring of data use, application scenarios and effects of algorithms shallbe carried out by the relevant regulators, and that security assessments of algorithms shall beconducted by the relevant regulators. The guidelines also provide that an algorithm filingsystem shall be established and classified security management of algorithms shall bepromoted.

On August 27, 2021, the CAC issued a discussion draft of the Administrative Provisions onAlgorithm Recommendation of Internet Information Services (《互聯網信息服務算法推薦管理規定(徵求意見稿)》), which provides that algorithm recommendation service providers arenot allowed to use algorithms to register false user accounts, block information, give excessiverecommendations, and that users should be given the option to easily turn off algorithmrecommendation services. Although the CAC has solicited comments on this draft since August27, 2021, there is no timetable as to when it will be enacted. As such, substantial uncertaintiesexist with respect to its enactment timetable, final content, interpretation and implementation.

We have been advised by our PRC Legal Adviser that our current approaches are in compliancewith effective laws and regulations for algorithm recommendation in all material aspects as ofthe date of this document. However, since the draft Administrative Provisions on AlgorithmRecommendation of Internet Information Services has not yet been enacted, the potentialimpact on our business operations is still substantially uncertain.

REGULATIONS ON INTERNET PRIVACY

In recent years, PRC government authorities have enacted legislation on internet use to protectpersonal information from any unauthorized disclosure. PRC law does not prohibit internetcontent provision operators from collecting and analyzing personal information from theirusers. However, the Administrative Measures on Internet Information Services prohibit aninternet content provision operator from insulting or slandering a third party or infringing thelawful rights and interests of a third party.

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The Several Provisions on Regulating the Market Order of Internet Information Services (《規範互聯網信息服務市場秩序若干規定》), promulgated by the MIIT and effective in 2012,stipulate that internet content provision operators must not, without user consent, collect userpersonal information, which is defined as user information that can be used alone or incombination with other information to identify the user, and may not provide any suchinformation to third parties without prior user consent. Internet content provision operatorsmay only collect user personal information necessary to provide their services and mustexpressly inform the users of the method, content and purpose of the collection and processingof such user personal information. In addition, an internet content provision operator may onlyuse such user personal information for the stated purposes under the internet content provisionoperator’s scope of service. Internet content provision operators are also required to ensure theproper security of user personal information, and take immediate remedial measures if userpersonal information is suspected to have been disclosed. If the consequences of any suchdisclosure are expected to be serious, ICP operators must immediately report the incident to thetelecommunications regulatory authority and cooperate with the authorities in theirinvestigations.

On December 28, 2012, the Standing Committee of the National People’s Congress issued theDecision on Strengthening the Protection of Online Information (《全國人民代表大會常務委員會關於加強網絡信息保護的決定》). Most requirements under the decision that are relevantto internet content provision operators are consistent with the requirements already establishedunder the MIIT provisions mentioned above, though often more strict and broad. Under thedecision, if an internet content provision operator wishes to collect or use personal electronicinformation, it must do so in a legal and appropriate manner, and may do so only if it isnecessary for the services it provides. It must disclose the purpose, method and scope of anysuch collection or use, and must seek consent from the relevant individuals. Internet contentprovision operators are also required to publish their policies relating to information collectionand use, must keep such information strictly confidential, and must take technological andother measures to ensure the safety of such information. Internet content provision operatorsare further prohibited from divulging, distorting or destroying of any such personal electronicinformation, or selling or proving such information to other parties. The decision also requiresthat internet content provision operators providing information publishing services mustcollect from users their personal identification information, for registration. In very broadterms, the decision provides that violators may face warnings, fines, confiscation of illegalgains, license revocations, filing cancellations and website closures.

On July 16, 2013, the MIIT issued the Order for the Protection of Telecommunication andInternet User Personal Information (《電信和互聯網用戶個人信息保護規定》). Mostrequirements under the order that are relevant to internet content provision operators areconsistent with pre-existing requirements but the requirements under the order are often morestringent and have a wider scope. If an internet content provision operator wishes to collect oruse personal information, it may do so only if such collection is necessary for the services itprovides. Further, it must disclose to its users the purpose, method and scope of any suchcollection or use, and must obtain consent from its users whose information is being collectedor used. Internet content provision operators are also required to establish and publish theirrules relating to personal information collection or use, keep any collected information strictlyconfidential, and take technological and other measures to maintain the security of suchinformation. Internet content provision operators are required to cease any collection or use ofthe user personal information, and de-register the relevant user account, when a given userstops using the relevant internet service. Internet content provision operators are furtherprohibited from divulging, distorting or destroying any such personal information, or selling orproviding such information unlawfully to other parties. In addition, if an internet contentprovision operator appoints an agent to undertake any marketing and technical services thatinvolve the collection or use of personal information, the internet content provision operator

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is still required to supervise and manage the protection of the information. As to penalties, invery broad terms, the order states that violators may face warnings, fines, and disclosure to thepublic and, in most severe cases, criminal liability.

On November 7, 2016, the Standing Committee of the National People’s Congress issued theCyber Security Law (《中華人民共和國網絡安全法》), which came into effect on June 1,2017. The Cyber Security Law imposes certain data protection obligations on networkoperators, including that network operators may not disclose, tamper with, or damage users’personal information that they have collected, and are obligated to delete unlawfully collectedinformation and to amend incorrect information. Moreover, internet operators may not provideusers’ personal information to others without consent. Exempted from these rules isinformation irreversibly processed to preclude identification of specific individuals. Also, theCyber Security Law imposes breach notification requirements that will apply to breachesinvolving personal information.

On January 23, 2019, the CAC, the MIIT, and the Ministry of Public Security or the MPS, andthe SAMR jointly issued the Notice on Special Governance of Illegal Collection and Use ofPersonal Information via Apps (《關於開展App違法違規收集使用個人信息專項治理的公告》), which restates the requirement of legal collection and use of personal information,encourages APP operators to conduct security certifications, and encourages search enginesand APP stores to clearly mark and recommend those certified APPs.

On August 22, 2019, the CAC issued the Regulation on Cyber Protection of Children’sPersonal Information (《兒童個人信息網絡保護規定》), effective on October 1, 2019.Network operators are required to establish special policies and user agreements to protectchildren’s personal information, and to appoint special personnel in charge of protectingchildren’s personal information. Network operators who collect, use, transfer or disclosepersonal information of children are required to, in a prominent and clear way, notify andobtain consent from children’s guardians.

On November 28, 2019, the CAC, MIIT, MPS and SAMR jointly issued the Measures toIdentify Illegal Collection and Usage of Personal Information by APPs (《App違法違規收集使用個人信息行為認定方法》), which lists six types of illegal collection and usage of personalinformation, including “not publishing rules on the collection and usage of personalinformation” and “not providing privacy rules.”

On May 28, 2020, the National People’s Congress adopted the Civil Code of the PRC (《中華人民共和國民法典》), effective on January 1, 2021. According to the Civil Code,individuals have the right of privacy. No organization or individual shall process anyindividual’s private information or infringe on an individual’s right of privacy, unlessotherwise prescribed by law or with such individual’s prior express consent. In addition,personal information is protected by the PRC laws. Any processing of personal informationshall be subject to the principles of legitimacy, legality and necessity. An information processormust not divulge or falsify the personal information collected and stored by it, or provide thepersonal information of an individual to others without the consent of such individual.

To comply with these laws and regulations, we require our users to accept terms of servicesunder which they agree to provide certain personal information to us, to have establishedinformation security systems protect user privacy and to have such information filed with theMIIT or its local branch as required. If Weimeng, which is an internet content provisionoperator, violates PRC laws in this regard, the MIIT or its local bureau may impose penaltiesand Weimeng may be liable for damages caused to their users.

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On May 25, 2018, EU Directive 95/46/EEC was replaced by the GDPR on the protection ofnatural persons with regard to the processing of personal data and on the free movement ofsuch data. The GDPR applies directly in all European Union member states from May 25, 2018and applies to companies with an establishment in the European Economic Area, or the EEA,and to certain other companies not in the EEA that offer or provide goods or services toindividuals located in the EEA or monitor individuals located in the EEA. The GDPRimplements more stringent operational requirements for controllers of personal data, including,for example, expanded disclosures about how personal information is to be used, limitations onretention of information and pseudonymized data, increased cyber security requirements,mandatory data breach notification requirements and higher standards for controllers todemonstrate that they have obtained a valid legal basis for certain data processing activities.

The activities of data processors will be regulated for the first time, and companies undertakingprocessing activities are required to offer certain guarantees in relation to the security of suchprocessing and the handling of personal data. Contracts with data processors will also need tobe updated to include certain terms prescribed by the GDPR, and negotiating such updates maynot be fully successful in all cases. Failure to comply with EU laws, including failure under theGDPR and other laws relating to the security of personal data may result in fines up toC20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financialyear, if greater, and other administrative penalties including criminal liability.

REGULATION ON ANTI-MONOPOLY AND ANTI-UNFAIR COMPETION

On September 2, 1993, the Standing Committee of the National People’s Congress, or theSCNPC, adopted the Anti-unfair Competition Law of the PRC (《中華人民共和國反不正當競爭法》), which took effect on December 1, 1993, and was amended on April 23, 2019.According to the Anti-unfair Competition Law, unfair competition refers to that the operatordisrupts the market competition order and damages the legitimate rights and interests of otheroperators or consumers in violation of the provisions of the Anti-unfair Competition Law in theproduction and operating activities. Operators shall abide by the principle of voluntariness,equality, impartiality, integrity and adhere to laws and business ethics during markettransactions. Operators in violation of the Anti-unfair Competition Law shall bearcorresponding civil, administrative or criminal liabilities depending on the specificcircumstances.

The PRC Anti-monopoly Law of the PRC (《中華人民共和國反壟斷法》) promulgated by theSCNPC, which became effective on August 1, 2008, and the Rules of the State Council onFiling Threshold for Concentration of Undertakings (《國務院關於經營者集中申報標準的規定》) promulgated by the State Council on August 3, 2008, and amended on September 18,2018, require that where a concentration reaches one of the following thresholds, a filing mustbe completed in advance with the anti-monopoly law enforcement agency under the StateCouncil, or otherwise the concentration shall not be implemented: (i) during the previous fiscalyear, the total global turnover of all undertakings participating in the concentration exceededRMB10 billion, and at least two of these undertakings each had a turnover of more thanRMB400 million within China; or(ii) during the previous fiscal year, the total turnover withinChina of all the undertakings participating in the concentration exceeded RMB2 billion, and atleast two of these undertakings each had a turnover of more than RMB400 million withinChina. If a business operator carries out a concentration in violation of the law, the relevantauthority shall order the business operator to terminate the concentration, dispose of the sharesor assets or transfer the business within a specified time limit, or take other measures to restorethe pre-concentration status, and impose a fine of up to RMB500,000.

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On October 23, 2021, the Standing Committee of the National People’s Congress issued adiscussion draft of the amended Anti-Monopoly Law, which proposes to increase the fines forillegal concentration of business operators to no more than ten percent of its last year’s salesrevenue if the concentration of business operator has or may have an effect of excluding orlimiting competitions; or a fine of up to RMB5 million if the concentration of business operatordoes not have an effect of excluding or limiting competition. The draft also proposes that therelevant authority shall investigate a transaction where there is any evidence that theconcentration has or may have the effect of eliminating or restricting competitions, even if suchconcentration does not reach the filing threshold.


On September 11, 2020, the Anti-Monopoly Commission of the State Council issuedAnti-Monopoly Compliance Guideline for Operators (《經營者反壟斷合規指南》), whichrequires operators to establish anti-monopoly compliance management systems under the PRCAnti-Monopoly Law to manage anti-monopoly compliance risks.

On February 7, 2021, the Anti-Monopoly Commission of the State Council publishedAnti-Monopoly Guidelines for the Internet Platform Economy Sector (《國務院反壟斷委員會關於平臺經濟領域的反壟斷指南》) that specified circumstances where an activity of aninternet platform will be identified as monopolistic act as well as concentration filingprocedures for business operators, including those involving variable interest entities.

In August 2021, the SAMR issued two investigation notices to Weimeng Chuangke regardingalleged illegal concentration of business operators under the Anti-Monopoly Law, amongwhich, one resulted in a fine of RMB500,000 for concentration of business operators withoutprior filing pursuant to the Anti-Monopoly Law and the other one is still under investigationas of the date of this document. Weimeng Chuangke is actively cooperating with the SAMR onsuch investigation. We are not able to predict the status or the results of the investigation at thisstage. See “Risk Factors – Any failure or perceived failure by us to comply with theAnti-Monopoly Guidelines for Internet Platforms Economy Sector and other PRC anti-monopoly laws and regulations may result in governmental investigations or enforcementactions, litigation or claims against us and could have an adverse effect on our business,financial condition and results of operations.”

REGULATIONS ON INTERNET FINANCE

In July 2015, ten PRC regulatory agencies, including the People’s Bank of China, or the PBOC,the MIIT and the China Banking Regulatory Commission, which was re-organized into theCBIRC in March 2018, jointly issued the Guidelines on Promoting the Healthy Developmentof Internet Finance (《關於促進互聯網金融健康發展的指導意見》), or the Guidelines. TheGuidelines call for active government support for China’s internet finance industry, includingthe online peer-to-peer lending service industry, and clarify the division of responsibilityamong regulatory agencies. The Guidelines specify that the CBIRC will have primaryregulatory responsibility for the online peer-to-peer lending service industry in China and statethat online peer-to-peer lending service providers shall act as an intermediary platform to

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provide information exchange, matching, credit assessment and other intermediary services,and must not provide credit enhancement services and/or engage in illegal fund-raising. TheGuidelines provide additional requirements for China’s internet finance industry, including theuse of custodial accounts with qualified banks to hold customer funds as well as informationdisclosure requirements.

In August 2016, four PRC regulatory agencies, including the CBIRC, the MIIT, the MPS andCyberspace Administration of China, published the Interim Measures for the Administration ofBusiness Activities of Online Lending Information Intermediaries (《網絡借貸信息中介機構業務活動管理暫行辦法》), or the Interim Measures. The Interim Measures define onlinelending intermediaries as the financial information intermediaries that are engaged in onlinepeer-to-peer lending information business and provide lenders and borrowers with lendinginformation services, such as information collection and publication, credit rating, informationinteraction and loan facilitation. Consistent with the Guidelines, the Interim Measures prohibitonline lending intermediaries from providing credit enhancement services and collecting fundsdirectly or indirectly, and require, among others, (i) that online lending intermediariesintending to provide online lending information agency services, and their subsidiaries andbranches, must make relevant record-filing with local financial regulatory authorities withwhich they are registered after obtaining the business license; (ii) that online lendingintermediaries operating telecommunication services must apply for relevanttelecommunication service licenses after the completion of the record-filing and registrationwith the local financial regulatory authority; and (iii) that online lending intermediaries mustmaterially specify the online lending information intermediary in their business scopes.

In October 2016, the CBIRC, the MIIT and the SAIC jointly published the Guidelines on theAdministration of Record-filings of Online Lending Information Intermediary Agencies (《關於印發網絡借貸信息中介機構備案登記管理指引的通知》), or the Record-filings Guidelines,to establish and improve the record-filing mechanisms for online lending intermediaries.According to the Record-filings Guidelines, a newly established online lending intermediaryshall make the record-filings with the local financial regulatory authority after obtaining thebusiness license; while with respect to any online lending intermediary which is establishedand begins to conduct the business prior to the publication of this Record-filings Guidelines,the local financial regulatory authority shall, pursuant to relevant arrangement of specificrectification work for risks in online peer-to-peer lending, accept the application forrecord-filings submitted by a qualified online lending intermediary, or any online lendingintermediary which has completed the rectification confirmed by relevant authorities.

In August 2017, the General Office of the CBIRC released the Guidelines on InformationDisclosure of Business Activities of Online Lending Information Intermediaries (《關於印發網絡借貸信息中介機構業務活動信息披露指引的通知》), or the Information DisclosureGuidelines. Consistent with the Interim Measures, the Information Disclosure Guidelinesemphasize the information disclosure requirement by an online lending intermediary andfurther, stipulate the details of the frequency and scope of such information disclosure. Anyviolation of the Information Disclosure Guidelines by an online lending intermediary maysubject it to certain penalties under the Interim Measures. In addition, the InformationDisclosure Guidelines require online lending intermediaries that do not fully comply with theInformation Disclosure Guidelines in conducting their business to rectify the relevant activitieswithin six months after the release of the Information Disclosure Guidelines.

On March 28, 2018, the Office of the Leading Group for the Special Rectification of InternetFinancial Risks issued the Notice on Strengthening the Remediation of Asset ManagementBusiness through the Internet and Carrying out Acceptance Work (《關於加大通過互聯網開展資產管理業務整治力度及開展驗收工作的通知》). Under such notice, asset management

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companies that have obtained the qualification for sales of asset management products shallonly engage in public fund-raising from the sales of asset management products, and shall notparticipate in the “targeted entrustment plan”, “targeted financing plan”, “financialmanagement plan”, “asset management plan”, “transfer of income rights”, relying on theInternet to issue and sell asset management products for public fundraising without permission.

In March 2019, the Beijing Internet Finance Industry Association (the “Association”) issued aNotice on the Launch of the Citywide Inspection Action (《關於啟動全市範圍內摸排檢查行動的公告》) and the Risk Reminder Letter on the Enterprises Providing Diversion Services toNon-Licensed Lending Institutions (《關於相關企業為非持牌放貸機構提供導流服務的風險提示函》). This notice and letter summarized the findings of the Association’s investigation intothe online “Cash Loan” business. The Association had discovered that numerous internet andsocial media platforms, not licensed as lending institutions, are nevertheless engaging inunlicensed “Cash Loan” or “Excess-interest Loan” business via diversion practices undertakenin partnership with licensed lenders. The Association ordered relevant enterprises to terminateall such selling of “Cash Loan” products provided by partner institutions immediately, and saveall historical data in that connection to further support the Association’s work. In the event ofenforcement action taken in this regard by relevant authorities, we may be required to terminatecertain of our loan facilitation business services, which could have a material adverse effect onour business.

On September 7, 2020, the Notice of General Office of the China Banking and InsuranceRegulatory Commission on Strengthening the Supervision and Administration ofMicrolending Companies (《中國銀保監會辦公廳關於加強小額貸款公司監督管理的通知》)was promulgated. Under this regulation, lending entities should adhere to the principle of pettysum and decentralization. Following such principle, microlending companies shall reasonablydetermine the amount and term of loans based on the income level, overall liabilities, assetstatus, actual needs and other factors of borrowers, so as to ensure that the repayment amountof the borrowers does not exceed their repayment capacity. The balance of the loans providedby a microlending company to the same borrower shall not exceed 10% of the company’s netassets; and the balance of the loans provided by a microlending company to the same borrowerand its affiliated parties shall not exceed 15% of the company’s net assets. Local financialregulatory authorities may, in light of regulatory needs, lower the maximum balance of theaforesaid loans.

On December 29, 2020, the Reply by Supreme People’s Court to Issues Concerning the Scopeof Application of the New Judicial Interpretation on Private Lending (《最高人民法院關於新民間借貸司法解釋適用範圍問題的批覆》) was issued. Under this regulation, upon the matterof the scope of private lending, after soliciting the opinions of financial regulatory authorities,seven types of local financial organizations, including loan companies, financing guaranteecompanies, regional equity markets, pawnshops, financing lease companies, commercialfactoring companies and local asset management companies under the regulation of localfinancial regulatory authorities, are considered to be “financial institutions established uponapproval by financial regulatory authorities”. The new judicial interpretation on private lendingis not applicable to the institution mentioned above in respect of disputes arising from theirengagement in relevant financial businesses.

On December 7. 2020, the CBIRC issued the Measures for the Regulation of Internet InsuranceBusiness (《互聯網保險業務監管辦法》), which was effective on February 1, 2021. Undersuch measures, self-operating network platforms with insurance sales or insurance applicationfunctions and information management systems shall be under security protection of class IIIor above, with appropriate customer information protection systems.

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On February 20, 2021, the Notice of General Office of the China Banking and InsuranceRegulatory Commission on Further Regulating the Internet Lending Business of CommercialBanks (《關於進一步規範商業銀行互聯網貸款業務的通知》) was issued. Under thisregulation, if a commercial bank and a cooperative agency jointly contribute to the issuance ofInternet loans, (i) management requirements for the range of capital contribution proportionshall be strictly implemented, (ii) the capital contribution proportion of the cooperative partyin a single loan shall not be less than 30%, and (iii) the bank’s balance of loans granted witha single cooperative party (including its affiliated parties) shall not exceed 25% of the net tier1 capital of the bank. The balance of Internet loans jointly issued by a commercial bank anda cooperative agency shall not exceed 50% of the bank’s balance of total loans granted by thebank. Also, this regulation imposes strict control over cross-regional operations. A localcorporate bank that engages in Internet lending business shall provide services for local clientsand shall not carry out Internet lending business beyond the jurisdiction of its registrationplace. However, a corporate bank that has no physical business outlets, mainly carries out itsbusiness online, and meets other conditions prescribed by the CBIRC is excluded.

On March 12, 2021, the PBOC issued the Announcement of the People’s Bank of China [2021]No. 3 (“No. 3 Announcement”,《中國人民銀行公告[2021]第3號》). Under this No. 3Announcement, all loan products shall explicitly indicate their annualized loan interest rate bydisplaying to the borrower in a conspicuous manner when marketing it through any website,mobile application, poster or any other channel, as well as state such annualized interest ratein the loan contract executed, and all loan products may also have information such as the dailyinterest rate or the monthly interest rate displayed at the same time, provided that it is not ina manner more conspicuous than the annualized interest rate.

On January 13, 2021, the CBIRC and the PBOC issued the Circular of the General Office ofthe China Banking and Insurance Regulatory Commission and the General Office of thePeople’s Bank of China on Matters Relating to Regulating the Personal Deposit BusinessConducted by Commercial Banks through the Internet (《中國銀保監會辦公廳、中央銀行辦公廳關於規範商業銀行通過互聯網開展個人存款業務有關事項的通知》). Under such circular,commercial banks are prohibited to conduct time deposit or time-demand optional depositbusiness through any non-self-operating online platform, including but not limited to,providing such services as marketing publicity, product display, information transmission,purchase access, and interest subsidy through a non-self-operated online platform.

To comply with these laws and regulations on internet finance service, we have made relevantadjustments to the services available through Weibo wallet from time to time over the pastseveral years. See “Risk factor — We may face certain risks related to financial productsavailable on our Weibo wallet.”

REGULATIONS ON ONLINE GAME OPERATIONS AND CULTURAL PRODUCTS

Online Cultural Products

The Provisional Regulations for the Administration of Online Culture (《互聯網文化管理暫行規定》), issued by the Ministry of Culture in 2003 and further revised in 2004, 2011 and 2017,apply to entities engaging in activities related to “internet cultural products,” which includecultural products that are produced specifically for internet use, such as online music andentertainment, online games, online plays, online performances, online works of art and Webanimation, and other online cultural products that through technical means, produce orreproduce music, entertainment, games, plays and other art works for internet dissemination.According to these Regulations, commercial entities are required to apply to the relevant localbranch of the Ministry of Culture for an Online Culture Operating Permit if they engage in the

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production, duplication, importation, release or broadcasting of internet cultural products; thedissemination of online cultural products on the internet or the transmission of such productsvia internet or mobile phone networks to user terminals, such as computers, phones, televisionsets and gaming consoles, or internet surfing service sites such as internet cafes; or the holdingor exhibition of contests related to internet cultural products.

The Administrative Measures for Content Self-review by Internet Culture Business Entities(《網絡文化經營單位內容自審管理辦法》), which were issued by the Ministry of Culture onAugust 12, 2013, and took effect on December 1, 2013, require internet culture businessentities to review the content of products and services before providing them to the public. Thecontent management system of an internet culture business entity is required to specify theresponsibilities, standards and processes for content review as well as accountability measures,and is required be filed with the local provincial branch of the Ministry of Culture.

Weimeng currently holds an Online Culture Operating License issued by the Beijing MunicipalBureau of Culture and Tourism on October 20, 2020 and valid through December 30, 2023.

Internet Publication

The Rules for the Administration of Electronic Publications (《電子出版物出版管理規定》),which were issued by the General Administration of Press and Publication in 2008 and furtheramended in 2015, regulate the production, publishing and importation of electronicpublications in the PRC and outline a licensing system for business operations involvingelectronic publishing. Under these rules and other regulations issued by the GeneralAdministration of Press and Publication, online games are classified as a type of electronicproduction and publishing of online games is required to be done by licensed electronicpublishing entities with standard publication codes. If a PRC company is contractuallyauthorized to publish foreign electronic publications, it must obtain the approval of, andregister the copyright license contract with, the State Administration for Press, Publication,Radio, Film and Television, which was formed when the General Administration of Press andPublication was combined with the State Administration for Radio, Film and Television inMarch 2013.

The Administrative Provisions on Online Publishing Services (《網絡出版服務管理規定》), orthe Provisions, which were jointly issued by the MIIT and the State General Administration ofPress, Publication, Radio, Film and Television in 2016, and took effect on March 10, 2016. TheProvisions define “online publishing services” as providing online publications to the publicthrough information networks. Any online publishing services provided in the territory of thePRC is subject to the Provisions. The Provisions requires any internet publishing servicesprovider to obtain an online publishing service license to engage in online publishing services.Under the Provisions, online publications refer to digital works which have publishing featuressuch as having been edited, produced or processed and which are made available to the publicthrough information networks, including written works, pictures, maps, games, cartoons,audio/video reading materials and others. Any online game shall obtain approval from therelevant regulator before it is launched online. According to the Negative List, foreigninvestment is prohibited from entering into the publishing service industry.

Online Games

According to the Circular of the Ministry of Culture on Strengthening the Examination ofContent of Online Games Products (《文化部關於加強網絡遊戲產品內容審查工作的通知》)issued by the Ministry of Culture in 2004, the content of any foreign online game products

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should be examined and approved by the Ministry of Culture before they are operated withinChina. Entities engaged in developing and operating domestic online games products shouldregister with the Ministry of Culture.

The Notice Regarding the Consistent Implementation of the “Stipulations on ‘ThreeProvisions’ of the State Council and the Relevant Interpretations of the State CommissionOffice for Public Sector Reform and the Further Strengthening of the Administration ofPre-examination and Approval of Internet Games and the Examination and Approval ofImported Internet Games,” (《關於貫徹落實國務院“‘三定’規定”和中央編辦有關解釋,進一步加強網絡遊戲前置審批和進口網絡遊戲審批管理的通知》) also known as Circular 13, wasjointly published by the General Administration of Press and Publication, the NationalCopyright Administration and the National Office of Combating Pornography and IllegalPublications in 2009. Circular 13 expressly states that foreign investors are not permitted toparticipate in the operation of online games via wholly owned, equity joint venture orcooperative joint venture investments in China, and from controlling and participating in suchbusinesses directly or indirectly through contractual or technical support arrangements. Inaddition, according to Circular 13, the approval of the General Administration of Press andPublication is required for publishing any imported online games. Although Circular 13 wasissued several years ago, it is not yet clear what impact, if any, it will have on the operationof online games in China.

According to the Interim Administrative Measures for Internet Games, issued by the Ministryof Culture on June 3, 2010 and last amended on December 15, 2017, any entity engaging inonline game operations must obtain an Online Culture Operating License. On July 10, 2019,this measure was abolished by the Ministry of Culture and Tourism. As a result, the Ministryof Culture and Tourism is no longer responsible for regulating the online game industry inChina and has ceased to grant or renew any Online Culture Operating License relating to gameoperations. The issued Online Culture Operating License relating to game operations, however,will remain valid until each of their original expiration dates.

On August 30, 2021, the NPPA issued the Notice on Further Strict Management to PreventMinors from Indulging in Online Games (《關於進一步嚴格管理切實防止未成年人沉迷網絡遊戲的通知》), which requires all online game operators to provide services to minors only onany Friday, Saturday, Sunday and statutory holidays from 8:00 p.m. to 9:00 p.m., i.e. for onehour, and not to provide online games in any form to users who have not registered or loggedin with their real names. In addition to the real-name registration system already in place, wehave adjusted the systems in the games operated by us to comply with the requirements underthis notice. The revenue contributed by online games accounted for an insignificant portion ofour total revenue during the Track Record Period.

Virtual Currency

The Notice on the Reinforcement of the Administration of Internet Cafes and Online Games(《關於進一步加強網吧及網絡遊戲管理工作的通知》), jointly issued by the Ministry ofCulture, the People’s Bank of China and other government authorities in 2007, directs thePeople’s Bank of China to strengthen the administration of virtual currency in online games toavoid any adverse impact on the real economic and financial systems. This notice provides thatthe total amount of virtual currency issued by online game operators and the amount purchasedby individual users should be strictly limited, with a strict and clear division between virtualtransactions and real e-commerce transactions. This notice also provides that virtual currencyshould only be used to purchase virtual items.

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The Notice on the Strengthening of Administration on Online Game Virtual Currency (《文化部關於改進和加強網絡遊戲內容管理工作的通知》), jointly issued by the Ministry of Cultureand the Ministry of Commerce in 2009, broadly defined virtual currency as a type of virtualexchange instrument issued by internet game operation enterprises, purchased directly orindirectly by the game user by exchanging legal currency at a certain exchange rate, savedoutside the game programs, stored in servers provided by the internet game operationenterprises in electronic record format and represented by specific numeric units. Virtualcurrency is used to exchange internet game services provided by the issuing enterprise for adesignated extent and time, and is represented by several forms, such as online prepaid gamecards, prepaid amounts or internet game points, and does not include game props obtained fromplaying online games. In 2009, the Ministry of Culture further promulgated the FilingGuidelines on Online Game Virtual Currency Issuing Enterprises and Online Game VirtualCurrency Trading Enterprises (《“網絡遊戲虛擬貨幣發行企業”、“網絡遊戲虛擬貨幣交易企業”申報指南》), which specifically defines “issuing enterprise” and “trading enterprise” andstipulates that a single enterprise may not operate both types of business.

Protection of Minors

In 2007, the General Administration of Press and Publication and several other governmentalauthorities issued a circular requiring the implementation of an “anti-fatigue system” and areal-name registration system by all PRC online game operators, in an effort to curb addictiveonline game play behaviors of minors. Under the anti-fatigue system, three hours or less ofcontinuous play by minors is considered to be “healthy,” three to five hours to be “fatiguing,”and five hours or more to be “unhealthy.” Game operators are required to reduce the value ofin-game benefits to a game player by half if the game player has reached “fatiguing” level, andto zero in the case of “unhealthy” level.

The Notice on Initializing the Verification of Real-name Registration for Anti-Fatigue Systemon Internet Games (《關於啟動網絡遊戲防沉迷實名驗證工作的通知》), issued by the GeneralAdministration of Press and Publication, the MIIT, the Ministry of Education and five othergovernmental authorities in 2011, imposes stringent penalties on online game operators that donot implement the required anti-fatigue and real-name registration measures properly andeffectively. Its main focus is to prevent minors from using an adult ID to play internet games.The operation of an online game may be terminated if the operator is found to be in violationof this notice.

The Implementation of Online Game Monitoring System of the Guardians of Minors (《“網絡遊戲未成年人家長監護工程”實施方案》), a circular jointly issued by the Ministry of Culture,the MIIT and six other central government authorities in 2011, aimed to provide specificprotective measures to monitor the online game activities of minors and curb addictive onlinegame play behavior by minors. Under this circular, online game operators are required to adoptvarious measures to maintain a system to communicate with the parents or other guardians ofminors playing online games and online game operators are required to monitor the onlinegame activities of minors, and must suspend the account of a minor if so requested by theminor’s parents or guardians. The monitoring system was formally implemented on March 1,2011.

The Work Plan for the Integrated Prevention of Minors’ Online Game Addiction (《未成年人網絡遊戲成癮綜合防治工程工作方案》), jointly issued by the General Administration of Pressand Publication, the Ministry of Education, the Ministry of Culture, the MIIT and 11 other PRCgovernment authorities on February 5, 2013, implemented integrated measures by differentauthorities to prevent minors from becoming addicted to online games. Under the work plan,

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the current relevant regulations regarding online games will be further clarified and additionalimplementation rules will be issued, and as a result, online game operators will be required toimplement additional measures to protect minors.

On October 25, 2019, the General Administration of Press and Publication issued the Noticeon Preventing Minor’s Addiction to Online Games (《關於防止未成年人沉迷網絡遊戲的通知》), which requires all online gamers to register accounts with their valid identityinformation and all game companies to stop providing game services to users who fail to doso. Furthermore, minors are prohibited from playing games exceeding a certain period of timeper day or putting money into their accounts exceeding a certain amount.

On October 17, 2020, the Standing Committee of the National People’s Congress revised andpromulgated the Law of the PRC on the Protection of Minors (2020 Revision) (《中華人民共和國未成年人保護法》), which took effect on June 1, 2021. Law of the PRC on the Protectionof Minors (2020 Revision) added a new section entitled “Online Protections” which stipulatesa series of provisions to further protect minors’ interests on the internet, among others, (i)online product and service providers are prohibited from providing minors with products andservices that would induce minors to indulge, (ii) online service providers for products andservices such as gaming, live streaming, audio-video, and social networking are required toestablish special management systems of user duration, access authority and consumption forminors, (iii) online gaming service providers must request minors to register and log intoonline games with their valid identity information, (iv) online gaming service providers mustcategorize games according to relevant rules and standards, notify users about the appropriateages for the players of the games, and take technical measures to keep minors from accessinginappropriate games or gaming functions, and (v) online gaming service providers may notprovide online game services to minors from 10:00 P.M. to 8:00 A.M. the next day.

Weimeng has been actively communicating with the relevant government authority for theapplication of an internet publishing permit. We have adopted our own anti-fatigue and realname registration systems.

REGULATIONS ON BROADCASTING AUDIO/VIDEO PROGRAMS THROUGH THEINTERNET

On December 20, 2007, the State Administration for Radio, Film and Television and the MIITjointly issued the Rules for the Administration of Internet Audio and Video Program Services(《互聯網視聽節目服務管理規定》), commonly known as Circular 56, which came into effectas of January 31, 2008 and was later amended in 2015. Circular 56 reiterates the requirementset forth in the earlier rules that online audio/video service providers must obtain an internetaudio/video program transmission license from the State Administration for Radio, Film andTelevision. Furthermore, Circular 56 requires all online audio/video service providers to beeither wholly state-owned or state-controlled companies. According to relevant officialanswers to press questions published on the website of State Administration for Radio, Filmand Television on February 3, 2008, officials from the State Administration for Radio, Film andTelevision and the MIIT clarified that online audio/video service providers that already hadbeen operating lawfully prior to the issuance of Circular 56 may re-register and continue tooperate without becoming state-owned or controlled, provided that such providers have notengaged in any unlawful activities. This exemption will not be granted to online audio/videoservice providers established after Circular 56 was issued. These policies have been reflectedin the Application Procedure for Audio/Video Program Transmission License. Failure to obtain

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the internet audio/video program transmission license may subject an online audio/videoservice provider to various penalties, including fines of up to RMB30,000, seizure of relatedequipment and servers used primarily for such activities and even suspension of its onlineaudio/video services.

On December 16, 2016, the State Administration of Press, Publication, Radio, Film andTelevision of the PRC (SAPPRFT) issued the Rules for the Administration of Video and AudioPrograms on Weibo, WeChat and other Social Media Platforms (《關於加強微博、微信等網絡社交平台傳播視聽節目的管理規定》), or Circular 196. Circular 196 requires that anyorganizations that provide online streaming through social media platforms such as Weibo orWeChat should obtain an internet audio/video program transmission license. For organizationsand individuals that do not hold license, the hosting social networking platform shall beresponsible for supervising the content of the posted programs, and the scope of the programsmust not exceed the scope stated on the platform’s audio/video program transmission license.Similarly, film and TV dramas broadcasted through social media are required to obtain alicense for public airing, and social media platforms are not allowed to repost user-generatedvideo or audio programs featuring political news.

On November 18, 2019, the CAC, the Ministry of Culture and Tourism and the NRTA, jointlyissued the Administrative Provisions on Online Audio-Visual Information Services (《網絡音視頻信息服務管理規定》), effective from January 1, 2020, which provides that onlineaudio-visual information service providers are the principals responsible for informationcontent security management, and should, among other things, establish and improve theirinternal policies in relation to user registration, scrutiny of information publication, andinformation safety management. Organizations and individuals are prohibited from usingonline audio-visual information services and related information technology to carry out illegalactivities and infringe legal rights and interests of others. The Provisions further set outrequirements for utilization of new applications driven by new technology (such as deeplearning and virtual reality) to produce, publish and disseminate audio-visual information, forexample, audio-visual information service providers are required to conduct safety evaluation,identify and label fraudulent audio-visual information, and to defeat rumors, false news andcontent violating user agreements.

REGULATIONS ON PRODUCING AUDIO/VIDEO PROGRAMS

On July 19, 2004, the SARFT promulgated the Administrative Measures on the Production andOperation of Radio and Television Programs (《廣播電視節目製作經營管理規定》), effectiveas of August 20, 2004 and amended in 2015, 2018 and 2020. These Measures provide thatanyone who wishes to produce or operate radio or television programs must first obtain anoperating permit. Applicants for this permit must meet several criteria, including having aminimum registered capital of RMB3.0 million. Weimeng holds a permit for radio andtelevision program production and operation, with a permitted scope encompassing productionof animated programs, features programs and television entertainment programs, valid throughOctober 29, 2022.

On January 9, 2019, China Network Audio-Visual Program Service Association issued theDetailed Rules for Reviewing Network Short Video Contents (《網絡短視頻內容審核標準細則》), setting out 100 types of contents that are restricted from short-video programs.

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REGULATIONS ON ONLINE LIVE STREAMING SERVICES

On November 4, 2016, the CAC promulgated the Regulations on the Administration of OnlineLive streaming Services (《互聯網直播服務管理規定》), or the Online Live streamingRegulations, which became effective on December 1, 2016.

The Online Live streaming Regulations provides that online live streaming service providersand distributors must legally obtain the qualification for internet news information servicesbefore providing such services on the internet, and engage in online news information servicesto the licensed extent. Online live streaming service providers must review all live internetnews information and interactions before publishing them, and set up their “chief editor”position if they provide live streaming services of internet news information. The Online Livestreaming Regulations also stipulate that online live streaming service providers must carry outtheir subject responsibility, arrange professionals commensurate with its service size, establishand improve various management systems, and have the technical capability to immediatelycut online live streaming, and its technical plans shall comply with relevant national standards.In addition, online live streaming service providers must conduct graded and categorizedmanagement according to the content category and user scale of online live streaming, andestablish a credit rating management system for online live streaming distributors as well as ablacklist management system.

On December 2, 2016, the Ministry of Culture issued the Administrative Measures for BusinessActivities of Online Performances (《網絡表演經營活動管理辦法》), which took effect onJanuary 1, 2017, and provide that the online performances must not involve six types ofcontent, such as “those infringing upon others’ legitimate rights and interests by taking candidphotographs or using a hidden recorder.” Entities engaging in online performances mustrequire and verify the registration of performers with their own valid IDs and real names.Moreover, the Measures stress that entities engaging in online performances must improvetheir own user registration systems, maintain the information provided by users forregistration, and take active actions to safeguard the safety of users’ information.

On August 1, 2018, the CAC and the other five PRC governmental authorities jointly issuedthe Circular on Tightening the Administration of Online Live streaming Services (《關於加強網絡直播服務管理工作的通知》), or the Online Live streaming Services Circular, whichspecifies respective duties of online live streaming service providers, network access serviceproviders and application stores, aiming to prompt relevant internet-based enterprises to fulfilltheir responsibilities. The Online Live streaming Services Circular provides that an online livestreaming service provider must make a record filing with the competent telecommunicationsauthority as an internet content provider (ICP). Online live streaming service providers are alsorequired to apply for a permit with the local authorities if it engages in telecommunicationsbusiness, livestreaming business for internet news information, online performance, and/oronline visual-audio programs. Online live streaming service providers must make record filingswith the local public security authorities within 30 days after live streaming services have beenpublished on the internet. In addition, online live streaming service providers are required toimplement real name verification system for users, intensify administration of online anchors,establish blacklist system for online anchors, optimize the system of watching and censoringlivestreamed content for regulatory purposes, and improve measures to better respond toharmful content.

On November 6, 2020, the SAMR issued the Guidelines on Strengthening Supervision ofOnline Live streaming Marketing Activities (《市場監管總局關於加強網絡直播營銷活動監管的指導意見》), pursuant to which an network platform will assume the responsibility andobligation as an e-commerce platform operator according to the E-Commerce Law; provided

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that this platform provides operators, who sell goods or provide services via internet livestreaming, with services such as internet operation place, transaction matchmaking andinformation publication in order for the transaction parties to independently complete theirtransaction activities.

On November 12, 2020, the NRTA issued the Notice on Strengthening the Management ofOnline Show Live streaming and E-commerce Live streaming (《國家廣播電視總局關於加強網絡秀場直播和電商直播管理的通知》), pursuant to which live streaming platforms for onlineshows are requested to strengthen positive value guidance and enable those tasteful,meaningful, interesting and warm live streaming programs to have good traffic, and to preventthe spread of the trends of wealth flaunting, money worshiping and vulgarity. Notice 78requests the live streaming platforms for online shows and e-commerce to register in theNational Internet Audio-Visual Platforms Information Management System, and we havecompleted such registration as requested, which was valid until May 1, 2021 and currentlyunder the annual renewal process. In addition, the number of content reviewers a platform isrequired to keep must in principle be no less than 1:50 of the number of live streaming rooms.Live streaming platforms for online shows need to manage the hosts and users making virtualgifting based on the real-name registration system, and users who have not registered with realnames or who are minors are prohibited from virtual gifting. The live streaming platforms arerequired to implement real-name registration system by real-name verification, facerecognition, manual review and other measures to prevent minors from virtual gifting. Theplatform shall limit the maximum amount of rewards each user may give per time, day andmonth. Live streaming platforms for e-commerce shall not illegally produce and broadcast,beyond their business scope of e-commerce, any commentary programs unrelated to sales ofgoods.

According to the Law of the PRC on the Protection of Minors (2020 Revision) (《中華人民共和國未成年人保護法》), which took effect on June 1, 2021, among others, live streamingservice providers are not allowed to provide minors under age 16 with online live streamingpublisher account registration service, and must obtain the consent from parents or guardiansand verify the identity of the minors before allowing minors aged 16 or above to register livestreaming publisher accounts.

On October 8, 2021, the National Development and Reform Commission issued a discussiondraft of the Negative List for Market Access (2021 Version) (市場准入負面清單(2021年版)(徵求意見稿)), which provides that, among others, non-state-capitalized entities shall not engagein live streaming of political, economic, military, diplomatic, major social, cultural, scientificand technological, health, education, sports and other activities and events related to politicaldirection, public opinion orientation and value orientation. The scope of live streamingbusiness under this list is relatively broad and vague, and is subject to further clarifications andinterpretations by the regulator.

REGULATIONS ON ONLINE MUSIC

On November 20, 2006, the Ministry of Culture issued Several Suggestions of the Ministry ofCulture on the Development and Administration of Internet Music (《網絡音樂發展和管理的若干意見》), which became effective immediately upon its issuance. These suggestions,among other things, reiterate the requirement for an internet service provider to obtain aninternet culture business permit to carry out any business relating to internet music products.In addition, foreign investors are prohibited from operating internet culture businesses.However, the laws and regulations on internet music products are still evolving, and there havenot been any provisions stipulating whether or how music videos will be regulated by thesesuggestions.

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On August 18, 2009, the Ministry of Culture promulgated the Notice on Strengthening andImproving the Content Review of Online Music (《文化部關於加強和改進網絡音樂內容審查工作的通知》). According to this notice, only “internet culture operating entities” approved bythe Ministry of Culture may engage in the production, release, dissemination (includingproviding direct links to music products) and importation of online music products. On October23, 2015, the Ministry of Culture promulgated the Circular on Further Strengthening andImproving the Administration of Content of Online Music (《關於進一步加強和改進網絡音樂內容管理工作的通知》), which became effective on January 1, 2016 According to the Circular,the content of online music shall be reviewed by or filed with the Ministry of Culture. Internetculture operating entities should establish a strict self-monitoring system of online musiccontent and set up a special department in charge of such monitoring. Weimeng has obtainedan Online Culture Operating Permit, the scope of which covers online music operations.

REGULATIONS ON INTERNET NEWS DISSEMINATION

On April 28, 2015, the CAC issued the Provisions on the Questioning Procedures for InternetNews Service Providers (《互聯網新聞信息服務單位約談工作規定》), or the Provisions. TheProvisions provide the CAC and its local branches with a formal procedure for bringing in keypersonnel from internet news service providers for questioning as well as giving oral warnings,identifying problems and ordering rectifications in certain circumstances specified in theProvisions such as the failure to deal with illegitimate information in a timely fashion and whencircumstances are severe. If the CAC or its local branches orders an internet news serviceprovider to rectify a problem through the questioning procedures and it fails to do so, then theinternet new service provider may be subject to administrative action including a writtenwarning, fine, temporary suspension of operations or the revocation of licenses. Internet newsservice providers are also subject to enhanced penalties for several violations under thequestioning procedures. Additionally, the CAC and its local branches may publicizeinformation related to the questioning procedures that it conducted against internet newsservice providers under the Provisions. The Provisions took effect on June 1, 2015.

On May 2, 2017, the CAC issued the Administrative Provisions for Internet News InformationServices (《互聯網新聞信息服務管理規定》), or the New Provisions, which became effectiveon June 1, 2017. The New Provisions replace the Provisions for the Administration of InternetNews Information Services promulgated by the SCIO and the MII in 2005, and are intendedto help solidify the CAC’s jurisdiction over internet news information services. The NewProvisions require that internet websites, apps, forums, blogs, microblogs, official accounts,instant messaging tools, network-based broadcasts and other similar means that provideinternet news information services obtain a permit for internet news information services. TheNew Provisions also broaden the scope of internet news information services to include (i)services of collecting, editing, and releasing internet news information; (ii) reposting suchnews information; and (iii) providing a platform to spread such news information. To apply forsuch a permit, the applicant must satisfy requirements set forth under the New Provisions, suchas that it be a legal entity established in China and that its principal or chief editor be a Chinesecitizen. In addition, all internet news providers are explicitly required to review and self-censorthe content published by them and to take measures to cease transmission and remove contentif inappropriate content is discovered, as well as maintain relevant records and report suchmatters to the competent regulators.

On October 8, 2021, the National Development and Reform Commission issued a discussiondraft of the Negative List for Market Access (2021 Version) (市場准入負面清單(2021年版)(徵求意見稿)), which provides that, among others, non-state-capitalized entities shall not conductthe business of news collecting, editing, releasing and reporting. Weibo does not collect, edit,

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release or report news by itself. Weibo holds an Internet News and Information ServiceLicense, which allows it to provide the service of reposting news information and operating aplatform to disseminate news information.

Weimeng provides a platform for our users to post news, current topics and social events andit has obtained an Internet News Publication License on July 30, 2019 for providing newsrepublishing and broadcasting platform services, which is valid through July 29, 2022.

INTERNET MAPPING SERVICES

Under the Surveying and Mapping Law (《中華人民共和國測繪法》) promulgated by theNational People’s Congress in 1992 and amended in 2002 and 2017, entities engaged insurveying and mapping services should obtain a surveying and mapping qualificationcertificate and comply with the state’s surveying and mapping criteria. According to theamended Administrative Rules of Surveying Qualification Certificate (《測繪資質管理規定》)and the amended Standard for Surveying Qualification Certificate (《測繪資質分類分級標準》) issued by the former National Administration of Surveying, Mapping and Geo-information, or NASMG in 2021, respectively, non-surveying and mapping enterprise issubject to the approval of the NASMG and requires a surveying and mapping qualificationcertificate to provide internet mapping services.

On November 26, 2015, the State Council enacted the Administrative Regulations on Maps(《地圖管理條例》), or the Maps Regulations, effective as of January 1, 2016. The MapsRegulations requires entities engaging in internet mapping services, such as geographicpositioning, the uploading of geographic information or markings, and the development of apublic map database, to obtain a relevant qualification certificate for surveying and mapping.The Maps Regulations require entities engaging in online map services to use mapping dataapproved by the relevant governmental authorities, host servers storing map data within thePRC, and establish a management system as well as protection measures for the data securityof the online maps. The mapping data must not contain any content prohibited by the MapsRegulations, and no entities or individuals are allowed to upload or mark such prohibitedcontent online. Further, entities engaging in internet mapping services shall keep confidentialany information involving state secrets and trade secrets acquired during their work.

Weimeng holds a surveying and mapping qualification certificate (Class B) issued by BeijingMunicipal Commission of Planning and Natural Resources, valid through October 11, 2026.

REGULATIONS ON INTERNET DRUG INFORMATION SERVICES

According to the Provisions on the Administration of Internet Drug Information Services (《互聯網藥品信息服務管理辦法》), promulgated by the State Food and Drug Administration andmost recently amended in November 2017, an enterprise publishing drug-related informationmust obtain a qualification certificate from the provincial-level food and drug administrationbefore it applies for the ICP license or files with the MIIT or its local provincial-levelcounterpart. An ICP service operator that provides information regarding drugs or medicaldevices must obtain an Internet Drug Information Service Qualification Certificate from theapplicable provincial level administrative authority. We have obtained the Internet DrugInformation Service Qualification Certificate for the drug-related information available on ourplatform, including information from those using our platform to promote their products andservices and drug-related information shared on our platform.

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REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS

China has adopted legislation governing intellectual property rights, including trademarks,patents and copyrights. China is a signatory to the major international conventions onintellectual property rights and became a member of the Agreement on Trade Related Aspectsof Intellectual Property Rights upon its accession to the World Trade Organization in December2001.

Patent. The Patent Law (《中華人民共和國專利法》) was adopted in 1984 and amended in1992, 2000, 2008 and 2020. The amended version in 2020 came into effect on June 1, 2021.The purpose of the Patent Law is to protect lawful interests of patent holders, encourageinvention, foster applications of invention, enhance innovative capabilities and promote thedevelopment of science and technology. To be patentable, invention or utility models mustmeet three conditions: novelty, inventiveness and practical applicability. Patents cannot begranted for scientific discoveries, rules and methods for intellectual activities, methods used todiagnose or treat diseases, animal and plant breeds, nuclear transformation method andsubstances obtained by the method of nuclear transformation or a design which has majormarking effect on the patterns or colors of graphic print products or a combination of bothpatterns and colors. The Patent Office under the State Intellectual Property Office isresponsible for receiving, examining and approving patent applications. A patent is valid for aterm of twenty years in the case of an invention and a term of ten years in the case of utilitymodels and a term of fifteen years in the case of designs. A third-party user must obtain consentor a proper license from the patent owner to use the patent. Otherwise, the use constitutes aninfringement of patent rights.

We have registered 193 patents and applied for 218 patents with the PRC State IntellectualProperty Office as of June 30, 2021.

Copyright. The Copyright Law (《中華人民共和國著作權法》) was adopted in 1990 andamended in 2001, 2010 and 2020. The amended version in 2020 came into effect on June 1,2021. The amended Copyright Law extends copyright protection to internet activities, productsdisseminated over the internet and software products. In addition, there is a voluntaryregistration system administered by the China Copyright Protection Center. The amendedCopyright Law also requires registration of a copyright pledge.

According to the Copyright Law, an infringer will be subject to various civil liabilities, whichinclude stopping the infringement, eliminating the damages, apologizing to the copyrightowners and compensating the losses of copyright owners. The Copyright Law further providesthat the infringer must compensate the actual loss suffered by the copyright owner. If the actualloss of the copyright owner is difficult to calculate, the illegal income received by the infringeras a result of the infringement will be deemed as the actual loss or if such illegal income is alsodifficult to calculate, the court can decide the amount of the actual loss up to RMB5,000,000.

To address the problem of copyright infringement related to the content posted or transmittedover the internet, the National Copyright Administration and the MIIT jointly promulgated theMeasures for Administrative Protection of Copyright Related to the Internet (《互聯網著作權行政保護辦法》) in 2005.

The Protection of the Right of Communication through Information Networks (《信息網絡傳播權保護條例》) was promulgated by the State Council in 2006 and amended in 2013. Underthis regulation, with respect to any information storage space, search or link services providedby an internet service provider, if the legitimate right owner believes that the works,performance or audio or video recordings pertaining to that service infringe his or her rights

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of communication, the right owner may give the internet service provider a written noticecontaining the relevant information along with preliminary materials proving that aninfringement has occurred, and requesting that the internet service provider delete, ordisconnect the links to, such works or recordings. The right owner will be responsible for thetruthfulness of the content of the notice. Upon receipt of the notice, the internet serviceprovider must delete or disconnect the links to the infringing content immediately and forwardthe notice to the user that provided the infringing works or recordings. If the written noticecannot be sent to the user due to the unknown IP address, the contents of the notice shall bepublicized via information networks. If the user believes that the subject works or recordingshave not infringed others’ rights, the user may submit to the internet service provider a writtenexplanation with preliminary materials proving non-infringement, and a request for therestoration of the deleted works or recordings. The internet service provider should thenimmediately restore the deleted or disconnected content and forward the user’s writtenstatement to the right owner.

Under the Civil Code of the PRC (《中華人民共和國民法典》) effective from January 1, 2021,both internet users and internet service providers may be liable for the wrongful acts of userswho infringe the lawful rights of other parties. If an internet user utilizes internet services tocommit a tortious act, the party whose rights are infringed may request the internet serviceprovider to take measures, such as removing or blocking the content, or disabling the linksthereto, to prevent or stop the infringement. If the internet service provider does not takenecessary measures after receiving such notice, it shall be jointly liable for any further damagessuffered by the rights holder. Furthermore, if an internet service provider fails to take necessarymeasures when it knows that an internet user utilizes its internet services to infringe the lawfulrights and interests of other parties, it shall be jointly liable with the internet user for damagesresulting from the infringement.

To address issues related to the hearing of civil disputes concerning the infringement of theright of communication through information networks, the PRC Supreme People’s Court issuedthe Provisions on Several Issues Concerning the Application of Law in Hearings of CivilDispute Cases on the Infringement of Information Networking Transmission Rights (《最高人民法院關於審理侵害信息網絡傳播權民事糾紛案件適用法律若干問題的規定》), which tookeffect as of January 1, 2013 and was amended in 2020. This document provides more detailedguidance as to the circumstances in which the provision by network users or network serviceproviders of other’s works, performances, and audio or video products without permission fromthe rights owner constitutes infringement of information network transmission rights. Thisdocument provides that internet service providers will be jointly liable if they assist ininfringing activities or fail to remove infringing content from their websites once they knowof the infringement or receive notice from the rights holder. This document also provides thatwhere a network service provider obtains economic advantage directly from the works,performances, and sound or visual recordings provided by the network service provider, it mustpay close attention to infringement of network information transmission rights by networkusers.

In order to further implement the Computer Software Protection Regulations (《計算機軟件保護條例》) promulgated by the State Council on December 20, 2001 and amended on January30, 2013, the National Copyright Administration of the PRC issued Computer SoftwareCopyright Registration Procedures (《計算機軟件著作權登記辦法》) on February 20, 2002,which apply to software copyright registration, license contract registration and transfercontract registration.

In compliance with, and in order to take advantage of, the above rules, we have registered 302software copyrights as of June 30, 2021.

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Trademark. The Trademark Law (《中華人民共和國商標法》), adopted in 1982 and revised in1993, 2001, 2013 and 2019, protects registered trademarks. The Trademark Law has adopteda “first-to-file” principle with respect to trademark registration. Where a trademark for whicha registration has been made is identical or similar to another trademark that has already beenregistered or been subject to a preliminary examination and approval for use on the same kindof or similar commodities or services, the application for registration of such trademark maybe rejected. Any person applying for the registration of a trademark must not prejudice theexisting right of others obtained by priority, nor may any person register in advance atrademark that has already been used by another person and has already gained a “sufficientdegree of reputation” through that person’s use. After receiving an application, the TrademarkOffice, which is under the National Intellectual Property Administration and handles trademarkregistration affairs in China, will make a public announcement if the relevant trademark passesthe preliminary examination. Within three months after such public announcement, any personmay file an objection against a trademark that has passed a preliminary examination. The PRCTrademark Office’s decisions on rejection, objection or cancellation of an application may beappealed to the National Intellectual Property Administration, whose decision may be furtherappealed through judicial proceedings. If no objection is filed within three months after thepublic announcement period or if the objection has been overruled, the PRC Trademark Officewill approve the registration and issue a registration certificate, at which point the trademarkis deemed to be registered and will be effective for a renewable ten-year period, unlessotherwise declared invalid or revoked. The licensor shall file the trademark licensing with theTrademark Office for record. The licensing of a trademark that has not been filed for recordmay not be used against a bona fide third party. “ ” and “ ” are registeredtrademarks of SINA’s subsidiaries in China and are exclusively licensed to us for use.

Domain Names. On August 24, 2017, the MIIT promulgated the Measures for Administrationof Domain Names (《互聯網域名管理辦法》) to replace the Measures for Administration ofDomain Names for the Chinese Internet (《中國互聯網絡域名註冊暫行管理辦法》). Thesemeasures regulate the registration of domain names, including the domain name “.CN”. OnNovember 27, 2017, the MIIT promulgated the Notice on Regulating the Use of Domain Namesin Providing Internet-based Information Services (《關於規範互聯網信息服務使用域名的通知》), which became effective on January 1, 2018. Pursuant to this notice, the domain nameused by an internet-based information service provider in providing internet-based informationservices must be registered and owned by such provider in accordance with the law. If theinternet-based information service provider is an entity, the domain name registrant must be theentity (or any of the entity’s shareholders), or the entity’s principal or senior executive. Wehave registered domain names including weibo.com, weibo.cn, and weibo.com.cn.

Anti-unfair Competition. Under the Anti-Unfair Competition Law (《中華人民共和國反不正當競爭法》), effective in 1993 and revised in 2017 and 2019, a business operator is prohibitedfrom carrying out acts intending to cause confusion, which would mislead others into thinkingthat its products belong to another party or that there is an association with another party, by:

• using without permission, a mark that is identical with or similar to product names,packaging or decoration of others with a certain degree of influence;

• using without permission, the name of an enterprise, a social organization or an individualwith a certain degree of influence;

• using without permission, the main element of a domain name, website name or webpagewith a certain degree of influence;

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• carrying out confusing acts that are intended to mislead others into thinking that a productbelongs to another party or there is an affiliation with another party.

REGULATIONS ON FOREIGN EXCHANGE

Under the 2008 Foreign Currency Administration Rules (《中華人民共和國外匯管理條例》),if documents certifying the purposes of the conversion of RMB into foreign currency aresubmitted to the relevant foreign exchange conversion bank, the RMB will be convertible forcurrent account items, including the distribution of dividends, interest and royalties payments,and trade and service-related foreign exchange transactions. Conversion of RMB for capitalaccount items, such as direct investment, loans, securities investment and repatriation ofinvestment, however, is subject to the approval of SAFE or its local counterparts.

Under the 1996 Administration Rules of the Settlement, Sale and Payment of Foreign Exchange(《結匯、售匯及付匯管理規定》), foreign-invested enterprises may only buy, sell and/orremit foreign currencies at banks authorized to conduct foreign exchange business afterproviding valid commercial documents and, in the case of capital account item transactions,obtaining approval from SAFE or its local counterparts. Capital investments by PRC entitiesoutside of China, after obtaining the required approvals from the relevant approval authorities,such as the Ministry of Commerce and the National Development and Reform Commission ortheir local counterparts, are also required to register with SAFE or its local counterparts.

SAFE promulgated a circular on November 19, 2012, or Circular No. 59 (《國家外匯管理局關於進一步改進和調整直接投資外匯管理政策的通知》), which tightens the examination onthe authenticity of settlement of net proceeds from an offering and requires that the settlementof net proceeds shall be in accordance with the description in its prospectus.

On March 30, 2015, the SAFE issued the Circular on Reform of the Administrative Rules ofthe Payment and Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises(《國家外匯管理局關於改革外商投資企業外匯資本金結匯管理方式的通知》), or SAFECircular 19, which became effective on June 1, 2015. Pursuant to SAFE Circular 19,foreign-invested enterprises may either continue to follow the current payment-based foreigncurrency settlement system or elect to follow the “conversion-at-will” regime of foreigncurrency settlement. Where a foreign-invested enterprise follows the conversion-at-will regimeof foreign currency settlement, it may convert part or all of the amount of the foreign currencyin its capital account into Renminbi at any time. The converted Renminbi will be kept in adesignated account labeled as settled but pending payment, and if the foreign-investedenterprise needs to make payment from such designated account, it still needs to go throughthe review process with its bank and provide necessary supporting documents. SAFE Circular19, therefore, has substantially lifted the restrictions on the usage by a foreign-investedenterprise of its RMB registered capital converted from foreign currencies. According to SAFECircular 19, such Renminbi capital may be used at the discretion of the foreign-investedenterprise and the SAFE will eliminate the prior approval requirement and only examine theauthenticity of the declared usage afterwards.

On June 9, 2016, SAFE issued the Circular on Reforming and Regulating Policies on theControl over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, whichbecame effective on the same day. Pursuant to SAFE Circular 16, enterprises registered inChina may convert their foreign debts from foreign currency to RMB on discretionary basis.SAFE Circular 16 provides an integrated standard for conversion of foreign exchange undercapital account items (including but not limited to foreign currency capital and foreign debts)on discretionary basis which applies to all enterprises registered in China. SAFE Circular 16reiterates the principle that RMB converted from foreign currency-denominated capital of a

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company may not be directly or indirectly used for purposes beyond its business scope orprohibited by PRC laws or regulations, while such converted RMB shall not be provided asloans to its non-affiliated entities, or used for construction and purchase of non-self-used realestate (excluding real estate enterprises) or unless otherwise expressly provided in law, directlyor indirectly used in securities investment or other financial management excluding the bankcapital preservation products. As SAFE has not provided detailed guidelines with respect to itsinterpretation or implementation, it is uncertain how these rules will be interpreted andimplemented.

On October 23, 2019, SAFE issued the Notice of the State Administration of Foreign Exchangeon Further Facilitating Cross-border Trade and Investment, or SAFE Circular 28, which,among other things, allows all foreign-invested companies to use RMB converted from foreigncurrency-denominated capital for equity investments in China, for so long as there is a truthfulequity investment, and such equity investment does not violate applicable laws and doescomply with the negative list on foreign investment.

In utilizing the proceeds, we received from our offerings or debt financings, as an offshoreholding company with a PRC subsidiary, we may (i) make additional capital contributions toour PRC subsidiaries, (ii) establish new PRC subsidiaries and make capital contributions tothese new PRC subsidiaries, (iii) make loans to our PRC subsidiaries, or (iv) acquire offshoreentities with business operations in China in offshore transactions. However, most of these usesare subject to PRC regulations and/or approvals. For example, loans by us to our PRCsubsidiaries, which are foreign-invested enterprises, to finance their activities cannot exceedstatutory limits and must be registered with SAFE or its local branches.

REGULATIONS ON EMPLOYEE STOCK OPTIONS PLANS

In 2006, the People’s Bank of China promulgated the Administrative Measures of ForeignExchange Matters for Individuals (《個人外匯管理辦法》), setting forth the respectiverequirements for foreign exchange transactions by individuals (both PRC and non-PRCcitizens) under either the current account or the capital account. SAFE issued implementingrules for these measures in 2007 that specified approval requirements for certain capitalaccount transactions, such as a PRC citizen’s participation in employee stock ownership plansor share option plans of an overseas publicly listed company. In 2007, SAFE promulgated theApplication Procedures of Foreign Exchange Administration for Domestic IndividualsParticipating in Employee Stock Ownership Plans or Stock Option Plans of Overseas ListedCompanies (《境內個人參與境外上市公司員工持股計劃和認股期權計劃等外匯管理操作規程》). In 2012, SAFE promulgated the Notice on the Administration of Foreign ExchangeMatters for Domestic Individuals Participating in the Stock Incentive Plans of Overseas ListedCompanies (《國家外匯管理局關於境內個人參與境外上市公司股權激勵計劃外匯管理有關問題的通知》) to replace the former procedures. The new notice simplifies the requirements andprocedures for the registration of stock incentive plan participants, especially with respect tothe required application documents and the absence of strict requirements on offshore andonshore custodian banks, as were stipulated in the former procedures. The purpose of both theformer procedures and the new notice is to regulate the foreign exchange administration ofPRC resident individuals who participate in employee stock holding plans or share option plansof overseas listed companies.

Under these rules, for PRC resident individuals who participate in stock incentive plans ofoverseas publicly listed companies, which includes employee stock ownership plans, stockoption plans and other incentive plans permitted by relevant laws and regulations, a PRCdomestic qualified agent or the PRC subsidiary of such overseas listed company must, amongother things, file on behalf of such resident an application with SAFE or its local counterpart

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to obtain approval for an annual allowance with respect to the purchase of foreign exchangein connection with the stock holding or exercise of share options, as PRC residents may notdirectly use overseas funds to purchase shares or exercise share options. In addition, withinthree months after any substantial changes to any such stock incentive plan, including forexample, any changes due to a merger or acquisition or changes to the domestic or overseascustodian agent, the domestic agent must update the registration with SAFE.

Under the Foreign Currency Administration Rules (《中華人民共和國外匯管理條例》), asamended in 2008, the foreign exchange proceeds of domestic entities and individuals can beremitted into China or deposited abroad, subject to the terms and conditions to be issued bySAFE. However, the implementing rules with respect to depositing foreign exchange proceedsabroad have not been issued by SAFE. The foreign exchange proceeds from the sales of sharescan be converted into RMB or transferred to such individuals’ foreign exchange savingsaccount after the proceeds have been remitted back to the special foreign exchange accountopened at the PRC domestic bank. If share options are exercised in a cashless exercise, the PRCdomestic individuals are required to remit the proceeds to special foreign exchange accounts.

Many issues with respect to the new notice require further interpretation. We and our PRCemployees who have participated in an employee stock ownership plan or share option plan aresubject to the new notice. If we or our PRC employees fail to comply with the new notice, weand our PRC employees may face sanctions imposed by the PRC foreign exchange authorityor any other PRC government authorities, including restrictions on foreign currencyconversions and additional capital contributions to our PRC subsidiaries.

In addition, the State Administration of Taxation has issued circulars concerning employeeshare options. Under these circulars, our employees working in China who exercise shareoptions will be subject to PRC individual income taxes. Our PRC subsidiaries have obligationsto file documents related to employee share options with the relevant tax authorities andwithhold individual income taxes of employees who exercise their share options.

LABOR LAWS AND SOCIAL INSURANCE

Pursuant to the PRC Labor Law (《中華人民共和國勞動法》) and the PRC Labor ContractLaw (《中華人民共和國勞動合同法》), employers must execute written labor contracts withfull-time employees. All employers must compensate their employees with wages equal to atleast the local minimum wage standards. All employers are required to establish a system forlabor safety and sanitation, strictly abide by state rules and standards and provide employeeswith workplace safety training. Violations of the PRC Labor Contract Law and the PRC LaborLaw may result in the imposition of fines and other administrative liabilities. Criminal liabilitymay arise for serious violations.

In addition, according to the PRC Social Insurance Law (《中華人民共和國社會保險法》) andthe Regulations on the Administration of Housing Provident Funds (《住房公積金管理條例》), employers in China are obliged to provide employees with welfare schemes coveringpension insurance, unemployment insurance, maternity insurance, work-related injuryinsurance, medical insurance and housing funds.

To comply with these laws and regulations, we have caused all of our full-time employees toenter into labor contracts and provide our employees with the proper welfare and employmentbenefits. If we are made subject to severe penalties or incur significant liabilities in connectionwith labor disputes or investigations, our business and results of operations may be adverselyaffected.

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REGULATIONS ON CONCENTRATION IN MERGER AND ACQUISITIONTRANSACTIONS

The M&A Rules (《關於外國投資者並購境內企業的規定》) established procedures andrequirements that could make merger and acquisition activities by foreign investors moretime-consuming and complex. The M&A Rules require, among other things, that the Ministryof Commerce be notified in advance of any change-of-control transaction in which a foreigninvestor will take control of a PRC domestic enterprise or a foreign company with substantialPRC operations, if certain thresholds under the Provisions on Thresholds for Prior Notificationof Concentrations of Undertakings (《國務院關於經營者集中申報標準的規定》) issued by theState Council on August 3, 2008 and amended on September 18, 2018 are triggered. OnFebruary 7, 2021, the Anti-monopoly Commission of the State Council officially promulgatedthe Guidelines to Anti-Monopoly in the Field of Internet Platforms (《關於平台經濟領域的反壟斷指南》), which reinforces antitrust merger review for internet platform relatedtransactions and clarifies at the first time the filing procedures is applicable to the transactionsinvolving variable interest structures.

Complying with these requirements could affect our ability to expand our business or maintainour market share.

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AUTHORIZED AND ISSUED SHARE CAPITAL

The following is a summary of our Company’s authorized and issued share capital immediatelyprior to, and upon the completion of, the Global Offering, assuming that the Global Offeringbecomes unconditional and the Offer Shares are issued pursuant to the Global Offering,excluding any conversion of Class B ordinary shares into Class A ordinary shares upon exerciseof the Over-allotment Option.

1. Share capital as at September 30, 2021

(i) Authorized share capital

NumberDescription of

ordinary shares

Approximateaggregate nominal

value of shares

1,800,000,000 ��Class A ordinary

shares US$450,000.00

200,000,000 ��Class B ordinary

shares US$50,000.00

400,000,000 �� Undesignated US$100,000.00

Total �� US$600,000.00

(ii) Issued and outstanding*


ordinary shares


value of shares

127,312,831 ��Class A ordinary

shares US$31,828.21


shares US$25,444.74

Total �� US$57,272.95

Note:

* Excluding 8,700,524 Class A ordinary shares issued and reserved for future issuance upon the exercising orvesting of awards granted under our Share Incentive Plans.

SHARE CAPITAL

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2. Share capital immediately following the completion of the Global Offering

(i) Authorized share capital


ordinary shares


value of shares

1,800,000,000 ��Class A ordinary

shares US$450,000.00


shares US$50,000.00

400,000,000 �� Undesignated US$100,000.00

Total �� US$600,000.00

(ii) Issued and outstanding*


ordinary shares


value of shares

138,312,831 ��Class A ordinary

shares US$34,578.21


shares US$24,069.74

Total �� US$58,647.95

Note:

* Excluding 8,700,524 Class A ordinary shares issued and reserved for future issuance upon the exercising orvesting of awards granted under our Share Incentive Plans.

WEIGHTED VOTING RIGHTS STRUCTURE

Under our weighted voting rights structure, our share capital comprises Class A ordinary sharesand Class B ordinary shares. Each Class A ordinary share entitles the holder to exercise onevote and each Class B ordinary share entitles the holder to exercise three votes respectively,on all matters that require a shareholder’s vote.

For further details, see the summary of the Articles of Association in Appendix III to thisdocument.

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The table below sets out the ownership and voting rights to be held by the WVR beneficiaryupon the completion of the Global Offering:

Number ofShares

Approximatepercentage of

issued andoutstanding

share capital(1)


votingrights(1)(2)

Class B ordinary shares held by the WVR beneficiaries �� 96,278,958 41.0% 67.6%

Notes:

(1) Excluding the 8,700,524 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSsreserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plans,and without taking into account any conversion of Shares upon exercise of the Over-allotment Option, theShares to be issued pursuant to the Share Incentive Plans, including pursuant to the exercise of options or otherawards that have been or may be granted from time to time and any issuance or repurchase of Shares and/orADSs that we may make.

(2) On the basis that Class A ordinary shares entitle the Shareholder to one vote per share and Class B ordinaryshares entitle the Shareholder to three votes per share.

Each Class B ordinary share is convertible into one Class A ordinary share at any time by theholder thereof. Upon the conversion of all the issued and outstanding Class B ordinary sharesinto Class A ordinary shares, our Company will issue 96,278,958 Class A ordinary shares,representing approximately 69.6% the total number of issued and outstanding Class A ordinaryshares upon completion of the Global Offering (without taking into account any conversion ofShares upon exercise of the Over-allotment Option, the Shares to be issued pursuant to theShare Incentive Plans, including pursuant to the exercise of options or the vesting of shareawards that have been or may be granted from time to time and any issuance or repurchase ofShares and/or ADSs that we may make).

If at any time SINA Corporation and its Affiliates (as defined in the Articles of Association)collectively own less than 5% of the total number of the issued and outstanding Class BOrdinary Shares, each issued and outstanding Class B Ordinary Share shall be automaticallyand immediately converted into one Class A ordinary share, and no Class B Ordinary Sharesshall be issued by our Company thereafter. Class B ordinary shares shall also be automaticallyand immediately converted into an equal number of Class A ordinary shares: (1) upon anytransfer of such Class B ordinary shares by a holder thereof to any person or entity which isnot the Founder or a Founder’s Affiliate; or (2) upon a change of control of any direct orindirect holder of any such Class B ordinary share, including, but not limited to, any personother than the Founder or a Founder’s Affiliate gaining “control” over any of the SINA ParentCompanies (e.g. by entering into an agreement with the Founder to jointly control the SINAParent Companies), even if the Founder or a Founder’s Affiliate remains to have joint “control”of the SINA Parent Companies. For details, see “Waivers and Exemptions — ShareholderProtection Requirements”.

SHARE CAPITAL

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WVR Beneficiaries

Immediately upon the completion of the Global Offering, the WVR beneficiaries will be thefollowing:

Number ofClass B Ordinary


voting rights(1)(2)

Mr. Charles Chao �� 96,278,958 67.6%New Wave MMXV Limited �� 96,278,958 67.6%Sina Group Holding Company Limited�� 96,278,958 67.6%SINA Corporation �� 96,278,958 67.6%

Notes:

(1) Excluding the 8,700,524 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSsreserved for future issuances upon the exercise or vesting of awards granted under our Share Incentive Plans,and without taking into account any conversion of Shares upon exercise of the Over-allotment Option, theShares to be issued pursuant to the Share Incentive Plans, including pursuant to the exercise of options or otherawards that have been or may be granted from time to time and any issuance or repurchase of Shares and/orADSs that we may make.

(2) On the basis that Class A ordinary shares entitle the holder to one vote per share and Class B ordinary sharesentitle the holder to three votes per share.

Our Company’s WVR structure enables the WVR beneficiary to hold shares with a highervoting power than the holders of Class A ordinary shares. SINA Corporation, is the WVRbeneficiary holding the highest percentage of voting rights; such shareholding will enable ourCompany to benefit from the continuing vision of SINA Corporation, who will exercise itsvoting power with a view to our Company’s long-term prospects and strategy. For furtherinformation about our relationship with SINA Corporation, see “Relationship with OurControlling Shareholders”.

Prospective investors are advised to be aware of the potential risks of investing in companieswith weighed voting rights structures, in particular that interests of the WVR beneficiaries maynot necessarily always be aligned with those of our Shareholders as a whole, and that the WVRbeneficiaries will be in a position to exercise their higher voting power to influence the affairsof our Company and the outcome of shareholders’ resolutions, irrespective of how othershareholders vote. Prospective investors should make the decision to invest in our Companyonly after due and careful consideration. For further information about the risks associated withthe WVR structure adopted by our Company, see “Risk Factors”.

Save for the weighted voting rights attached to Class B ordinary shares, the rights attached toall classes of Shares are identical. For further information about the rights, preferences,privileges and restrictions of the Class A ordinary shares and Class B ordinary shares, pleasesee “Summary of our Constitution and Cayman Company Law — 2 Articles of Association” inAppendix III to this document for further details.

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In addition, Rule 19C.07(7) requires that members holding a minority shareholding in anissuer’s total number of issued shares must be able to requisition an extraordinary generalmeeting and add resolutions to a meeting agenda. The minimum stake required to do so mustnot be higher than 10% of the voting rights, on a one vote per share basis, in the share capitalof the issuer, while the minimum stake as currently set out in our Company’s Articles is at leasttwo shareholdings holding not less than one-third of the total voting rights in the paid upcapital of our Company.

Our Company will put forth resolutions at the First GM to revise the Articles, so that (i) theminimum stake required to convene an extraordinary general meeting and add resolutions to ameeting agenda will be one-tenth of the voting rights, on a one vote per share basis, in the sharecapital of our Company; and (ii) the quorum for a general meeting of our Company will belowered from the current one or more shareholders holding at least one-third of the aggregatevoting power of our Company to one or more shareholders holding at least one-tenth of theaggregate voting power of our Company.

The Founder and SINA Corporation have provided an irrevocable undertaking to the Companyand the Hong Kong Stock Exchange (the “Undertakings”) prior to the date of this documentto be present and vote in favor of the proposed resolutions outlined above with a view toensuring that there may be adequate votes in favor of such resolutions, and if the proposedresolutions are not approved at the First GM, continue to be present and vote in favor of suchproposed resolutions at each subsequent general meeting at which our Company puts forth suchresolutions until all resolutions are approved. For the avoidance of doubt, the Founder andSINA Corporation acknowledged and agreed that the shareholders rely on the Undertakings inacquiring and holding their shares. The Founder and SINA Corporation acknowledged andagreed that the Undertakings are intended to confer a benefit on our Company and allshareholders and may be enforced by our Company and/or any shareholder against the Founderand SINA Corporation. See “Waivers and Exemptions — Shareholder ProtectionRequirements” for further details.

Notwithstanding the above, the Company intends to hold the First GM on December 1, 2021to put forth the relevant resolutions for revising the Articles. In the case where the relevantamendments are approved and adopted at the First GM before the Listing, the relevant waiversas well as the voting undertakings will lapse automatically.

Ranking

The Class A ordinary shares are ordinary shares in the share capital of our Company and rankequally with all Class A ordinary shares currently in issue or to be issued and, in particular, willrank in full for all dividends or other distributions declared, made or paid on the Class Aordinary shares in respect of a record date that falls after the date of this document.

GENERAL MEETINGS

See “Summary of Our Constitution and Cayman Company Law” in Appendix III.

SHARE INCENTIVE PLANS

See “Directors and Senior Management — Compensation — Share Incentive Plans”.

SHARE CAPITAL

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We estimate that we will receive net proceeds from the Global Offering of approximatelyHK$2,004.3 million after deducting estimated underwriting fees and the estimated offeringexpenses payable by us and based upon maximum Public Offer Price, HK$388.00 per OfferShare for both Hong Kong Public Offering and International Offering, and assuming theOver-allotment Option is not exercised. If the Over-allotment Option is exercised in full, weestimate that our Company will not receive any additional net proceeds.

The International Offer Price in the International Offering may be higher than, or the same as,the Public Offer Price in the Hong Kong Public Offering. See “Structure of the Global Offering— Pricing and Allocation.”

We plan to use the net proceeds we will receive from the Global Offering for the followingpurposes:

• Approximately 45% (approximately HK$901.9 million, assuming that theOver-allotment Option is not exercised) for continuing to grow our user base anduser engagement, and enhance our content ecosystem, including but not limited to:

� nurture our content ecosystem for our users, customers and content creators by (i)broadening our content offerings, including promoting new content verticals thatwould meet the emerging interests of users on our platform, and investing inpremium content, and (ii) expanding the cooperation with MCNs and incentivizingtalented content creators to enrich our content offering. Additionally, we plan tofurther enrich the video content offerings by promoting the supply and consumptionof video content on our platform such as strengthening cooperation with copyrightowners in key content verticals to increase our video content supply;

� further develop innovative products and features to meet the disparate and evolvingneeds of users and advertisers and to capture any new trends in the industry, by(i) building simple and useful tools for users to discover, create and distributecontent and interact with others on our platform in real time, such as innovativesocial interaction features and content editing tools, and (ii) developing a fullspectrum of advertising solutions to enable customers to conduct effectivemarketing activities, especially through optimizing our video advertising offeringsand industry-specific advertising offerings; and

� expand our user reach by executing channel marketing strategies and promotionalactivities, such as online and offline promotions and marketing activities, to attractusers from different demographics and to enhance user acquisition efficiency anduser engagement through collaboration with smartphone manufacturers andprogrammatic buying partners. For instance, smartphone manufacturers may pre-install our Weibo application on new smartphones, which will be an importantsource of new users, and programmatic buying partners, such as top applications,may assist us on traffic direction and user activation.

• Approximately 25% (approximately HK$501.1 million, assuming that theOver-allotment Option is not exercised) for research and development to enhanceour user experience and monetization capabilities, including but not limited to:

� refine our recommendation engine by optimizing our artificial intelligence and bigdata algorithms and adopting new data rules to improve the relevance of informationwe push to users to increase user stickiness. This is also important for ourmonetization because we believe that advertisements can also gain greater relevancefrom social context and become part of the user experience.

USE OF PROCEEDS

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� improve our proprietary hybrid cloud platform to further optimize and facilitateefficient data storage, distribution and analytics on our platform so as to efficientlyhandle the hyperscale data generated on our platform in real-time, especially for hottopics;

� further scale up our IT infrastructure, including our video platform and livestreaming system, to enhance the functionality of our video encoder, to efficientlyhandle the massive volume of data generated for videos on our platform, and toimprove user experience when enjoying videos and live streaming functions on ourplatform in various internet conditions;

� develop customized server technology to improve server configuration andprocessing capacity so that a single server can deploy more services and the accessspeed between services can be faster and user experience can be improved;

� develop container technology and bare-metal server technology for the expansion ofbusiness;

� develop block storage technology to realize the hot migration of services to maintainnormal service operation in case of hardware failure;

� invest in research and development of edge computing platform to improve thespeed of uploading pictures and videos, enhance the processing speed of bulletchats, and process users’ behavior data in real time to enhance the real-timerecommendation functionality; and

� recruit, train and retain more research and development talents for these purposes.

• Approximately 20% (approximately HK$400.9 million, assuming that theOver-allotment Option is not exercised) for selectively pursuing strategic alliances,investments and acquisitions, including but not limited to:

� form strategic alliances and partnerships and pursue investments and acquisitions inbusinesses that are synergistic and complementary to our ecosystem, including thosebusinesses or assets that can enhance our user insights, technology, products andecosystem; and

� invest in businesses or form strategic alliances and partnerships to further enhanceour monetization capabilities. As of the Latest Practicable Date, we have notidentified any specific target of potential merger or acquisition.

• Approximately 10% (approximately HK$200.4 million, assuming that theOver-allotment Option is not exercised) for working capital and general corporatepurposes.

The foregoing represents our current intentions based upon our present plans and businessconditions to use and allocate the net proceeds of this offering. Our management, however, willhave significant flexibility and discretion to apply the net proceeds of this offering. If anunforeseen event occurs or business conditions change, we may use the proceeds of thisoffering differently than as described in this document.

The unused net IPO proceeds will only be held in short-term demand deposits with licensedbanks or authorised financial institutions.

USE OF PROCEEDS

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HONG KONG UNDERWRITERS

Goldman Sachs (Asia) L.L.C.Credit Suisse (Hong Kong) LimitedCLSA LimitedChina International Capital Corporation Hong Kong Securities LimitedNomura International (Hong Kong) LimitedDeutsche Bank AG, Hong Kong BranchHaitong International Securities Company LimitedHuatai Financial Holdings (Hong Kong) LimitedValuable Capital LimitedABCI Securities Company LimitedCMBC Securities Company LimitedCMB International Capital Limited

UNDERWRITING

This document is published solely in connection with the Hong Kong Public Offering. TheHong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on aconditional basis. The International Offering is expected to be fully underwritten by theInternational Underwriters. If, for any reason, we do not agree with the Joint Representatives(for themselves and on behalf of the Underwriters) on the pricing of the Offer Shares, theGlobal Offering will not proceed and will lapse.

The Global Offering comprises the Hong Kong Public Offering of initially 1,100,000 HongKong Offer Shares and the International Offering of initially 9,900,000 International OfferShares, subject, in each case, to reallocation on the basis as described in “Structure of theGlobal Offering” as well as to the Over-allotment Option (in the case of the InternationalOffering).

UNDERWRITING ARRANGEMENTS AND EXPENSES

Hong Kong Public Offering

Hong Kong Underwriting Agreement

Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong OfferShares for subscription on the terms and conditions set out in this document and the Hong KongUnderwriting Agreement at the Public Offer Price.

Subject to (a) the Hong Kong Stock Exchange granting approval for the listing of, andpermission to deal in, the Shares in issue and to be issued or sold pursuant to the GlobalOffering (including the Shares which may be sold pursuant to the exercise of the Over-allotment Option) and the Shares to be issued pursuant to the Share Incentive Plans on the MainBoard of the Hong Kong Stock Exchange and such approval not having been subsequentlyrevoked prior to the commencement of trading of the Shares on the Stock Exchange and (b)certain other conditions set out in the Hong Kong Underwriting Agreement, the Hong KongUnderwriters have agreed severally but not jointly to procure subscribers for, or themselves tosubscribe for, their respective applicable proportions of the Hong Kong Offer Shares beingoffered which are not taken up under the Hong Kong Public Offering on the terms andconditions set out in this document and the Hong Kong Underwriting Agreement.

UNDERWRITING

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The Hong Kong Underwriting Agreement is conditional on, among other things, theInternational Underwriting Agreement having been executed and becoming unconditional andnot having been terminated in accordance with its terms.

Grounds for Termination

If any of the events set out below occur at any time prior to 8:00 a.m. on the Listing Date, theJoint Representatives (for themselves and on behalf of the Hong Kong Underwriters) shall beentitled, in their absolute discretion and by giving written notice to the Company to terminatethe Hong Kong Underwriting Agreement with immediate effect:

(a) trading generally shall have been suspended or materially limited on, or by, as the casemay be, any of the New York Stock Exchange, the American Stock Exchange, theNASDAQ Global Market or the Hong Kong Stock Exchange or other relevant exchanges;or

(b) trading of any securities of the Company shall have been suspended or materially limitedon any exchange or in any over-the-counter market;

(c) a material disruption in commercial banking, securities settlement, payment or clearanceservices in the Cayman Islands, Hong Kong, the PRC or the United States (each a“Relevant Jurisdiction” and collectively, the “Relevant Jurisdictions”) shall haveoccurred; or

(d) any moratorium on commercial banking activities shall have been declared by the federalor New York State authorities in the United States, Hong Kong, PRC or Cayman Islandsauthorities; or

(e) there shall have occurred any outbreak or escalation of hostilities or any change infinancial markets, currency exchange rates or controls, any calamity or crisis or anyevent, or series of events, in the nature of force majeure (including, without limitation,any acts of government, declaration of a national, regional or international emergency orwar, acts of war, acts of God, acts of terrorism or economic sanctions) that, in thereasonable judgment of the Joint Representatives, is material and adverse and which,singly or together with any other event specified in this paragraph, makes it, in thereasonable judgment of the Joint Representatives, impracticable to proceed with the offer,sale or delivery of the Offer Shares on the terms and in the manner contemplated in thisdocument, the registration statement, the general disclosure package and this document;or

(f) there shall have occurred an event that may or is likely to result in a material adversechange.

Undertakings Pursuant to the Hong Kong Underwriting Agreement

Except for (i) the issue, offer and sale of the Offer Shares pursuant to the Global Offering(including pursuant to Over-Allotment Option), (ii) the grant or issue of securities pursuant tothe terms of the Share Incentive Plans, including the effect of one or more bulk issuances ofShares, or ADSs upon deposit of Shares with the Company’s depository bank, and delivered tothe Company’s brokerage accounts existing on the date of the Hong Kong UnderwritingAgreement, in contemplation of future issuance under the Share Incentive Plans existing on thedate of Hong Kong Underwriting Agreement, (iii) the issue of any securities in connection withthe convertible senior notes due 2022 in the aggregate principal amount of US$900 million that

UNDERWRITING

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were issued by the Company in October 2017, (iv) any capitalization issue, capital reductionor consolidation or sub-division of the Shares, (v) any repurchase of securities pursuant to anyof the Company’s share repurchase programs existing on the date of Hong Kong UnderwritingAgreement, and during the period commencing on the date of the Hong Kong UnderwritingAgreement and ending on, and including, the date that is 90 days after the Listing Date (the“Lock-up Period”), the Company hereby undertakes to each of the Joint Sponsors, the JointRepresentatives, the Joint Global Coordinators, the Joint Bookrunners, the Joint LeadManagers and the Hong Kong Underwriters not to, without the prior written consent of theJoint Sponsors and the Joint Representatives (for themselves and on behalf of the Hong KongUnderwriters) and unless in compliance with the requirements of the Listing Rules,

(a) offer, allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract oragree to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell anyoption, warrant, contract or right to subscribe for or purchase, grant or purchase anyoption, warrant, contract or right to allot, issue or sell, or otherwise transfer or disposeof or create an Encumbrance over, or agree to transfer or dispose of or create anEncumbrance over, either directly or indirectly, conditionally or unconditionally, anyShares or ADSs or other securities of the Company, or any interest in any of the foregoing(including, without limitation, any securities convertible into or exchangeable orexercisable for or that represent the right to receive, or any warrants or other rights topurchase, any Shares or ADSs or other securities of the Company, or any interest in anyof the foregoing), or deposit any Shares or other securities of the Company, with adepositary in connection with the issue of depositary receipts; or

(b) enter into any swap or other arrangement that transfers to another, in whole or in part, anyof the economic consequences of ownership of any Shares or ADSs or other securities ofthe Company, or any interest in any of the foregoing (including, without limitation, anysecurities convertible into or exchangeable or exercisable for or that represent the rightto receive, or any warrants or other rights to purchase, any Shares or ADSs or othersecurities of the Company or any interest in any of the foregoing); or

(c) enter into any transaction with the same economic effect as any transaction specified inparagraphs (a) and (b) above; or

(d) offer to or contract to or agree to or announce any intention to effect any transactionspecified in paragraphs (a), (b) and (c) above,

in each case, whether any of the transactions specified in paragraphs (a), (b) and (c) above isto be settled by delivery of Shares or ADSs or other securities of the Company, or in cash orotherwise (whether or not the issue of such Shares or ADSs or other shares or securities willbe completed within the Lock-up Period).

International Offering

International Underwriting Agreement

In connection with the International Offering, we expect to enter into the InternationalUnderwriting Agreement with, among others, the Joint Representatives (for themselves and onbehalf of the International Underwriters) and the Selling Shareholder on the PriceDetermination Date. Under the International Underwriting Agreement and subject to theOver-allotment Option, the International Underwriters would, subject to certain conditions setout therein, agree severally but not jointly to procure subscribers for, or themselves tosubscribe for, their respective applicable proportions of the International Offer Shares initially

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being offered pursuant to the International Offering. The International Offering will consist ofa U.S. offering and a non-U.S. offering. It is expected that the International UnderwritingAgreement may be terminated on similar grounds as the Hong Kong Underwriting Agreement.Potential investors should note that in the event that the International Underwriting Agreementis not entered into, the Global Offering will not proceed. See “Structure of the Global Offering— The International Offering”.

Over-allotment Option

The Selling Shareholder is expected to grant to the International Underwriters the Over-allotment Option, exercisable by the Joint Representatives on behalf of the InternationalUnderwriters at any time from the Listing Date of International Underwriting Agreement until30 days after the last day for lodging applications under the Hong Kong Public Offering,pursuant to which may be required to sell up to an aggregate of 1,650,000 Shares, representingnot more than 15% of the number of Offer Shares initially available under the Global Offering,at the International Offer Price, to cover, among other things, over-allocations in theInternational Offering, if any. See “Structure of the Global Offering — The InternationalOffering — Over-allotment Option”.

Commissions and expenses

The Underwriters will receive an underwriting commission of up to 2.0% of the aggregate offerprice of all the Offer Shares (including any Offer Shares to be sold by the Selling Shareholderpursuant to the exercise of the Over-allotment Option), out of which they will pay anysub-underwriting commissions and other fees. The Underwriters may receive an additionalunderwriting commission of up to 0.35% of the aggregate offer price of all the Offer Shares,which is to be determined at the sole discretion of the Company.

For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering, theunderwriting commission will not be paid to the Hong Kong Underwriters but will instead bepaid, at the rate applicable to the International Offering, to the relevant InternationalUnderwriters.

The aggregate underwriting commissions and fees (excluding any incentive fee that may bepaid) together with the Hong Kong Stock Exchange listing fees, the SFC transaction levy andthe Hong Kong Stock Exchange trading fee, SEC registration fees, legal and other professionalfees and printing and all other expenses relating to the Global Offering are estimated to be upto approximately HK$129.7 million (assuming an indicative maximum offer price ofHK$388.00 per Offer Share for both Hong Kong Public Offering and International Offeringand the exercise of the Over-allotment Option in full) and will be paid by our Company, savefor such fees and expenses relating to the sale of the Sale Shares by the Selling Shareholderwhich will be borne by the Selling Shareholder.

ACTIVITIES BY SYNDICATE MEMBERS

The underwriters of the Hong Kong Public Offering and the International Offering (together,the “Syndicate Members”) and their affiliates may each individually undertake a variety ofactivities (as further described below) which do not form part of the underwriting or stabilizingprocess.

The Syndicate Members and their affiliates are diversified financial institutions withrelationships in countries around the world. These entities engage in a wide range ofcommercial and investment banking, brokerage, funds management, trading, hedging,

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investing and other activities for their own account and for the account of others. In theordinary course of their various business activities, the Syndicate Members and their respectiveaffiliates may purchase, sell or hold a broad array of investments and actively trade securities,derivatives, loans, commodities, currencies, credit default swaps and other financialinstruments for their own account and for the accounts of their customers. Such investment andtrading activities may involve or relate to assets, securities and/or instruments of the Companyand/or persons and entities with relationships with the Company and may also include swapsand other financial instruments entered into for hedging purposes in connection with theGroup’s loans and other debt.

In relation to the Shares, the activities of the Syndicate Members and their affiliates couldinclude acting as agent for buyers and sellers of the Shares, entering into transactions withthose buyers and sellers in a principal capacity, including as a lender to initial purchasers ofthe Shares (which financing may be secured by the Shares) in the Global Offering, proprietarytrading in the Shares, and entering into over the counter or listed derivative transactions orlisted or unlisted securities transactions (including issuing securities such as derivativewarrants listed on a stock exchange) which have as their underlying assets, assets including theShares. Such transactions may be carried out as bilateral agreements or trades with selectedcounterparties. Those activities may require hedging activity by those entities involving,directly or indirectly, the buying and selling of the Shares, which may have a negative impacton the trading price of the Shares. All such activities could occur in Hong Kong and elsewherein the world and may result in the Syndicate Members and their affiliates holding long and/orshort positions in the Shares, in baskets of securities or indices including the Shares, in unitsof funds that may purchase the Shares, or in derivatives related to any of the foregoing.

In relation to issues by Syndicate Members or their affiliates of any listed securities having theShares as their underlying securities, whether on the Stock Exchange or on any other stockexchange, the rules of the stock exchange may require the issuer of those securities (or one ofits affiliates or agents) to act as a market maker or liquidity provider in the security, and thiswill also result in hedging activity in the Shares in most cases.

All such activities may occur both during and after the end of the stabilizing period describedin “Structure of the Global Offering”. Such activities may affect the market price or value ofthe Shares, the liquidity or trading volume in the Shares and the volatility of the price of theShares, and the extent to which this occurs from day to day cannot be estimated. It should benoted that when engaging in any of these activities, the Syndicate Members will be subject tocertain restrictions, including the following:

(a) the Syndicate Members (other than the Stabilization Manager or any person acting for it)must not, in connection with the distribution of the Offer Shares, effect any transactions(including issuing or entering into any option or other derivative transactions relating tothe Offer Shares), whether in the open market or otherwise, with a view to stabilizing ormaintaining the market price of any of the Offer Shares at levels other than those whichmight otherwise prevail in the open market; and

(b) the Syndicate Members must comply with all applicable laws and regulations, includingthe market misconduct provisions of the SFO, including the provisions prohibiting insiderdealing, false trading, price rigging and stock market manipulation.

Certain of the Syndicate Members or their respective affiliates have provided from time totime, and expect to provide in the future, investment banking, commercial banking and otherservices to the Company and each of its affiliates for which such Syndicate Members or theirrespective affiliates have received or will receive customary fees and commissions.

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In addition, the Syndicate Members or their respective affiliates may provide financing toinvestors to finance their subscriptions of Offer Shares in the Global Offering.

LOCK-UP UNDERTAKINGS BY OUR DIRECTORS, EXECUTIVE OFFICERS ANDPRINCIPAL SHAREHOLDERS

Each of our directors, executive officers who holds interest in our Shares, and principalshareholders, has agreed with the Hong Kong Underwriters and International Underwritersthat, he/she/it will not, during the period beginning on the Price Determination Date and endingon the date that is 90 days after the Listing Date, without the prior written consent of the JointSponsors and the Joint Representatives, among other things: (1) offer, pledge, sell, contract tosell, sell any option or contract to purchase, purchase any option or contract to sell, grant anyoption, right or warrant to purchase, lend or otherwise transfer or dispose of, directly orindirectly, any ADSs or Shares of the Company or any securities convertible into or exercisableor exchangeable for ADSs or Shares (including without limitation, ADSs or Shares or suchother securities which may be deemed to be beneficially owned by a lock-up party inaccordance with the rules and regulations of the U.S. Securities and Exchange Commission andsecurities which may be issued upon exercise of a stock option or warrant), or publicly disclosethe intention to make any offer, sale, pledge or disposition, (2) enter into any swap or otheragreement that transfers, in whole or in part, any of the economic consequences of ownershipof the ADSs or Shares or such other securities, or publicly disclose the intention to enter intoany such swap or other agreement, whether any such transaction described in clause (1) or (2)above is to be settled by delivery of ADSs or Shares or such other securities, in cash orotherwise or (3) make any demand for or exercise any right with respect to the registration ofany ADSs or Shares or any security convertible into or exercisable or exchangeable for ADSsor Shares.

The restrictions described in the immediately preceding paragraph do not apply to, amongother items:

• transfers of shares of ADSs or Shares or such other securities as a bona fide gift or giftsor by testate succession or intestate distribution;

• any ADSs or Shares acquired by a lock-up party in the open market;

• the exercise of stock options or other similar awards granted pursuant to the our equityincentive plans, as disclosed in the herein; provided that such restriction shall apply toany of the ADSs or Shares issued upon such exercise;

• any Shares or such other securities that are used for the primary purpose of satisfying anytax or other governmental withholding obligation, through cashless surrender orotherwise, with respect to any award or equity-based compensation granted pursuant toour equity incentive plans, as disclosed in the Hong Kong Prospectus, or in connectionwith tax or other obligations as a result of testate succession or intestate distribution;

• transfers to a member or members of a lock-up party’s immediate family or to a trust, thedirect or indirect beneficiaries of which are a lock-up party and/or a member or membersof his or her immediate family;

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• the transfer of a lock-up party’s Shares or any security convertible into or exercisable orexchangeable for Shares to us pursuant to any contractual arrangement that provides forthe repurchase of a lock-up party’s Shares or such other securities by us or in connectionwith the termination of a lock-up party’s employment with us or a lock-up party’s failureto meet certain conditions set out upon receipt of such Shares or other such securities;

• transfer or distributions of ADSs, Shares or such other securities to limited partners,members or shareholders of a lock-up party pursuant to the shareholder or partnershipagreements existing on the date of the letter agreement;

• any Shares loaned to the Stabilizing Manager pursuant to the Stock BorrowingAgreement,

• the issue of any securities in connection with the convertible senior notes due 2022 in theaggregate principal amount of US$900 million that were issued by us in October 2017;

• the offer and sale of the Offer Shares pursuant to the Global Offering (including pursuantto option of the international underwriters to purchase additional Shares); and

• any sales made pursuant to a trading plan adopted pursuant to Rule 10b5-1 of theExchange Act prior to the date of the lock-up agreements, subject to certain conditions,or the establishment of a trading plan adopted pursuant to Rule 10b5-1 under theExchange Act on or after the date of the lock-up agreements, provided that no transfersoccur under such plan during the lock-up period and certain other conditions are satisfied.

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THE GLOBAL OFFERING

This document is published in connection with the Hong Kong Public Offering as part of theGlobal Offering. Goldman Sachs (Asia) L.L.C., Credit Suisse (Hong Kong) Limited, CLSALimited and China International Capital Corporation Hong Kong Securities Limited are theJoint Representatives of the Global Offering.

The listing of the Shares on the Main Board of the Hong Kong Stock Exchange is sponsoredby the Joint Sponsors. The Joint Sponsors have made an application on our behalf to the HongKong Stock Exchange for the listing of, and permission to deal in, the Shares in issue and tobe issued or sold as mentioned in this document.

11,000,000 Offer Shares will initially be made available under the Global Offering comprising:

(a) the Hong Kong Public Offering of initially 1,100,000 New Shares (subject to reallocation)in Hong Kong as described in “The Hong Kong Public Offering” below; and

(b) the International Offering of initially 9,900,000 Shares including 5,500,000 Sale Shares(subject to reallocation and the Over-allotment Option) pursuant to the shelf registrationstatement on Form F-3ASR that was filed with the SEC and became effective onNovember 26, 2021, the preliminary prospectus supplement filed with the SEC onNovember 26, 2021 and the final prospectus supplement to be filed with the SEC on orabout December 2, 2021.

Investors may either:

(a) apply for Hong Kong Offer Shares under the Hong Kong Public Offering; or

(b) apply for or indicate an interest for International Offer Shares under the InternationalOffering, but may not do both.

The Offer Shares will represent approximately 4.7% of the total Shares in issue immediatelyfollowing the completion of the Global Offering, assuming the Over-allotment Option is notexercised and without taking into account the Shares to be issued pursuant to the ShareIncentive Plans including pursuant to the exercise of share options or other awards that havebeen or may be granted from time to time. If the Over-allotment Option is exercised in full, theOffer Shares (including the Shares sold pursuant to the Over-allotment Option) will representapproximately 5.4% of the total Shares in issue immediately following the completion of theGlobal Offering and the full exercise of the Over-allotment Option (without taking into accountthe Shares to be issued pursuant to the Share Incentive Plans including pursuant to the exerciseof share options or other awards that have been or may be granted from time to time).

References in this document to applications, application monies or the procedure forapplications relate solely to the Hong Kong Public Offering.

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THE HONG KONG PUBLIC OFFERING

Number of Offer Shares Initially Offered

We are initially offering 1,100,000 New Shares for subscription by the public in Hong Kongat the Public Offer Price, representing approximately 10% of the total number of Offer Sharesinitially available under the Global Offering. The number of Offer Shares initially offeredunder the Hong Kong Public Offering, subject to any reallocation of Offer Shares between theInternational Offering and the Hong Kong Public Offering, will represent approximately 0.5%of the total Shares in issue immediately following the completion of the Global Offering(assuming the Over-allotment Option is not exercised and without taking into account theShares to be issued pursuant to the Share Incentive Plans including pursuant to the exercise ofshare options or other awards that have been or may be granted from time to time).

The Hong Kong Public Offering is open to members of the public in Hong Kong as well as toinstitutional and professional investors. Professional investors generally include brokers,dealers, companies (including fund managers) whose ordinary business involves dealing inshares and other securities and corporate entities that regularly invest in shares and othersecurities.

Completion of the Hong Kong Public Offering is subject to the conditions set out in“Conditions of the Global Offering” below.

Allocation

Allocation of Offer Shares to investors under the Hong Kong Public Offering will be basedsolely on the level of valid applications received under the Hong Kong Public Offering.

The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validlyapplied for by applicants. Such allocation could, where appropriate, consist of balloting, whichcould mean that some applicants may receive a higher allocation than others who have appliedfor the same number of Hong Kong Offer Shares, and those applicants who are not successfulin the ballot may not receive any Hong Kong Offer Shares.

For allocation purposes only, the total number of Hong Kong Offer Shares available under theHong Kong Public Offering (after taking into account any reallocation referred to below) willbe divided equally (to the nearest board lot) into two pools: pool A and pool B. The Hong KongOffer Shares in pool A will be allocated on an equitable basis to applicants who have appliedfor Hong Kong Offer Shares with an aggregate price of HK$5 million (excluding thebrokerage, the SFC transaction levy and the Hong Kong Stock Exchange trading fee payable)or less. The Hong Kong Offer Shares in pool B will be allocated on an equitable basis toapplicants who have applied for Hong Kong Offer Shares with an aggregate price of more thanHK$5 million (excluding the brokerage, the SFC transaction levy and the Hong Kong StockExchange trading fee payable) and up to the total value in pool B.

Investors should be aware that applications in pool A and applications in pool B may receivedifferent allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the poolsare unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the otherpool to satisfy demand in that other pool and be allocated accordingly. For the purpose of theimmediately preceding paragraph only, the “price” for Hong Kong Offer Shares means theprice payable on application therefor (without regard to the Public Offer Price as finally


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determined). Applicants can only receive an allocation of Hong Kong Offer Shares from eitherpool A or pool B and not from both pools. Multiple or suspected multiple applications underthe Hong Kong Public Offering and any application for more than 550,000 Hong Kong OfferShares is liable to be rejected.

Reallocation

The allocation of the Offer Shares between the Hong Kong Public Offering and theInternational Offering is subject to reallocation. Paragraph 4.2 of Practice Note 18 of theListing Rules requires a clawback mechanism to be put in place which would have the effectof increasing the number of Offer Shares under the Hong Kong Public Offering to a certainpercentage of the total number of Offer Shares offered under the Global Offering if certainprescribed total demand levels are reached.

If the number of Offer Shares validly applied for under the Hong Kong Public Offeringrepresents: (a) 15 times or more but less than 50 times, (b) 50 times or more but less than 100times and (c) 100 times or more of the total number of Offer Shares initially available underthe Hong Kong Public Offering, then Offer Shares will be reallocated to the Hong Kong PublicOffering from the International Offering. As a result of such reallocation, the total number ofOffer Shares available under the Hong Kong Public Offering will be increased to 3,300,000Offer Shares (in the case of (a)), 4,400,000 Offer Shares (in the case of (b)) and 5,500,000Offer Shares (in the case of (c)), representing approximately 30%, 40% and 50% of the totalnumber of Offer Shares initially available under the Global Offering, respectively (before anyexercise of the Over-allotment Option). In each case, the additional Offer Shares reallocatedto the Hong Kong Public Offering will be allocated between pool A and pool B and the numberof Offer Shares allocated to the International Offering will be correspondingly reduced in suchmanner as the Joint Representatives deem appropriate.

In addition, the Joint Representatives may reallocate Offer Shares from the InternationalOffering to the Hong Kong Public Offering to satisfy valid applications under the Hong KongPublic Offering.

If the Hong Kong Public Offering is not fully subscribed, the Joint Representatives mayreallocate all or any unsubscribed Hong Kong Offer Shares to the International Offering, insuch proportions as the Joint Representatives deem appropriate.

The Offer Shares to be offered in the Hong Kong Public Offering and the Offer Shares to beoffered in the International Offering may be reallocated between these offerings at thediscretion of the Joint Representatives, pursuant to the alternative clawback mechanismapplied for to the Hong Kong Stock Exchange as detailed above. In accordance with theGuidance Letter HKEX-GL91-18 issued by the Hong Kong Stock Exchange, if suchreallocation is done other than pursuant to the clawback mechanism above, the maximum totalnumber of Offer Shares that may be reallocated to the Hong Kong Public Offering followingsuch reallocation shall be not more than double the initial allocation to the Hong Kong PublicOffering (i.e., 2,200,000 Shares, representing approximately 20% of the total number of OfferShares initially available under the Global Offering).


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Applications

Each applicant under the Hong Kong Public Offering will be required to give an undertakingand confirmation in the application submitted by him/her that he/she and any person(s) forwhose benefit he/she is making the application has not applied for or taken up, or indicated aninterest for, and will not apply for or take up, or indicate an interest for, any International OfferShares under the International Offering. Such applicant’s application is liable to be rejected ifsuch undertaking and/or confirmation is/are breached and/or untrue (as the case may be) or ifhe/she has been or will be placed or allocated International Offer Shares under the InternationalOffering.

Applicants under the Hong Kong Public Offering are required to pay, on application, themaximum Public Offer Price of HK$388.00 per Offer Share in addition to the brokerage, theSFC transaction levy and the Hong Kong Stock Exchange trading fee payable on each OfferShare, amounting to a total of HK$7,838.20 for one board lot of 20 Shares. If the Public OfferPrice, as finally determined in the manner described in “Pricing and allocation” is less than themaximum Public Offer Price of HK$388.00 per Offer Share, appropriate refund payments(including the brokerage, the SFC transaction levy and the Hong Kong Stock Exchange tradingfee attributable to the surplus application monies) will be made to successful applicants,without interest. Further details are set out in “How to Apply for Hong Kong Offer Shares”.

THE INTERNATIONAL OFFERING

Number of Offer Shares Initially Offered

The International Offering will consist of an offering of initially 9,900,000 Offer Shares(including 5,500,000 Sale Shares), representing approximately 90% of the total number ofOffer Shares initially available under the Global Offering (subject to reallocation and theOver-allotment Option). The number of Offer Shares initially offered under the InternationalOffering, subject to any reallocation of Offer Shares between the International Offering and theHong Kong Public Offering, will represent approximately 4.2% of the total Shares in issueimmediately following the completion of the Global Offering (assuming the Over-allotmentOption is not exercised and without taking into account the Shares to be issued pursuant to theShare Incentive Plans including pursuant to the exercise of share options or other awards thathave been or may be granted from time to time).

Allocation

The International Offering will include U.S. offering of Offer Shares in the United States aswell as non-U.S. offering to institutional and professional and other investors in otherjurisdictions outside the United States. Professional investors generally include brokers,dealers, companies (including fund managers) whose ordinary business involves dealing inshares and other securities and corporate entities that regularly invest in shares and othersecurities. Allocation of Offer Shares pursuant to the International Offering will be effected inaccordance with the “book-building” process described in “Pricing and allocation” and basedon a number of factors, including the level and timing of demand, the total size of the relevantinvestor’s invested assets or equity assets in the relevant sector and whether or not it isexpected that the relevant investor is likely to buy further Shares and/or hold or sell its Sharesafter the Listing. Such allocation is intended to result in a distribution of the Shares on a basiswhich would lead to the establishment of a solid professional and institutional shareholder baseto the benefit of the Group and the Shareholders as a whole.


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The Joint Representatives (for themselves and on behalf of the Underwriters) may require anyinvestor who has been offered Offer Shares under the International Offering and who has madean application under the Hong Kong Public Offering to provide sufficient information to theJoint Representatives so as to allow them to identify the relevant applications under the HongKong Public Offering and to ensure that they are excluded from any allocation of Offer Sharesunder the Hong Kong Public Offering.

Reallocation

The total number of Offer Shares to be issued or sold pursuant to the International Offeringmay change as a result of the clawback arrangement described in “Structure of the GlobalOffering — The Hong Kong Public Offering — Reallocation”, the exercise of the Over-allotment Option in whole or in part and/or any reallocation of unsubscribed Offer Sharesoriginally included in the Hong Kong Public Offering.

Over-allotment Option

In connection with the Global Offering, The Selling Shareholder is expected to grant theOver-allotment Option to the International Underwriters, exercisable by the JointRepresentatives (for themselves and on behalf of the International Underwriters).

Pursuant to the Over-allotment Option, the International Underwriters will have the right,exercisable by the Joint Representatives (for themselves and on behalf of the InternationalUnderwriters) at any time from the Listing Date until 30 days after the last day for lodgingapplications under the Hong Kong Public Offering, to require the Selling Shareholder to sellup to an aggregate of 1,650,000 additional Shares, representing approximately 15% of the totalnumber of Offer Shares initially available under the Global Offering, at the International OfferPrice under the International Offering to cover, among other things, over-allocations in theInternational Offering, if any.

If the Over-allotment Option is exercised in full, the additional Offer Shares to be sold pursuantthereto will represent approximately 0.7% of the total Shares in issue immediately followingthe completion of the Global Offering without taking into account the Shares to be issuedpursuant to the Share Incentive Plans including pursuant to the exercise of share options orother awards that have been or may be granted from time to time. If the Over-allotment Optionis exercised, an announcement will be made.

STABILIZATION

Underwriters use stabilization in some markets to facilitate the distribution of securities. Tostabilize, the underwriters may bid for, or purchase, the securities in the secondary marketduring a specified period of time, to retard and, if possible, prevent a decline in the initialpublic market price of the securities below the offer price. Such transactions may be effectedin all jurisdictions where it is permissible to do so, in each case in compliance with allapplicable laws and regulatory requirements, including those of Hong Kong. In Hong Kong, theprice at which the stabilization is effected is not permitted to exceed the Public Offer Price.

In connection with the Global Offering, the Stabilization Manager (or any person acting for it),on behalf of the Underwriters, may over-allocate or effect transactions with a view tostabilizing or supporting the market price of the Shares at a level higher than that which mightotherwise prevail for a limited period after the Listing Date in the Hong Kong market.


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However, there is no obligation on the Stabilization Manager (or any person acting for it) toconduct any such stabilizing action. Such stabilizing action, if taken: (a) will be conducted atthe absolute discretion of the Stabilization Manager (or any person acting for it) and in whatthe Stabilization Manager reasonably regards as our best interest; (b) may be discontinued atany time; and (c) is required to be brought to an end within 30 days after the last day forlodging applications under the Hong Kong Public Offering. The Company will not, and willcause its affiliates or any of its or its affiliates’ respective directors, officers, employees, or anyperson acting on its behalf or on behalf of any of the foregoing persons not to conduct anystabilizing action.

Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (PriceStabilizing) Rules of the SFO includes: (a) over-allocating for the purpose of preventing orminimizing any reduction in the market price of the Shares; (b) selling or agreeing to sell theShares so as to establish a short position in them for the purpose of preventing or minimizingany reduction in the market price of the Shares; (c) purchasing, or agreeing to purchase, theShares pursuant to the Over-allotment Option in order to close out any position establishedunder Paragraphs (a) or (b) above; (d) purchasing, or agreeing to purchase, any of the Sharesfor the sole purpose of preventing or minimizing any reduction in the market price of theShares; (e) selling or agreeing to sell any Shares in order to liquidate any position establishedas a result of those purchases; and (f) offering or attempting to do anything as described inparagraphs (b), (c), (d) or (e) above.

Specifically, prospective applicants for and investors in the Offer Shares should note that:

(a) the Stabilization Manager (or any person acting for it) may, in connection with thestabilizing action, maintain a long position in the Shares;

(b) there is no certainty as to the extent to which and the time or period for which theStabilization Manager (or any person acting for it) will maintain such a long position;

(c) liquidation of any such long position by the Stabilization Manager (or any person actingfor it) and selling in the open market may have an adverse impact on the market price ofthe Shares;

(d) no stabilizing action can be taken to support the price of the Shares for longer than thestabilization period, which will begin on the Listing Date, and is expected to expire onJanuary 1, 2022, being the 30th day after the last day for lodging applications under theHong Kong Public Offering. After this date, when no further stabilizing action may betaken, demand for the Shares, and therefore the price of the Shares, could fall;

(e) the price of the Shares cannot be assured to stay at or above the Public Offer Price by thetaking of any stabilizing action; and

(f) stabilizing bids or transactions effected in the course of the stabilizing action may bemade at any price at or below the Public Offer Price and can, therefore, be done at a pricebelow the price paid by applicants for, or investors in, the Offer Shares.

We will ensure or procure that an announcement in compliance with the Securities and Futures(Price Stabilizing) Rules of the SFO will be made within seven days of the expiration of thestabilization period.


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In addition, stabilization transactions with respect to the ADSs may be effected by one of theUnderwriters or its affiliates before the listing of the Shares on the Hong Kong Stock Exchangein accordance with applicable laws and regulations.

Over-allocation

Following any over-allocation of Shares in connection with the Global Offering, theStabilization Manager (or any person acting for it) may cover such over-allocations byexercising the Over-allotment Option in full or in part or by using Shares purchased by theStabilization Manager (or any person acting for it) in the secondary market at prices that do notexceed the Public Offer Price or through the Stock Borrowing Agreement as detailed below, orthrough a combination of these means.

Stock Borrowing Agreement

To cover any over-allocation of Shares in connection with the Global Offering, theStabilization Manager may choose to borrow up to 1,650,000 Shares (being the maximumnumber of Shares which may be sold pursuant to the exercise of the Over-allotment Option)from WB Estate, pursuant to the Stock Borrowing Agreement, which is expected to be enteredinto between the Stabilization Manager and WB Estate on or about the Price DeterminationDate.

The same number of Shares so borrowed must be returned to WB Estate, on or before the fifthbusiness day or in the event that the Stabilization Manager conducts stabilizing action bypurchasing ADSs in the U.S. market, the seventh business day, following the earlier of (a) thelast day on which the Over-allotment Option may be exercised and (b) the day on which theOver-allotment Option is exercised in full, or such earlier time as agreed in writing betweenthe Stabilization Manager and WB Estate.

The Shares borrowing arrangement described above will be effected in compliance with allapplicable laws, rules and regulatory requirements in Hong Kong. No payment will be madeto WB Estate by the Stabilization Manager (or any person acting for it) in relation to suchShares borrowing arrangement.

Pricing and allocation

Determining the Offer Price

We will determine the pricing for the Offer Shares for the purpose of the various offeringsunder the Global Offering on the Price Determination Date, which is expected to be on or aboutThursday, December 2, 2021 and, in any event, no later than Friday, December 3, 2021, byagreement with the Joint Representatives (for themselves and on behalf of the Underwriters),and the number of Offer Shares to be allocated under the various offerings will be determinedshortly thereafter.


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We will determine the Public Offer Price by reference to, among other factors, the closing priceof the ADSs on Nasdaq on the last trading day on or before the Price Determination Date, andthe Public Offer Price will not be more than HK$388.00 per Hong Kong Offer Share. Thehistorical prices of our ADSs and trading volume on Nasdaq are set out below.

Period High Low ADTV

US$ US$(millionADSs)(1)

Fiscal year ended December 31, 2020 �� 51.69 29.81 1.67Fiscal year of 2021 (up to the Latest

Practicable Date) �� 62.66 40.58 1.37

Note:

(1) Average daily trading volume (the “ADTV”) represents daily average number of our ADSs traded over therelevant period.

Applicants under the Hong Kong Public Offering must pay, on application, the maximumPublic Offer Price of HK$388.00 per Offer Share plus brokerage of 1.0%, SFC transaction levyof 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%, amounting to a total ofHK$7,838.20 for one board lot of 20 Shares.

We may set the International Offer Price at a level higher than the maximum Public Offer Priceif (a) the Hong Kong dollar equivalent of the closing trading price of the ADSs on Nasdaq onthe last trading day on or before the Price Determination Date (on a per-Share converted basis)were to exceed the maximum Public Offer Price as stated in this document and/or (b) webelieve that it is in its best interest as a listed company to set the International Offer Price ata level higher than the maximum Public Offer Price based on the level of interest expressed byprofessional and institutional investors during the book-building process.

If the International Offer Price is set at or lower than the maximum Public Offer Price, thePublic Offer Price must be set at such price which is equal to the International Offer Price. Inno circumstances will we set the Public Offer Price above the maximum Public Offer Price asstated in this document or the International Offer Price.

We reserve the right not to proceed with the Hong Kong Public Offering or the InternationalOffering on or at any time until the Price Determination Date if, for any reason, including asa result of volatility in the price of our ADSs or other changes in market conditions, we do notagree with the Joint Representatives (for themselves and on behalf of the Underwriters) on thepricing of the Offer Shares by Friday, December 3, 2021.

The International Underwriters will be soliciting from prospective investors’ indications ofinterest in acquiring Offer Shares in the International Offering. Prospective professional andinstitutional investors will be required to specify the number of Offer Shares under theInternational Offering they would be prepared to acquire either at different prices or at aparticular price. This process, known as “book-building,” is expected to continue up to, and tocease on or about, the last day for lodging applications under the Hong Kong Public Offering.


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The Joint Representatives (for themselves and on behalf of the Underwriters) may, where theydeem appropriate, based on the level of interest expressed by prospective investors during thebook-building process in respect of the International Offering, and with our consent, reduce thenumber of Offer Shares offered below as stated in this document at any time on or prior to themorning of the last day for lodging applications under the Hong Kong Public Offering.

In such a case, we will, as soon as practicable following the decision to make such reduction,and in any event not later than the morning of the last day for lodging applications under theHong Kong Public Offering, cause to be published on our website and the website of the HongKong Stock Exchange at http://ir.weibo.com and www.hkexnews.hk, respectively, notices ofthe reduction.

Upon the issue of such a notice, the revised number of Offer Shares will be final. If the numberof Offer Shares is reduced, applicants under the Hong Kong Public Offering will be entitled towithdraw their applications, unless positive confirmations from the applicants to proceed arereceived.

Before submitting applications for the Hong Kong Offer Shares, applicants should have regardto the possibility that any announcement of a reduction in the number of Offer Shares may notbe made until the last day for lodging applications under the Hong Kong Public Offering. Suchnotice will also include confirmation or revision, as appropriate, of the working capitalstatement and the Global Offering statistics as currently set out in this document, and any otherfinancial information which may change as a result of any such reduction. In the absence ofany such notice so published, the number of Offer Shares will not be reduced.

The final pricing of the Offer Shares, the level of indications of interest in the InternationalOffering, the level of applications in the Hong Kong Public Offering, the basis of allocationsof the Hong Kong Offer Shares and the results of allocations in the Hong Kong Public Offeringare expected to be made available through a variety of channels in the manner described in“How to Apply for Hong Kong Offer Shares — D. Publication of Results”.

UNDERWRITING

The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters underthe terms and conditions of the Hong Kong Underwriting Agreement and is subject to, amongother things, our agreeing with the Joint Representatives (for themselves and on behalf of theUnderwriters) on the pricing of the Offer Shares.

We expect to enter into the International Underwriting Agreement relating to the InternationalOffering on the Price Determination Date.

These underwriting arrangements, including the Underwriting Agreements, are summarized in“Underwriting”.


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CONDITIONS OF THE GLOBAL OFFERING

Acceptance of all applications for Offer Shares will be conditional on:

(a) the Hong Kong Stock Exchange granting approval for the listing of, and permission todeal in, the Shares in issue and to be issued or sold pursuant to the Global Offering(including the Shares which may be sold pursuant to the exercise of the Over-allotmentOption) and the Shares to be issued pursuant to the Share Incentive Plans, includingpursuant to the exercise of share options or other awards that have been or may be grantedfrom time to time, on the Main Board of the Hong Kong Stock Exchange and suchapproval not subsequently having been withdrawn or revoked prior to the Listing Date;

(b) the pricing of the Offer Shares having been agreed between the Joint Representatives (forthemselves and on behalf of the Underwriters) and us;

(c) the execution and delivery of the International Underwriting Agreement on or around thePrice Determination Date; and

(d) the obligations of the Hong Kong Underwriters under the Hong Kong UnderwritingAgreement and the obligations of the International Underwriters under the InternationalUnderwriting Agreement becoming and remaining unconditional and not having beenterminated in accordance with the terms of the respective agreements,

in each case on or before the dates and times specified in the respective UnderwritingAgreements (unless and to the extent such conditions are validly waived on or before suchdates and times) and, in any event, not later than the date which is 30 days from the date ofthis document.

If, for any reason, we do not agree with the Joint Representatives (for themselves and on behalfof the Underwriters) on the pricing of the Offer Shares on or before Friday, December 3, 2021,the Global Offering will not proceed and will lapse.

The consummation of each of the Hong Kong Public Offering and the International Offeringis conditional upon, among other things, the other offering becoming unconditional and nothaving been terminated in accordance with its terms.

If the above conditions are not fulfilled or waived prior to the dates and times specified, theGlobal Offering will lapse and the Hong Kong Stock Exchange will be notified immediately.Notice of the lapse of the Hong Kong Public Offering will be published by us on our websiteand the website of the Hong Kong Stock Exchange at http://ir.weibo.com andwww.hkexnews.hk, respectively, on the next day following such lapse. In such a situation, allapplication monies will be returned, without interest, on the terms set out in “How to Applyfor Hong Kong Offer Shares — Refund of application monies”. In the meantime, all applicationmonies will be held in separate bank account(s) with the receiving bank or other bank(s) inHong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).

Share certificates for the Offer Shares will only become valid at 8:00 a.m. on Wednesday,December 8, 2021, provided that the Global Offering has become unconditional in all respectsat or before that time.


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DEALINGS IN THE SHARES

Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.in Hong Kong on Wednesday, December 8, 2021, it is expected that dealings in the Class AShares on the Hong Kong Stock Exchange will commence at 9:00 a.m. on Wednesday,December 8, 2021.

The Class A Shares will be traded in board lots of 20 Class A Shares each and the stock codeof the Shares will be 9898.


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IMPORTANT NOTICE TO INVESTORS:

FULLY ELECTRONIC APPLICATION PROCESS

We have adopted a fully electronic application process for the Hong Kong PublicOffering. We will not provide any printed copies of this document or any printed copiesof any application forms for use by the public.

This document is available at the website of the Hong Kong Stock Exchange atwww.hkexnews.hk under the “HKEXnews > New Listings > New Listing Information”section, and our website at http://ir.weibo.com. If you require a printed copy of thisdocument, you may download and print from the website addresses above.

The contents of the electronic version of the document are identical to the printeddocument as registered with the Registrar of Companies in Hong Kong pursuant toSection 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.

Set out below are procedures through which you can apply for the Hong Kong OfferShares electronically. We will not provide any physical channels to accept anyapplication for the Hong Kong Offer Shares by the public.

If you are an intermediary, broker or agent, please remind your customers, clients orprincipals, as applicable, that this document is available online at the website addressesabove.

A. APPLICATIONS FOR THE HONG KONG OFFER SHARES

1. How to Apply

We will not provide any printed application forms for use by the public.

To apply for the Hong Kong Offer Shares, you may:

(1) apply online through the White Form eIPO service at www.eipo.com.hk; or

(2) apply through CCASS EIPO service to electronically cause HKSCC Nominees toapply on your behalf, including by:

(a) instructing your broker or custodian who is a CCASS Clearing Participant ora CCASS Custodian Participant to give electronic application instructionsvia CCASS terminals to apply for the Hong Kong Offer Shares on your behalf;or

HOW TO APPLY FOR HONG KONG OFFER SHARES

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(b) (if you are an existing CCASS Investor Participant) giving electronicapplication instructions through the CCASS Internet System(https://ip.ccass.com) or through the CCASS Phone System by calling +8522979 7888 (using the procedures in HKSCC’s “An Operating Guide forInvestor Participants” in effect from time to time). HKSCC can also inputelectronic application instructions for CCASS Investor Participants throughHKSCC’s Customer Service Centre at 1/F, One & Two Exchange Square,8 Connaught Place, Central, Hong Kong by completing an input request.

If you apply through channel (1) above, the Hong Kong Offer Shares successfully applied forwill be issued in your own name.

If you apply through channels (2)(a) or (2)(b) above, the Hong Kong Offer Shares successfullyapplied for will be issued in the name of HKSCC Nominees and deposited directly into CCASSto be credited to your or a designated CCASS Participant’s stock account.

None of you or your joint applicant(s) may make more than one application, except where youare a nominee and provide the required information in your application.

We, the Joint Representatives, the White Form eIPO Service Provider and their respectiveagents may reject or accept any application, in full or in part, for any reason at their discretion.

2. Who can Apply

Eligibility for the Application

You can apply for the Hong Kong Offer Shares if you or any person(s) for whose benefit youare applying:

(a) are 18 years of age or older; and

(b) have a Hong Kong address.

If an application is made by a person under a power of attorney, we and the JointRepresentatives may accept it at their discretion, and on any conditions we think fit, includingrequiring evidence of the attorney’s authority.

The number of joint applicants may not exceed four and they may not apply by means of theWhite Form eIPO service for the Hong Kong Offer Shares.

Unless permitted by the Listing Rules or any relevant waivers that have been granted by theHong Kong Stock Exchange (details of the relevant waivers are set out in “Waivers andExemptions”, you cannot apply for any Hong Kong Offer Shares if:

(a) you are an existing beneficial owner of Shares and/or a substantial shareholder ofany of the Company’s subsidiaries;

(b) you are the Company’s director or chief executive and/or a director or chiefexecutive officer of its subsidiaries;


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(c) you are a close associate of any of the above persons;

(d) you are a core connected person of the Company or a person who will become a coreconnected person of the Company immediately upon the completion of the GlobalOffering; or

(e) you have been allocated or have applied for any International Offer Shares orotherwise participate in the International Offering.

Items Required for the Application

If you apply for the Hong Kong Offer Shares online through the White Form eIPO service,you must:

(a) have a valid Hong Kong identity card number; and

(b) provide a valid e-mail address and a contact telephone number.

If you are applying for the Hong Kong Offer Shares online by instructing your broker orcustodian who is a CCASS Clearing Participant or a CCASS Custodian Participant to giveelectronic application instructions via CCASS terminals, please contact them for the itemsrequired for the application.

3. Terms and Conditions of an Application

By applying through the application channels specified in this document you:

(a) undertake to execute all relevant documents and instruct and authorize the Companyand/or the Joint Representatives (or their agents or nominees), as their agents, to executeany documents for you and to do on your behalf all things necessary to register any HongKong Offer Shares allocated to you in your name or in the name of HKSCC Nominees asrequired by the Articles of Association;

(b) agree to comply with the Company’s Memorandum and Articles of Association, theCompanies (Winding Up and Miscellaneous Provisions) Ordinance and the CaymanCompanies Act;

(c) confirm that you have read the terms and conditions and application procedures set outin this document and agree to be bound by them;

(d) confirm that you have received and read this document and have relied only on theinformation and representations in this document in making your application and will notrely on any other information or representations, except those in any supplement to thisdocument;

(e) confirm that you are aware of the restrictions on the Global Offering set out in thisdocument;

(f) agree that none of the Company, the Relevant Persons and the White Form eIPO ServiceProvider is or will be liable for any information and representations not in this document(and any supplement to this document);


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(g) undertake and confirm that you or the person(s) for whose benefit you have made theapplication have not applied for or taken up, or indicated an interest for, and will notapply for or take up, or indicate an interest for, any International Offer Shares norparticipated in the International Offering;

(h) agree to disclose to the Company, the Hong Kong Share Registrar, the receiving bank andthe Relevant Persons any personal data that any of them may require about you and theperson(s) for whose benefit you have made the application;

(i) if the laws of any place outside Hong Kong apply to your application, agree and warrantthat you have complied with all such laws and neither the Company nor the RelevantPersons will breach any laws outside Hong Kong as a result of the acceptance of youroffer to purchase, or any action arising from your rights and obligations under the termsand conditions in this document;

(j) agree that once your application has been accepted, you may not rescind it because of aninnocent misrepresentation;

(k) agree that your application, any acceptance of it and the resulting contract will begoverned by, and construed in accordance with the laws of Hong Kong;

(l) warrant that the information you have provided is true and accurate;

(m) agree to accept the Hong Kong Offer Shares applied for or any lesser number allocatedto you under the application;

(n) authorize (i) the Company to place your name(s) or the name of HKSCC Nominees on theCompany’s register of members as the holder(s) of any Hong Kong Offer Shares allocatedto you and such other registers as required under the Company’s Memorandum andArticles of Association and (ii) the Company and/or its agents to send any Sharecertificate(s) and/or any e-Refund payment instructions and/or any refund check(s) to youor the first-named applicant for joint applications by ordinary post at your own risk to theaddress stated on the application, unless you have fulfilled the criteria mentioned in “—Personal Collection” below to collect the Share certificate(s) and/or refund check(s) inperson;

(o) declare and represent that this is the only application made and the only applicationintended by you to be made to benefit you or the person for whose benefit you areapplying;

(p) understand that the Company, its directors and the Joint Representatives will rely on yourdeclarations and representations in deciding whether or not to allocate any of the HongKong Offer Shares to you and that you may be prosecuted for making a false declaration;

(q) (if the application is made for your own benefit) warrant that no other application hasbeen or will be made for your benefit by giving electronic application instructions toHKSCC directly or indirectly or through the White Form eIPO service or by any one asyour agent or by any other person; and


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(r) (if you are making the application as an agent for the benefit of another person) warrantthat (i) no other application has been or will be made by you as agent for or for the benefitof that person or by that person or by any other person as agent for that person by givingelectronic application instructions to HKSCC and (ii) you have due authority to giveelectronic application instructions on behalf of that other person as its agent.

For the avoidance of doubt, the Company and all other parties involved in the preparation ofthis document acknowledge that each applicant and CCASS Participant who gives or causes togive electronic application instructions is a person who may be entitled to compensationunder Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (asapplied by Section 342E of the Companies (Winding Up and Miscellaneous Provisions)Ordinance).

4. Minimum Application Amount and Permitted Numbers

Your application through the White Form eIPO service or the CCASS EIPO service must befor a minimum of 20 Hong Kong Offer Shares and in one of the numbers set out in the table.You are required to pay the amount next to the number you select.


Sharesapplied for


HK$


Sharesapplied for


HK$


Sharesapplied for


HK$


Sharesapplied for


HK$

20 7,838.20 400 156,763.95 6,000 2,351,459.26 80,000 31,352,790.0840 15,676.40 500 195,954.94 7,000 2,743,369.13 90,000 35,271,888.8460 23,514.59 600 235,145.93 8,000 3,135,279.01 100,000 39,190,987.6080 31,352.79 700 274,336.91 9,000 3,527,188.88 200,000 78,381,975.20

100 39,190.99 800 313,527.90 10,000 3,919,098.76 300,000 117,572,962.80120 47,029.19 900 352,718.89 20,000 7,838,197.52 400,000 156,763,950.40140 54,867.39 1,000 391,909.88 30,000 11,757,296.28 500,000 195,954,938.00160 62,705.58 2,000 783,819.75 40,000 15,676,395.04 550,000(1) 215,550,431.80180 70,543.78 3,000 1,175,729.63 50,000 19,595,493.80200 78,381.98 4,000 1,567,639.50 60,000 23,514,592.56300 117,572.96 5,000 1,959,549.38 70,000 27,433,691.32

Note:

(1) Maximum number of Hong Kong Offer Shares you may apply for.

No application for any other number of the Hong Kong Offer Shares will be considered and anysuch application is liable to be rejected.


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5. Applying through the White Form eIPO Service

General

Individuals who meet the criteria in “— Who can Apply” above may apply through the WhiteForm eIPO service for the Offer Shares to be allocated and registered in their own namesthrough the designated website at www.eipo.com.hk.

Detailed instructions for application through the White Form eIPO service are set out on thedesignated website. If you do not follow the instructions, your application may be rejected andmay not be submitted to the Company. If you apply through the designated website, youauthorize the White Form eIPO Service Provider to apply on the terms and conditions in thisdocument, as supplemented and amended by the terms and conditions of the White Form eIPOService Provider.

Time for Submitting Applications under the White Form eIPO Service

You may submit your application through the White Form eIPO service through thedesignated website at www.eipo.com.hk (24 hours daily, except on the last day forapplications) from 9:00 a.m. on Monday, November 29, 2021 until 11:30 a.m. on Thursday,December 2, 2021 and the latest time for completing full payment of application monies inrespect of such applications will be 12:00 noon on Thursday, December 2, 2021, the last dayfor applications, or such later time as described in “Effect of Bad Weather and ExtremeConditions on the Opening and Closing of the Application Lists” below.

No Multiple Applications

If you apply by means of the White Form eIPO service, once you complete payment in respectof any electronic application instruction given by you or for your benefit through the WhiteForm eIPO service to make an application for Hong Kong Offer Shares, an actual applicationshall be deemed to have been made. For the avoidance of doubt, giving an electronicapplication instruction under the White Form eIPO service more than once and obtainingdifferent application reference numbers without effecting full payment in respect of a particularreference number will not constitute an actual application. If you are suspected of submittingmore than one application through the White Form eIPO service or by any other means, allof your applications are liable to be rejected.


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Commitment to Sustainability

The obvious advantage of White Form eIPO service is to save the use of paper via theself-serviced and electronic application process. Computershare Hong Kong Investor ServicesLimited, being the designated White Form eIPO Service Provider, will contribute HK$2 foreach “WEIBO Corporation” White Form eIPO application submitted via www.eipo.com.hkto support sustainability.

6. Applying through CCASS EIPO Service

General

CCASS Participants may give electronic application instructions to apply for the Hong KongOffer Shares and to arrange payment of the money due on application and payment of refundsunder their participant agreements with HKSCC and the General Rules of CCASS and theCCASS Operational Procedures.

If you are a CCASS Investor Participant, you may give these electronic applicationinstructions through the CCASS Internet System (https://ip.ccass.com) or through theCCASS Phone System by calling +852 2979 7888 (using the procedures in HKSCC’s “AnOperating Guide for Investor Participants” in effect from time to time).

HKSCC can also input electronic application instructions for CCASS Investor Participantsthrough HKSCC’s Customer Service Centre at 1/F, One & Two Exchange Square, 8 ConnaughtPlace, Central, Hong Kong by completing an input request.

If you are not a CCASS Investor Participant, you may instruct your broker or custodian whois a CCASS Clearing Participant or a CCASS Custodian Participant to give electronicapplication instructions via CCASS terminals to apply for the Hong Kong Offer Shares on yourbehalf.

You will be deemed to have authorized HKSCC and/or HKSCC Nominees to transfer thedetails of your application to the Company, the Joint Sponsors, the Joint Representatives andthe Hong Kong Share Registrar.

Applying through CCASS EIPO Service

Where you have applied through CCASS EIPO service (either indirectly through a broker orcustodian or directly) and an application is made by HKSCC Nominees on your behalf:

(a) HKSCC Nominees will only be acting as a nominee for you and is not liable for anybreach of the terms and conditions of this document; and

(b) HKSCC Nominees will do the following things on your behalf:

• agree that the Hong Kong Offer Shares to be allocated shall be registered in thename of HKSCC Nominees and deposited directly into CCASS for the credit of theCCASS Participant’s stock account on your behalf or your CCASS InvestorParticipant’s stock account;

• agree to accept the Hong Kong Offer Shares applied for or any lesser numberallocated;

• undertake and confirm that you have not applied for or taken up, or indicated aninterest for, and will not apply for or take up, or indicate an interest for, anyInternational Offer Shares nor participated in the International Offering;


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• (if the electronic application instructions are given for your benefit) declare thatonly one set of electronic application instructions has been given for your benefit;

• (if you are an agent for another person) declare that you have only given one set ofelectronic application instructions for the other person’s benefit and are dulyauthorized to give those instructions as its agent;

• confirm that you understand that the Company, its directors and the JointRepresentatives will rely on your declarations and representations in decidingwhether or not to allocate any of the Hong Kong Offer Shares to you and that youmay be prosecuted for making a false declaration;

• authorize the Company to place HKSCC Nominees’ name on its register of membersas the holder of the Hong Kong Offer Shares allocated to you, and despatch Sharecertificate(s) and/or refund monies in accordance with the arrangements separatelyagreed between the Company and HKSCC;

• confirm that you have read the terms and conditions and application procedures setout in this document and agree to be bound by them;

• confirm that you have received and read this document and have relied only on theinformation and representations in this document in causing the application to bemade and will not rely on any other information or representations, except those inany supplement to this document;

• agree that neither the Company nor any of the Relevant Persons is or will be liablefor any information and representations not in this document (and any supplementto this document);

• agree to disclose to the Company, the Hong Kong Share Registrar, the receivingbank and the Relevant Persons any personal data which they may require about you;

• agree (without prejudice to any other rights which you may have) that once HKSCCNominees’ application has been accepted, it cannot be rescinded for innocentmisrepresentation;

• agree that any application made by HKSCC Nominees on your behalf is irrevocableon or before the fifth day after the time of the opening of the application lists(excluding any days which is a Saturday, Sunday or public holiday in Hong Kong),such agreement to take effect as a collateral contract with the Company, and tobecome binding when you give the instructions and such collateral contract to be inconsideration of the Company’s agreement that it will not offer any Hong KongOffer Shares to any person on or before the fifth day after the time of the openingof the application lists (excluding any days which is a Saturday, Sunday or publicholiday in Hong Kong) except by means of one of the procedures referred to in thisdocument. However, HKSCC Nominees may revoke the application on or before thefifth day after the time of the opening of the application lists (excluding any dayswhich is a Saturday, Sunday or public holiday in Hong Kong) if a person responsiblefor this document under Section 40 of the Companies (WUMP) Ordinance (asapplied by Section 342E of the Companies (WUMP) Ordinance) gives a publicnotice under that section on or before the fifth day after the time of the opening ofthe application lists (excluding any day which is a Saturday, Sunday or publicholiday in Hong Kong) which excludes or limits that person’s responsibility for thisdocument;


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• agree that once HKSCC Nominees’ application is accepted, neither that applicationnor your electronic application instructions can be revoked, and that acceptance ofthat application will be evidenced by the Company’s announcement of the results ofthe Hong Kong Public Offering;

• agree to the arrangements, undertakings and warranties under the participantagreement between you and HKSCC, read with the General Rules of CCASS and theCCASS Operational Procedures, for giving electronic application instructions toapply for the Hong Kong Offer Shares;

• agree with the Company, for itself and for the benefit of each shareholder (and sothat the Company will be deemed by its acceptance in whole or in part of theapplication by HKSCC Nominees to have agreed, for the Company and on behalf ofeach shareholder, with each CCASS Participant giving electronic applicationinstructions) to observe and comply with its Memorandum and Articles ofAssociation, the Companies (WUMP) Ordinance and the Cayman Companies Act;and

• agree that your application, any acceptance of it and the resulting contract will begoverned by, and construed in accordance with the laws of Hong Kong.

Effect of Applying through CCASS EIPO Service

By applying through CCASS EIPO service, you (and, if you are joint applicants, each of youjointly and severally) are deemed to have done the following things. Neither HKSCC norHKSCC Nominees will be liable to the Company or any other person in respect of the thingsmentioned below:

(a) instructed and authorized HKSCC to cause HKSCC Nominees (acting as nominee for therelevant CCASS Participants) to apply for the Hong Kong Offer Shares on your behalf;

(b) instructed and authorized HKSCC to arrange payment of the maximum Public OfferPrice, brokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee bydebiting your designated bank account and, in the case of a wholly or partiallyunsuccessful application and/or if the Public Offer Price is less than the maximum PublicOffer Price initially paid on application, refund of the application monies (includingbrokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee) by creditingyour designated bank account; and

(c) instructed and authorized HKSCC to cause HKSCC Nominees to do on your behalf all thethings stated in this document.

Time for Inputting Electronic Application Instructions(1)

CCASS Clearing/Custodian Participants can input electronic application instructions at thefollowing times on the following dates:

Monday, November 29, 2021 — 9:00 a.m. to 8:30 p.m.Tuesday, November 30, 2021 — 8:00 a.m. to 8:30 p.m.

Wednesday, December 1, 2021 — 8:00 a.m. to 8:30 p.m.Thursday, December 2, 2021 — 8:00 a.m. to 12:00 noon


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CCASS Investor Participants can input electronic application instructions from 9:00 a.m. onMonday, November 29, 2021 until 12:00 noon on Thursday, December 2, 2021 (24 hours daily,except on Thursday, December 2, 2021, the last day for applications).

The latest time for inputting your electronic application instructions will be 12:00 noon onThursday, December 2, 2021, the last day for applications, or such later time as described in“Effect of Bad Weather and Extreme Conditions on the Opening and Closing of the ApplicationLists” below.

If you are instructing your broker or custodian who is a CCASS Clearing Participant or aCCASS Custodian Participant to give electronic application instructions via CCASSterminals to apply for the Hong Kong Offer Shares on your behalf, you are advised to contactyour broker or custodian for the latest time for giving such instructions which may bedifferent from the latest time as stated above.

Note:

(1) The times in this subsection are subject to change as HKSCC may determine from time to time with priornotification to CCASS Clearing Participants, CCASS Custodian Participants and/or CCASS InvestorParticipants.

Personal Data

The following Personal Information Collection Statement applies to any personal data held bythe Company, the Hong Kong Share Registrar, the receiving bank and the Relevant Personsabout you in the same way as it applies to personal data about applicants other than HKSCCNominees. By applying through CCASS EIPO service, you agree to all of the terms of thePersonal Information Collection Statement below.

Personal Information Collection Statement

This Personal Information Collection Statement informs applicant for, and holder of, the HongKong Offer Shares, of the policies and practices of the Company and its Hong Kong ShareRegistrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486of the Laws of Hong Kong).

Reasons for the Collection of your Personal Data

It is necessary for applicants and registered holders of the Hong Kong Offer Shares to supplycorrect personal data to the Company or its agents and the Hong Kong Share Registrar whenapplying for the Hong Kong Offer Shares or transferring the Hong Kong Offer Shares into orout of their names or in procuring the services of the Hong Kong Share Registrar.

Failure to supply the requested data may result in your application for the Hong Kong OfferShares being rejected, or in delay or the inability of the Company or its Hong Kong ShareRegistrar to effect transfers or otherwise render their services. It may also prevent or delayregistration or transfers of the Hong Kong Offer Shares which you have successfully appliedfor and/or the despatch of share certificate(s) to which you are entitled.

It is important that the holders of the Hong Kong Offer Shares inform the Company and theHong Kong Share Registrar immediately of any inaccuracies in the personal data supplied.


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Purposes

Your personal data may be used, held, processed, and/or stored (by whatever means) for thefollowing purposes:

(a) processing your application and refund check, where applicable, verification ofcompliance with the terms and application procedures set out in this document andannouncing results of allocation of the Hong Kong Offer Shares;

(b) compliance with applicable laws and regulations in Hong Kong and elsewhere;

(c) registering new issues or transfers into or out of the names of the holders of theCompany’s Shares including, where applicable, HKSCC Nominees;

(d) maintaining or updating the Company’s register of members;

(e) verifying identities of the holders of the Company’s Shares;

(f) establishing benefit entitlements of holders of the Company’s Shares, such as dividends,rights issues, bonus issues, etc.;

(g) distributing communications from the Company and its subsidiaries;

(h) compiling statistical information and profiles of the holder of the Company’s Shares;

(i) disclosing relevant information to facilitate claims on entitlements; and

(j) any other incidental or associated purposes relating to the above and/or to enable theCompany and the Hong Kong Share Registrar to discharge their obligations to holders ofthe Company’s Shares and/or regulators and/or any other purposes to which thesecurities’ holders may from time to time agree.

Transfer of Personal Data

Personal data held by the Company and its Hong Kong Share Registrar relating to the holdersof the Hong Kong Offer Shares will be kept confidential but the Company and its Hong KongShare Registrar may, to the extent necessary for achieving any of the above purposes, disclose,obtain or transfer (whether within or outside Hong Kong) the personal data to, from or with anyof the following:

(a) the Company’s appointed agents such as financial advisers, receiving bankers andoverseas principal share registrar;

(b) where applicants for the Hong Kong Offer Shares request a deposit into CCASS, HKSCCor HKSCC Nominees, who will use the personal data for the purposes of operatingCCASS;

(c) any agents, contractors or third-party service providers who offer administrative,telecommunications, computer, payment or other services to the Company or the HongKong Share Registrar in connection with their respective business operation;

(d) the Hong Kong Stock Exchange, the SFC and any other statutory regulatory orgovernmental bodies or otherwise as required by laws, rules or regulations; and


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(e) any persons or institutions with which the holders of the Hong Kong Offer Shares haveor propose to have dealings, such as their bankers, solicitors, accountants or stockbrokersetc.

Retention of Personal Data

The Company and its Hong Kong Share Registrar will keep the personal data of the applicantsand holders of the Hong Kong Offer Shares for as long as necessary to fulfil the purposes forwhich the personal data were collected. Personal data which is no longer required will bedestroyed or dealt with in accordance with the Personal Data (Privacy) Ordinance.

Access to and Correction of Personal Data

Holders of the Hong Kong Offer Shares have the right to ascertain whether the Company or theHong Kong Share Registrar hold their personal data, to obtain a copy of that data, and tocorrect any data that is inaccurate. The Company and the Hong Kong Share Registrar have theright to charge a reasonable fee for the processing of such requests. All requests for access todata or correction of data should be addressed to the Company, at the Company’s registeredaddress disclosed in “Corporate Information” or as notified from time to time, for the attentionof the secretary, or the Company’s Hong Kong Share Registrar for the attention of the privacycompliance officer.

7. Warning for Electronic Applications

The application for the Hong Kong Offer Shares by CCASS EIPO service (directly orindirectly through your broker or custodian) is only a facility provided to CCASSParticipants. Similarly, the application for the Hong Kong Offer Shares through the WhiteForm eIPO service is only a facility provided by the White Form eIPO Service Provider topublic investors. Such facilities are subject to capacity limitations and potential serviceinterruptions and you are advised not to wait until the last day for applications to make yourelectronic application. The Company, the Relevant Persons, the White Form eIPO ServiceProvider take no responsibility for such applications and provide no assurance that any CCASSParticipant applying through CCASS EIPO service or person applying through the WhiteForm eIPO service will be allocated any Hong Kong Offer Shares.

To ensure that CCASS Investor Participants can give their electronic application instructions,they are advised not to wait until the last minute to input their instructions to the systems. Inthe event that CCASS Investor Participants have problems in the connection to CCASS PhoneSystem/CCASS internet System for submission of electronic application instructions, theyshould go to HKSCC’s Customer Service Centre to complete an input request form forelectronic application instructions before 12:00 noon on Thursday, December 2, 2021.

8. How many applications can you make

Multiple applications for the Hong Kong Offer Shares are not allowed except by nominees.

All of your applications will be rejected if more than one application through the CCASSEIPO service (directly or indirectly through your broker or custodian) or through the WhiteForm eIPO service is made for your benefit (including the part of the application made byHKSCC Nominees acting on electronic application instructions), and the number of HongKong Offer Shares applied by HKSCC Nominees will be automatically reduced by the numberof Hong Kong Offer Shares for which you have given such instructions and/or for which suchinstructions have been given for your behalf.


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For the avoidance of doubt, giving an electronic application instruction under the WhiteForm eIPO service more than once and obtaining different application reference numberswithout effecting full payment in respect of a particular reference number will not constitutean actual application. However, any electronic application instructions to make anapplication for the Hong Kong Offer Shares given by you or for your behalf to HKSCC willbe deemed to be an actual application for the purposes of considering whether multipleapplications have been made.

If an unlisted company makes an application and:

(a) the principal business of that company is dealing in securities; and

(b) you exercise statutory control over that company,

then the application will be treated as being made for your benefit.

“Unlisted company” means a company with no equity securities listed on the Hong KongStock Exchange.

“Statutory control” means you:

(a) control the composition of the board of directors of the company;

(b) control more than half of the voting power of the company; or

(c) hold more than half of the issued share capital of the company (not counting any part ofit which carries no right to participate beyond a specified amount in a distribution ofeither profits or capital).

B. HOW MUCH ARE THE HONG KONG OFFER SHARES

The maximum Public Offer Price is HK$388.00 per Offer Share. You must also pay brokerageof 1.0%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of0.005%. This means that for one board lot of 20 Hong Kong Offer Shares, you will pay HK$7,838.20.

You must pay the maximum Public Offer Price, together with brokerage, SFC transaction levyand Hong Kong Stock Exchange trading fee, in full upon application for the Hong Kong OfferShares.

You may submit an application through the White Form eIPO service or the CCASS EIPOservice in respect of a minimum of 20 Hong Kong Offer Shares. If you make an electronicapplication instruction for more than 20 Hong Kong Offer Shares, the number of Hong KongOffer Shares you apply for must be in one of the specified numbers set out in “How To Applyfor Hong Kong Offer Shares — A. Applications for the Hong Kong Offer Shares — 4.Minimum application amount and permitted numbers”.

If your application is successful, brokerage will be paid to the Exchange Participants (asdefined in the Listing Rules), and the SFC transaction levy and the Hong Kong Stock Exchangetrading fee will be paid to the Hong Kong Stock Exchange (in the case of the SFC transactionlevy, collected by the Hong Kong Stock Exchange on behalf of the SFC).

For further details on the Public Offer Price, see “Structure of the Global Offering — Pricingand Allocation”.


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C. EFFECT OF BAD WEATHER AND EXTREME CONDITIONS ON THE OPENINGAND CLOSING OF THE APPLICATION LISTS

The application lists will not open or close if there is/are:

• a tropical cyclone warning signal number 8 or above;

• a “black” rainstorm warning; and/or

• Extreme Conditions

in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, December2, 2021. Instead, they will open between 11:45 a.m. and 12:00 noon on the next business daywhich does not have any of those warnings or Extreme Conditions in force in Hong Kong atany time between 9:00 a.m. and 12:00 noon.

If the application lists do not open and close on Thursday, December 2, 2021 or if there is/area tropical cyclone warning signal number 8 or above, a “black” rainstorm warning signal and/orExtreme Conditions in force in Hong Kong that may affect the dates mentioned in “ExpectedTimetable,” the Company will make an announcement on its website at http://ir.weibo.comand the website of the Hong Kong Stock Exchange at www.hkexnews.hk.

D. PUBLICATION OF RESULTS

The Company expects to announce the pricing of the Offer Shares on Thursday, December 2,2021 on its website at http://ir.weibo.com and on the website of the Hong Kong StockExchange at www.hkexnews.hk.

The Company expects to announce the level of indications of interest in the InternationalOffering, the level of applications in the Hong Kong Public Offering and the basis ofallocations of the Hong Kong Offer Shares on Tuesday, December 7, 2021 on its website athttp://ir.weibo.com and the website of the Hong Kong Stock Exchange at www.hkexnews.hk.

The results of allocations and the Hong Kong identity card/passport/Hong Kong businessregistration numbers of successful applicants under the Hong Kong Public Offering will beavailable at the times and dates and in the manner set out below:

(a) in the announcement to be posted on the Company’s website and the website of the HongKong Stock Exchange at http://ir.weibo.com and www.hkexnews.hk, respectively, by nolater than Tuesday, December 7, 2021;

(b) from the designated results of allocations website at www.iporesults.com.hk(alternatively: English https://www.eipo.com.hk/en/Allotment; Chinesehttps://www.eipo.com.hk/zh-hk/Allotment) with a “search by ID function” on a 24 hourbasis from 8:00 a.m. on Tuesday, December 7, 2021 to 12:00 midnight on Monday,December 13, 2021; and

(c) from the allocation results telephone enquiry line by calling +852 2862 8555 between9:00 a.m. and 6:00 p.m. from Tuesday, December 7, 2021 to Friday, December 10, 2021.


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If the Company accepts your offer to purchase (in whole or in part), which the Company maydo by announcing the basis of allocations and/or making available the results of allocationspublicly, there will be a binding contract under which you will be required to purchase theHong Kong Offer Shares if the conditions of the Global Offering are satisfied and the GlobalOffering is not otherwise terminated. Further details are set out in “Structure of the GlobalOffering.”

You will not be entitled to exercise any remedy of rescission for innocent misrepresentation atany time after acceptance of your application. This does not affect any other right you mayhave.

E. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED THE HONGKONG OFFER SHARES

You should note the following situations in which the Hong Kong Offer Shares will not beallocated to you:

If your Application is Revoked:

By applying through the CCASS EIPO service or through the White Form eIPO service, youagree that your application or the application made by HKSCC Nominees on your behalfcannot be revoked on or before the fifth day after the time of the opening of the applicationlists (excluding any days which is a Saturday, Sunday or public holiday in Hong Kong). Thisagreement will take effect as a collateral contract with the Company.

Your application or the application made by HKSCC Nominees on your behalf may only berevoked on or before the fifth day after the time of the opening of the application lists(excluding any days which is a Saturday, Sunday or public holiday in Hong Kong) in thefollowing circumstances:

(a) if a person responsible for this document under Section 40 of Companies (Winding Upand Miscellaneous Provisions) Ordinance (as applied by Section 342E of the Companies(Winding Up and Miscellaneous Provisions) Ordinance gives a public notice under thatsection on or before the fifth day after the time of the opening of the application lists(excluding any day which is a Saturday, Sunday or public holiday in Hong Kong) whichexcludes or limits that person’s responsibility for this document; or

(b) if any supplement to this document is issued, in which case the Company will notifyapplicants who have already submitted an application that they are required to confirmtheir applications. If applicants have been so notified but have not confirmed theirapplications in accordance with the procedure to be notified, all unconfirmed applicationswill be deemed revoked.

If your application or the application made by HKSCC Nominees on your behalf has beenaccepted, it cannot be revoked. For this purpose, acceptance of applications which are notrejected will be constituted by notification in the press of the results of allocation, and wheresuch basis of allocation is subject to certain conditions or provides for allocation by ballot,such acceptance will be subject to the satisfaction of such conditions or results of the ballot,respectively.


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If the Company or its Agents Exercise their Discretion to Reject your Application:

The Company, the Joint Representatives, the White Form eIPO Service Provider and theirrespective agents or nominees have full discretion to reject or accept any application, or toaccept only part of any application, without giving any reasons.

If:

(a) you make multiple applications or are suspected of making multiple applications;

(b) you or the person for whose benefit you apply for, have applied for or taken up, orindicated an interest for, or have been or will be placed or allocated (includingconditionally and/or provisionally) the Hong Kong Offer Shares and the InternationalOffer Shares;

(c) your payment is not made correctly;

(d) your electronic application instructions through the White Form eIPO service are notcompleted in accordance with the instructions, terms and conditions on the designatedwebsite at www.eipo.com.hk;

(e) you apply for more than 550,000 Hong Kong Offer Shares, being 50% of the 1,100,000Hong Kong Offer Shares initially available under the Hong Kong Public Offering;

(f) the Company or the Joint Representatives believe that by accepting your application, aviolation of applicable securities or other laws, rules or regulations would result; or

(g) the Underwriting Agreements do not become unconditional or are terminated.

F. REFUND OF APPLICATION MONIES

If an application is rejected, not accepted or accepted in part only, or if the Public Offer Priceas finally determined is less than the maximum Public Offer Price per Offer Share (excludingbrokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee payable thereon)paid on application, or if the conditions of the Global Offering as set out in “Structure of theGlobal Offering — Conditions of the Global Offering” are not satisfied or if any applicationis revoked, the application monies, or the appropriate portion thereof, together with the relatedbrokerage, SFC transaction levy and Hong Kong Stock Exchange trading fee, will be refunded,without interest.

Any refund of your application monies will be made on or before Tuesday, December 7, 2021.

G. DESPATCH/COLLECTION OF SHARE CERTIFICATES/e-REFUND PAYMENTINSTRUCTIONS/REFUND CHECKS

You will receive one Share certificate for all Hong Kong Offer Shares allocated to you underthe Hong Kong Public Offering (except pursuant to applications made through the CCASSEIPO service where the Share certificates will be deposited into CCASS as described below).

The Company will not issue temporary document of title in respect of the Offer Shares. TheCompany will not issue receipt for sums paid on application.


– 376 –

Subject to arrangement on despatch/collection of Share certificates and refund checks asmentioned below, any refund checks and Share certificate(s) are expected to be posted on orbefore Tuesday, December 7, 2021. The right is reserved to retain any Share certificate(s) andany surplus application monies pending clearance of check(s) or banker’s cashier order(s).

Share certificates will only become valid at 8:00 a.m. on Wednesday, December 8, 2021,provided that the Global Offering has become unconditional in all respects at or before thattime and the right of termination described in “Underwriting” has not been exercised.

Investors who trade Shares on the basis of publicly available allocation details or prior to thereceipt of the Share certificates or prior to the Share certificates becoming valid do so entirelyat their own risk.

Personal Collection

If you apply through White Form eIPO service:

(a) If you apply for 100,000 Hong Kong Offer Shares or more through the White Form eIPOservice and your application is wholly or partially successful, you may collect your refundcheck(s) and/or Share certificate(s) (where applicable) in person from the Hong KongShare Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, from9:00 a.m. to 1:00 p.m. on Tuesday, December 7, 2021, or any other place or date notifiedby the Company.

(b) If you do not personally collect your refund check(s) and/or Share certificate(s) (whereapplicable) within the time specified for collection, they will be sent to the addressspecified in your application instructions by ordinary post and at your own risk.

(c) If you apply for less than 100,000 Hong Kong Offer Shares through the White FormeIPO service, your refund check(s) and/or Share certificate(s) (where applicable) will besent to the address specified in your application instructions on or before Tuesday,December 7, 2021 by ordinary post and at your own risk.

(d) If you apply and pay the application monies from a single bank account, any refundmonies will be despatched to that bank account in the form of e-Refund paymentinstructions. If you apply and pay the application monies from multiple bank accounts,any refund monies will be despatched to the address specified in your applicationinstructions in the form of refund check(s) by ordinary post and at your own risk.

If you apply through CCASS EIPO service:

Allocation of the Hong Kong Offer Shares

(a) For the purposes of allocating the Hong Kong Offer Shares, HKSCC Nominees will notbe treated as an applicant. Instead, each CCASS Participant who gives electronicapplication instructions or each person for whose benefit instructions are given will betreated as an applicant.


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Deposit of Share Certificates into CCASS and Refund of Application Monies

(a) If your application is wholly or partially successful, your Share certificate(s) will beissued in the name of HKSCC Nominees and deposited into CCASS for the credit of yourdesignated CCASS Participant’s stock account or your CCASS Investor Participant stockaccount on Tuesday, December 7, 2021 or on any other date determined by HKSCC orHKSCC Nominees.

(b) The Company expects to publish the application results of CCASS Participants (andwhere the CCASS Participant is a broker or custodian, the Company will includeinformation relating to the relevant beneficial owner), your Hong Kong identitycard/passport/Hong Kong business registration number or other identification code (HongKong business registration number for corporations) and the basis of allocations of theHong Kong Offer Shares in the manner as described in “— Publication of results” aboveon Tuesday, December 7, 2021. You should check the announcement published by theCompany and report any discrepancies to HKSCC before 5:00 p.m. on Tuesday,December 7, 2021 or such other date as determined by HKSCC or HKSCC Nominees.

(c) If you have instructed your broker or custodian who is a CCASS Clearing Participant ora CCASS Custodian Participant to give electronic application instructions via CCASSterminals to apply for the Hong Kong Offer Shares on your behalf, you can also check thenumber of the Hong Kong Offer Shares allocated to you and the amount of refund monies(if any) payable to you with that broker or custodian.

(d) If you have applied as a CCASS Investor Participant, you can also check the number ofthe Hong Kong Offer Shares allocated to you and the amount of refund monies (if any)payable to you via the CCASS Phone System and the CCASS Internet System (under theprocedures contained in HKSCC’s “An Operating Guide for Investor Participants” ineffect from time to time) on Tuesday, December 7, 2021. Immediately following the creditof the Hong Kong Offer Shares to your stock account and the credit of the refund moniesto your bank account, HKSCC will also make available to you an activity statementshowing the number of the Hong Kong Offer Shares credited to your CCASS InvestorParticipant stock account and the amount of refund monies (if any) credited to yourdesignated bank account.

(e) Refund of your application monies (if any) in respect of wholly and partially unsuccessfulapplications and/or difference between the Public Offer Price and the maximum PublicOffer Price per Offer Share initially paid on application (including brokerage, SFCtransaction levy and Hong Kong Stock Exchange trading fee but without interest) will becredited to your designated bank account or the designated bank account of your brokeror custodian on Tuesday, December 7, 2021.


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H. ADMISSION OF THE CLASS A ORDINARY SHARES INTO CCASS

If the Hong Kong Stock Exchange grants the listing of, and permission to deal in, the Class Aordinary shares and the Company complies with the stock admission requirements of HKSCC,the Class A ordinary shares will be accepted as eligible securities by HKSCC for deposit,clearance and settlement in CCASS with effect from the date of commencement of dealings inthe Class A ordinary shares on the Hong Kong Stock Exchange or any other date HKSCCchooses. Settlement of transactions between Exchange Participants (as defined in the ListingRules) is required to take place in CCASS on the second settlement day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASSOperational Procedures in effect from time to time.

Investors should seek the advice of their stockbroker or other professional adviser for detailsof the settlement arrangements as such arrangements may affect their rights and interests.

The Company has made all necessary arrangements to enable the Class A ordinary shares to beadmitted into CCASS.


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The following is the text of a report set out on pages IA-1 to IA-3, received from the Company’sreporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, forthe purpose of incorporation in this document. It is prepared and addressed to the directors ofthe Company and to the Joint Sponsors pursuant to the requirements of HKSIR 200Accountants’ Reports on Historical Financial Information in Investment Circulars issued bythe Hong Kong Institute of Certified Public Accountants.

ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THEDIRECTORS OF WEIBO CORPORATION AND GOLDMAN SACHS (ASIA) L.L.C.,CREDIT SUISSE (HONG KONG) LIMITED, CLSA CAPITAL MARKETS LIMITEDAND CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONGSECURITIES LIMITED

Introduction

We report on the historical financial information of Weibo Corporation (the “Company”) andits subsidiaries (together, the “Group”) set out on pages IA-4 to IA-81, which comprises theconsolidated balance sheets as at December 31, 2018, 2019 and 2020 and June 30, 2021, andthe consolidated statements of comprehensive income, the consolidated statements ofshareholders’ equity and the consolidated statements of cash flows for each of the years endedDecember 31, 2018, 2019 and 2020 and the six months ended June 30, 2021 (the “Track RecordPeriod”) and a summary of significant accounting policies and other explanatory information(together, the “Historical Financial Information”). The Historical Financial Information set outon pages IA-4 to IA-81 forms an integral part of this report, which has been prepared forinclusion in the prospectus of the Company dated November 29, 2021 (the “Prospectus”) inconnection with the listing of shares of the Company on the Main Board of The StockExchange of Hong Kong Limited.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of Historical FinancialInformation that gives a true and fair view in accordance with the basis of presentation set outin Note 2 to the Historical Financial Information, and for such internal control as the directorsdetermine is necessary to enable the preparation of Historical Financial Information that is freefrom material misstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to reportour opinion to you. We conducted our work in accordance with Hong Kong Standard onInvestment Circular Reporting Engagements 200, Accountants’ Reports on HistoricalFinancial Information in Investment Circulars issued by the Hong Kong Institute of CertifiedPublic Accountants (“HKICPA”). This standard requires that we comply with ethical standardsand plan and perform our work to obtain reasonable assurance about whether the HistoricalFinancial Information is free from material misstatement.

APPENDIX IA ACCOUNTANT’S REPORT

– IA-1 –

Our work involved performing procedures to obtain evidence about the amounts anddisclosures in the Historical Financial Information. The procedures selected depend on thereporting accountant’s judgement, including the assessment of risks of material misstatementof the Historical Financial Information, whether due to fraud or error. In making those riskassessments, the reporting accountant considers internal control relevant to the entity’spreparation of Historical Financial Information that gives a true and fair view in accordancewith the basis of presentation set out in Note 2 to the Historical Financial Information in orderto design procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity’s internal control. Our work alsoincluded evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by the directors, as well as evaluating the overall presentation ofthe Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountant’sreport, a true and fair view of the consolidated financial position of the Group as at December31, 2018, 2019 and 2020 and June 30, 2021 and of its consolidated financial performance andits consolidated cash flows for the Track Record Period in accordance with the basis ofpresentation set out in Note 2 to the Historical Financial Information.

Review of stub period comparative financial information

We have reviewed the stub period comparative financial information of the Group whichcomprises the consolidated statement of comprehensive income, the consolidated statement ofshareholders’ equity and the consolidated statement of cash flows for the six months endedJune 30, 2020 and other explanatory information (the “Stub Period Comparative FinancialInformation”). The directors of the Company are responsible for the presentation andpreparation of the Stub Period Comparative Financial Information in accordance with the basisof presentation set out in Note 2 to the Historical Financial Information. Our responsibility isto express a conclusion on the Stub Period Comparative Financial Information based on ourreview. We conducted our review in accordance with Hong Kong Standard on ReviewEngagements 2410, Review of Interim Financial Information Performed by the IndependentAuditor of the Entity issued by the HKICPA. A review consists of making inquiries, primarilyof persons responsible for financial and accounting matters, and applying analytical and otherreview procedures. A review is substantially less in scope than an audit conducted inaccordance with Hong Kong Standards on Auditing and consequently does not enable us toobtain assurance that we would become aware of all significant matters that might be identifiedin an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing hascome to our attention that causes us to believe that the Stub Period Comparative FinancialInformation, for the purposes of the accountant’s report, is not prepared, in all materialrespects, in accordance with the basis of presentation set out in Note 2 to the HistoricalFinancial Information.


– IA-2 –

Report on matters under the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited (the “Listing Rules”) and the Companies (Winding Upand Miscellaneous Provisions) Ordinance

Adjustments

In preparing the Historical Financial Information, no adjustments to the Historical FinancialStatements as defined on page IA-4 have been made.

Dividends

No dividends have been paid by Weibo Corporation in respect of the Track Record Period.

PricewaterhouseCoopersCertified Public AccountantsHong KongNovember 29, 2021


– IA-3 –

I HISTORICAL FINANCIAL INFORMATION OF THE GROUP

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of thisaccountant’s report.

The Historical Financial Information in this report was prepared by the directors of theCompany based on the consolidated financial statements of the Group for the years endedDecember 31, 2018, 2019 and 2020 and for the six months ended June 30, 2021 (collectivelyreferred as “Historical Financial Statements”). The consolidated financial statements for theyears ended December 31, 2018, 2019 and 2020 were audited by PricewaterhouseCoopersZhong Tian LLP, PRC, in accordance with the standards of the Public Company AccountingOversight Board (United States) (“PCAOB”) relating to the financial statements and theeffectiveness of internal control over financial reporting. The financial statements for the sixmonths ended June 30, 2021 were audited by PricewaterhouseCoopers Zhong Tian LLP, PRC,in accordance with the standards of PCAOB relating to the financial statements only.

The Historical Financial Information is presented in United States Dollars. All values arerounded to the nearest thousand except when otherwise indicated.


– IA-4 –

CONSOLIDATED BALANCE SHEETS(In thousands of U.S. dollars, except for par value)


June 30,Notes 2018 2019 2020 2021

ASSETSCurrent assets:

Cash and cash equivalents 3 $1,234,596 $1,452,985 $1,814,844 $2,005,106Short-term investments 3 591,269 951,235 1,682,048 930,822Accounts receivable due from third parties,

net of allowances of $11,799, $36,594,$29,061 and $35,880 as of December 31,2018, 2019, 2020 and June 30, 2021,respectively 8 190,036 262,158 314,159 467,246

Accounts receivable due from Alibaba, net ofallowances of nil, nil, nil and nil as ofDecember 31, 2018, 2019, 2020 andJune 30, 2021, respectively 8&10 48,222 60,392 135,321 122,991

Accounts receivable due from other relatedparties, net of allowances of $630, nil, $6,095and nil as of December 31, 2018, 2019, 2020and June 30, 2021, respectively 8&10 130,835 99,675 42,530 40,972

Prepaid expenses and other current assets(including loans to and interest receivablefrom other related parties of $43,695,$301,526, $158,622 and $336,558 as ofDecember 31, 2018, 2019, 2020 andJune 30, 2021, respectively) 8&10 168,821 424,905 296,757 587,293

Amount due from SINA 10 105,319 384,828 548,900 498,618

Total current assets 2,469,098 3,636,178 4,834,559 4,653,048

Property and equipment, net 8 45,623 46,729 60,632 61,033Operating lease assets 5 – 9,730 7,176 12,260Intangible assets, net 6 21,103 17,524 146,976 157,177Goodwill 6 29,346 28,989 61,712 113,604Long-term investments 4 694,586 1,027,459 1,179,466 1,123,258Other non-current assets 8 14,926 37,577 44,596 582,345

Total assets $3,274,682 $4,804,186 $6,335,117 $6,702,725

LIABILITIES, REDEEMABLENON-CONTROLLING INTERESTS ANDSHAREHOLDERS’ EQUITY

Current liabilities (including amounts of theconsolidated VIEs without recourse to theprimary beneficiary of $347,770, $436,705,$538,269 and $655,757 as of December 31,2018, 2019, 2020 and June 30, 2021,respectively)Accounts payable $ 123,730 $ 126,247 $ 149,509 $ 159,497Accrued and other liabilities 8 317,437 460,872 556,753 692,390Operating lease liability, short-term 5 – 4,708 5,580 5,594Income taxes payable 88,683 100,245 102,844 89,100Deferred revenues 99,994 108,783 143,684 146,085

Total current liabilities 629,844 800,855 958,370 1,092,666


– IA-5 –

CONSOLIDATED BALANCE SHEETS (Continued)(In thousands of U.S. dollars, except for par value)


June 30,Notes 2018 2019 2020 2021

Long-term liabilitiesConvertible debt 16 884,123 888,266 892,399 894,470Unsecured senior notes 16 – 793,985 1,536,112 1,537,264Deferred tax liability 9 12,577 33,972 58,299 56,048Operating lease liability, long-term 5 – 5,289 1,505 6,154Other non-current liabilities – – 2,102 8,505

Total long-term liabilities 896,700 1,721,512 2,490,417 2,502,441

Total liabilities $1,526,544 $2,522,367 $3,448,787 $3,595,107

Commitments and contingencies 17

Redeemable non-controlling interests 18 $ – $ – $ 57,714 $ 69,359

Shareholders’ equity:Ordinary shares: $0.00025 par value; 2,400,000,

2,400,000, 2,400,000 and 2,400,000 shares(including 1,800,000 Class A ordinary shares,200,000 Class B ordinary shares and 400,000shares to be designated) authorized; 224,838shares (including 123,059 Class A ordinaryshares and 101,779 Class B ordinary shares),226,310 shares (including 124,531 Class Aordinary shares and 101,779 Class B ordinaryshares), 227,688 shares (including 125,909Class A ordinary shares and 101,779 Class Bordinary shares) and 228,281 shares(including 126,502 Class A ordinary sharesand 101,779 Class B ordinary shares) issuedand outstanding as of December 31, 2018,2019, 2020 and June 30, 2021, respectively. $ 57 $ 57 $ 57 $ 57

Additional paid-in capital 1,071,836 1,133,913 1,201,622 1,239,461Accumulated other comprehensive income (loss) (49,615) (68,559) 79,526 108,452Retained earnings 723,181 1,217,856 1,531,220 1,662,068

Total Weibo shareholders’ equity 1,745,459 2,283,267 2,812,425 3,010,038Non-controlling interests 2,679 (1,448) 16,191 28,221

Total shareholders’ equity 1,748,138 2,281,819 2,828,616 3,038,259

Total liabilities, redeemable non-controllinginterests and shareholders’ equity $3,274,682 $4,804,186 $6,335,117 $6,702,725


– IA-6 –

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands of U.S. dollars, except per share data)


June 30,Notes 2018 2019 2020 2020 2021

(Unaudited)

RevenuesAdvertising and marketing

revenues 13Third parties $1,172,136 $1,202,437 $1,202,712 $497,855 $ 728,818Alibaba 10 117,696 97,772 188,597 72,542 109,918SINA 10 79,148 112,974 48,353 27,624 30,931Other related parties 10 130,200 117,028 46,493 17,985 22,682

1,499,180 1,530,211 1,486,155 616,006 892,349Value-added services revenues 13 219,338 236,703 203,776 94,776 141,013

Total revenues 1,718,518 1,766,914 1,689,931 710,782 1,033,362

Costs and expensesCost of revenues 277,648 328,826 302,180 137,694 172,318Sales and marketing 527,424 465,339 455,619 211,220 298,368Product development 249,873 284,444 324,110 150,370 197,985General and administrative 43,755 90,721 101,224 47,298 62,850Goodwill and acquired intangibles

impairment 10,554 – – – –

Total costs and expenses 1,109,254 1,169,330 1,183,133 546,582 731,521

Income from operations 609,264 597,584 506,798 164,200 301,841Income (loss) from equity method

investments 57 (13,198) 10,434 3,388 13,605Realized gain (loss) from

investments (287) 612 2,153 844 1,106Fair value changes through earnings

on investments, net 40,074 207,438 35,115 117,517 (69,495)Investment related impairment (24,074) (249,935) (211,985) (3,920) (66,625)Interest income 57,970 85,386 85,829 45,609 40,068Interest expense (15,390) (29,896) (57,428) (22,363) (35,503)Other income, net 1,228 4,406 4,997 1,356 6,808

Income before income tax expenses 668,842 602,397 375,913 306,631 191,805Less: Provision of income taxes 9 96,222 109,564 61,316 56,627 61,855

Net income 572,620 492,833 314,597 250,004 129,950Less: Net income (loss)

attributable to non-controllinginterests and redeemable non-controlling interests 797 (1,842) 1,233 (520) (898)

Net income attributable to Weibo’sshareholders $ 571,823 $ 494,675 $ 313,364 $250,524 $ 130,848


– IA-7 –

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Continued)(In thousands of U.S. dollars, except per share data)


June 30,Notes 2018 2019 2020 2020 2021

(Unaudited)

Net income $572,620 $492,833 $314,597 $250,004 $129,950Other comprehensive income (loss)

Currency translation adjustments(for which there were no taxes) (60,273) (19,029) 148,547 (31,347) 29,222

Total comprehensive income 512,347 473,804 463,144 218,657 159,172Less: Comprehensive income

(loss) attributable tonon-controlling interests andredeemable non-controllinginterests 668 (1,927) 1,695 (528) (602)

Comprehensive income attributableto Weibo’s shareholders $511,679 $475,731 $461,449 $219,185 $159,774

Shares used in computing netincome per share attributable toWeibo’s shareholders:

Basic 12 223,751 225,452 226,921 226,535 227,936Diluted 12 232,683 226,412 227,637 227,129 229,429Income per share:Basic 12 $ 2.56 $ 2.19 $ 1.38 $ 1.11 $ 0.57Diluted 12 $ 2.52 $ 2.18 $ 1.38 $ 1.10 $ 0.57


– IA-8 –

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY(In thousands of U.S. dollars)

Ordinary SharesAdditional

Paid-InCapital

Accumulated OtherComprehensiveIncome (Loss)

RetainedEarnings

Non-controlling

Interests

TotalShareholders’

EquityShares Amount

Balance at December 31, 2017 222,706 $56 $1,030,048 $ 9,534 $ 152,949 $ 2,207 $1,194,794Issuance of ordinary shares pursuant to

stock plan 2,132 1 777 – – – 778Non-cash stock-based compensation – – 41,011 – – – 41,011Impact of adoption of new revenue

guidance – – – – (596) – (596)Impact of adoption of new guidance

for investments in equity securities – – – 995 (995) – –Net income – – – – 571,823 797 572,620Currency translation adjustments – – – (60,144) – (129) (60,273)Purchase of subsidiaries’ shares from

non-controlling shareholders – – – – – (196) (196)

Balance at December 31, 2018 224,838 $57 $1,071,836 $ (49,615) $ 723,181 $ 2,679 $1,748,138Issuance of ordinary shares pursuant to

stock plan 1,472 – 319 – – – 319Non-cash stock-based compensation – – 61,289 – – – 61,289Purchase of a subsidiary’s shares from

non-controlling shareholders – – 469 – – (2,200) (1,731)Net income (loss) – – – – 494,675 (1,842) 492,833Currency translation adjustments – – – (18,944) – (85) (19,029)

Balance at December 31, 2019 226,310 $57 $1,133,913 $ (68,559) $1,217,856 $ (1,448) $2,281,819Issuance of ordinary shares pursuant to

stock plan 1,378 – 57 – – – 57Non-cash stock-based compensation – – 67,105 – – – 67,105Sale of a subsidiary’s shares to non-

controlling shareholders – – 539 – – 978 1,517Acquisition of subsidiaries with non-

controlling interests – – – – – 16,133 16,133Conversion of convertible debt – – 8 – – – 8Net income – – – – 313,364 1,233 314,597Net income attributable to redeemable

non-controlling interests – – – – – (1,167) (1,167)Currency translation adjustments – – – 148,085 – 462 148,547

Balance at December 31, 2020 227,688 $57 $1,201,622 $ 79,526 $1,531,220 $16,191 $2,828,616


– IA-9 –

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)(In thousands of U.S. dollars)


Paid-InCapital

Accumulated OtherComprehensiveIncome (Loss)

RetainedEarnings

Non-controlling

Interests


EquityShares Amount

(Unaudited)Balance at December 31, 2019 226,310 $57 $1,133,913 $ (68,559) $1,217,856 $ (1,448) $2,281,819Issuance of ordinary shares pursuant to

stock plan 606 – 57 – – – 57Non-cash stock-based compensation – – 30,188 – – – 30,188Net income (loss) – – – – 250,524 (520) 250,004Sale of a subsidiary’s shares to

non-controlling shareholders – – 539 – – 978 1,517Currency translation adjustments – – – (31,339) – (8) (31,347)

Balance at June 30, 2020 226,916 $57 $1,164,697 $ (99,898) $1,468,380 $ (998) $2,532,238

Balance at December 31, 2020 227,688 $57 $1,201,622 $ 79,526 $1,531,220 $16,191 $2,828,616Issuance of ordinary shares pursuant to

stock plan 593 – 226 – – – 226Non-cash stock-based compensation – – 37,840 – – – 37,840Net income (loss) – – – – 130,848 (898) 129,950Compensation cost to non-controlling

interest shareholders – – – – – 2,341 2,341Disposal of a subsidiary with

non-controlling interests – – (227) – – (520) (747)Acquisition of a subsidiary with

non-controlling interests – – – – – 10,811 10,811Currency translation adjustments – – – 28,926 – 296 29,222

Balance at June 30, 2021 228,281 $57 $1,239,461 $108,452 $1,662,068 $28,221 $3,038,259


– IA-10 –

CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands of U.S. dollars)


June 30,

2018 2019 2020 2020 2021

(Unaudited)

Cash flows from operating activities:Net income $ 572,620 $ 492,833 $314,597 $ 250,004 $ 129,950Adjustments to reconcile net income to net

cash provided by operating activities:Depreciation and amortization 19,847 25,772 32,107 13,692 26,034Stock-based compensation 41,011 61,289 67,105 30,188 36,221Amortization of operating lease assets – 3,793 3,974 1,872 2,508Non-cash compensation cost to non-controlling

interest shareholders – – – – 13,280Provision of allowance for credit losses 6,226 38,561 53,124 25,233 10,444Deferred income taxes 4,438 16,839 (15,727) 12,745 (5,061)(Income) Loss from equity method investments (57) 13,198 (10,434) (3,388) (13,605)Dividend received from equity method

investments 657 932 320 – 2,880(Gain) Loss on sale of investments 287 (612) (2,153) (844) (1,106)Fair value changes through earnings on

investments, net (40,074) (207,438) (35,115) (117,517) 69,495Investment related impairment 24,074 249,935 211,985 3,920 66,625Goodwill and acquired intangibles impairment 10,554 – – – –Gain on disposal of property and equipment (120) (120) (74) (27) (65)Amortization of convertible debt and unsecured

senior notes issuance cost 4,140 4,803 5,944 2,738 3,223Changes in assets and liabilities, net of

acquisition:Accounts receivable due from third parties (109,654) (115,086) (75,685) (13,265) (162,548)Accounts receivable due from Alibaba (8,028) (13,032) (68,286) (16,250) 13,846Accounts receivable due from other related

parties (103,982) 28,362 54,699 33,665 8,192Prepaid expenses and other current assets (49,381) (20,128) (30,461) (23,858) 1,978Other non-current assets (1,044) (101) (191) (1,189) (3,760)Accounts payable 64,277 5,161 15,167 (20,321) 9,050Accrued and other liabilities 55,560 117,606 62,404 (21,044) 164,593Amount due from SINA (48,687) (90,129) 148,943 2,487 (16,739)Deferred revenues 24,375 11,254 19,928 51,054 600Operating lease liabilities – (3,502) (4,315) (2,100) (2,930)Income taxes payable 20,968 11,463 (6,210) (22,531) (14,748)

Net cash provided by operating activities 488,007 631,653 741,646 185,264 338,357


– IA-11 –

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(In thousands of U.S. dollars)


June 30,

2018 2019 2020 2020 2021

(Unaudited)

Cash flows from investing activities:Purchases of bank time deposit and wealth

management products (1,792,481) (1,230,596) (3,170,291) (793,810) (501,944)Maturities of bank time deposit and wealth

management products 1,989,055 869,792 2,600,010 891,610 1,253,803Investment in and prepayment on long-term

investments (419,126) (688,920) (392,547) (257,500) (960,446)Proceeds from disposal of/refund of

prepayment on long-term investments 85,134 60,307 289,631 62,129 168,283Proceeds from disposal of property and

equipment 136 122 92 38 260Purchases of property and equipment (28,350) (21,746) (34,828) (15,752) (15,491)Prepayment for purchase of SINA Plaza – – – – (132,531)Loan to SINA (149,460) (233,884) (473,777) (188,194) (310,923)Repayment of loan by SINA 101,060 43,567 181,697 146,697 388,354Payment for acquisitions, net of cash acquired (40,000) – (214,302) – (51,873)

Net cash used in investing activities (254,032) (1,201,358) (1,214,315) (154,782) (162,508)

Cash flows from financing activities:Proceeds from employee options exercised 781 275 122 108 226Proceeds from unsecured senior notes, net of

issuance costs – 793,325 740,324 – –Repayment of loan from SINA (2,000) – – – –Payments to non-controlling shareholders (196) (1,731) – – –Proceeds from sale of a subsidiary’s equity

interest to a non-controlling shareholder – – 1,517 1,517 –

Net cash provided by (used in) financingactivities (1,415) 791,869 741,963 1,625 226

Effect of exchange rate changes on cash andcash equivalents 1,083 (3,775) 92,565 (12,841) 14,187

Net increase in cash and cash equivalents 233,643 218,389 361,859 19,266 190,262Cash and cash equivalents at the beginning of

the year/period 1,000,953 1,234,596 1,452,985 1,452,985 1,814,844

Cash and cash equivalents at the end ofthe year/period $ 1,234,596 $ 1,452,985 $ 1,814,844 $1,472,251 $2,005,106


– IA-12 –

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(In thousands of U.S. dollars)


June 30,

2018 2019 2020 2020 2021

(Unaudited)

Supplemental disclosure of cash flow informationCash paid for interest expenses on convertible

debt/unsecured senior notes $(11,719) $(11,250) $(65,906) $(33,625) $ (5,625)Cash paid for income taxes $(70,060) $(80,666) $(82,667) $(66,199) $(82,265)

Supplemental schedule of non-cash investing andfinancing activitiesProperty and equipment in accounts payable $ 5,258 $ 4,693 $ 3,985 $ 7,767 $ 3,048Unpaid consideration for acquisition $ 10,000 $ – $ 10,280 $ – $ –Consideration settled for acquisition (Note 10) $ – $(10,000) $ – $ – $ –


– IA-13 –

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. Operations

Weibo Corporation (“Weibo” or the “Company”) is a leading social media for people tocreate, share and discover content. It provides an unprecedented and simple way forpeople and organizations to publicly express themselves in real time, interact with otherson a massive global platform and stay connected with the world. As a microcosm of theChinese society and a cultural phenomenon in China, Weibo allows people to be heardpublicly and exposed to the rich ideas, cultures and experiences of the broader world.Media outlets use Weibo as a source of news and a distribution channel for their headlinenews. Government agencies and officials use Weibo as an official communication channelfor disseminating information timely and gauging public opinion to improve publicservices. Weibo provided charities a platform to launch charitable projects, seekdonations and volunteers, and leverage celebrities and organizations on Weibo to amplifytheir impact to society. Weibo generates its revenues mostly from advertising andmarketing services, as well as from value-added services, including VIP membership, livestreaming, and game-related services.

Incorporated in the Cayman Islands, Weibo Corporation is a controlled subsidiary of SinaCorporation (the “Parent” or “SINA”). In April 2014, the Company completed an initialpublic offering (the “IPO”) on National Association of Securities Dealers AutomatedQuotations (“NASDAQ”) and received $306.5 million in net proceeds. Immediately priorto the completion of the IPO, all the ordinary shares held by SINA was converted into anequal number of the Class B ordinary shares, all the ordinary shares held by othershareholders was converted into an equal number of the Class A ordinary shares, and allof its outstanding preferred shares was automatically converted into Class A ordinaryshares. The call option held by a subsidiary of Alibaba Group was exercised to purchaseClass A ordinary shares from SINA and the Company. Each Class A ordinary share isentitled to one vote per share and each Class B ordinary share is entitled to three votesper share. Each Class B ordinary share can be converted into one Class A ordinary shareat any time, while Class A ordinary shares cannot be converted into Class B ordinaryshares.

Weibo Corporation, an exempted company with limited liability under the laws of theCayman Islands, is the holding company for the Weibo business. WB Online and WeiboHK are wholly owned subsidiaries of Weibo, and Weibo Technology, a whollyforeign-owned enterprise, (“the WFOE”), is a subsidiary of Weibo HK. The operation ofWeibo business is carried out by various subsidiaries and variable interest entities(“VIE”) of the Company. The Company’s VIEs and VIEs’ subsidiaries are controlled bythe WFOE through a series of contractual agreements. Weibo Corporation, itssubsidiaries, VIEs and VIEs’ subsidiaries together are referred to as “the Group”.


– IA-14 –

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION (Continued)

1. Operations (continued)

The following sets forth the Company’s major subsidiaries, major VIEs and major VIEs’subsidiary:

CompanyDate of

IncorporationPlace of

Incorporation

Percentageof Direct/Indirect

EconomicInterest

Major SubsidiariesWeibo Hong Kong Limited

(“Weibo HK”)July 19, 2010 Hong Kong 100%

Weibo Internet Technology(China) Co., Ltd.(“Weibo Technology” or“the WFOE”)

October 11, 2010 PRC 100%

WB Online Investment Limited(“WB Online”)

June 5, 2014 Cayman Islands 100%

Hangzhou WeishichangmengAdvertising Co., Ltd.(“Weishichangmeng”)

September 25,2018

PRC 100%

Major VIEsBeijing Weimeng Technology

Co., Ltd (“Weimeng”)August 9, 2010 PRC 99%

Beijing Weimeng ChuangkeInvestment ManagementCo., Ltd. (“WeimengChuangke”)

April 9, 2014 PRC 100%

Major VIEs’ subsidiaryBeijing Weibo Interactive

Internet Technology Co., Ltd.(“Weibo Interactive”)

Acquired in May2013

PRC 100%


– IA-15 –



Intellectual Property License Agreement

The intellectual property license agreement was entered into by and between SINA andthe Company in April 2013. Under this agreement, SINA granted the Company and itssubsidiaries a perpetual, worldwide, royalty-free, fully paid-up, non-sub licensable,non-transferable, limited, exclusive license of certain trademarks and a non-exclusivelicense of certain other intellectual property owned by SINA to make, sell, offer to selland distribute products, services and applications on a microblogging and socialnetworking platform. The Company granted SINA and its affiliates a non-exclusive,perpetual, worldwide, non-sub licensable, non-transferable limited license of certain ofthe Company’s intellectual property to use, reproduce, modify, prepare derivative worksof, perform, display or otherwise exploit such intellectual property. This agreementcommenced on April 29, 2013 and will continue to be in effect unless terminated by SINAshould the Company breach the terms as provided in the agreement.

Transactions between SINA and Weibo

Accounts receivable directly related to Weibo but for which SINA will receive paymentsand remit payments to the Group, as well as accounts receivable directly from SINA, areincluded in the amount due from SINA. Liabilities directly related to Weibo but for whichSINA will make payments and receive reimbursements from the Group, as well asliabilities directly to SINA, are included in the amount due to SINA. The amount duefrom/to SINA is presented as an offsetting balance on the Group’s consolidated balancesheets. Loans from SINA are presented under cash flow from financing activities, whereasloans to SINA are presented under investing activities in the consolidated statements ofcash flows. Cash payment for billings from SINA for costs and expenses allocated to theGroup is presented under operating activities in the consolidated statements of cash flows.The Group’s consolidated statements of comprehensive income contain all the relatedcosts and expenses of the Weibo business, including allocation to the cost of revenues,sales and marketing expenses, product development expenses, and general andadministrative expenses, which are incurred by SINA but related to the Weibo business.These allocations were based on proportional cost allocation by considering proportion ofthe revenues, infrastructure usage metrics and labor usage metrics, among other things,attributable to the Group and are made on a basis considered reasonable by mutualmanagements.


– IA-16 –



Transactions between SINA and Weibo (continued)

Total cost and expenses allocated from SINA were as follows:


June 30,

2018 2019 2020 2020 2021

(Unaudited)(In thousands)

Cost of revenues $16,824 $22,246 $19,462 $11,112 $ 7,691Sales and marketing 11,558 9,770 5,966 3,555 2,350Product development 11,688 13,141 10,505 5,528 5,225General and administrative 7,264 6,691 7,078 2,934 3,337

$47,334 $51,848 $43,011 $23,129 $18,603

While the costs and expenses allocated to the Group for these items are not necessarilyindicative of the costs and expenses that would have been incurred if the Group hadtransactions with independent third party suppliers directly or hired more employees, theCompany does not believe that there is any significant difference between the nature andamount of these allocated costs and expenses and the ones that would have been incurredif the Group had transactions with independent third party suppliers directly or hired moreemployees.

Consolidation

The consolidated financial statements include the accounts of the Company, itswholly-owned subsidiaries, VIEs, of which the Company is the primary beneficiary, andVIEs’ subsidiaries. All significant intercompany balances and transactions have beeneliminated.

To comply with PRC laws and regulations, the Group provides a substantial amount of itsservices in China via the VIEs, which holds critical operating licenses that enable theGroup to do business in China. Most of the Group’s revenues, costs and expense, and netincome in China were generated directly or indirectly through the VIEs. The Company,through the WFOE, has signed various agreements with the VIEs to allow the transfer ofeconomic benefits from the VIEs to the Company. The Group has determined that it is theprimary beneficiary of the VIEs through Weibo Technology’s contractual arrangementswith the VIEs. Accordingly, the Company has consolidated the results of operations andassets and liabilities of VIEs and VIEs’ subsidiaries in the Group’s financial statementspursuant to the United States Generally Accepted Accounting Principles (“US GAAP”)for all the periods presented.


– IA-17 –



Consolidation (continued)

Shareholders of the VIEs are certain nominee shareholders from the Company or SINA.The capital for their investments in the VIEs is funded by the Company and recorded asinterest-free loans to these individuals. These loans were eliminated with the capital ofthe VIEs during consolidation. Each shareholder of the VIEs has agreed to transfer theirequity interest in the VIEs to Weibo Technology when permitted by PRC laws andregulations or to designees of the Company at any time for the amount of loansoutstanding. All voting rights of the VIEs, including without limitation the right toappoint all directors of the VIEs, has been assigned to Weibo Technology. WeiboTechnology has also entered into exclusive technical service agreements with the VIEsunder which Weibo Technology provides technical and other services to the VIEs inexchange for substantially all net income of the VIEs. In addition, the shareholders of theVIEs have pledged their shares in the VIEs as collateral for the non-payment of loans orfor the technical and other services fees due to Weibo Technology. As of December 31,2018, 2019, 2020 and June 30, 2021, the total amounts of interest-free loans to the VIEs’shareholders were $82.1 million, $81.1 million, $89.5 million and $90.6 million,respectively. The VIEs and VIEs’ subsidiaries had retained earnings of $23.2 million,$33.1 million, accumulated deficit of $96.1 million and $158.8 million as of December31, 2018, 2019, 2020 and June 30, 2021, respectively, which were included in the Group’sconsolidated financial statements.

The following table sets forth the assets, liabilities, results of operations and cash flowsof the VIEs and VIEs’ subsidiaries taken as a whole, which are included in the Group’sconsolidated balance sheets, consolidated statements of comprehensive income andconsolidated statements of cash flows:


June 30,

2018 2019 2020 2021

(In thousands)

Cash, cash equivalents andshort-term investments $ 55,506 $ 99,465 $ 445,210 $ 340,157

Accounts receivable 366,128 420,686 431,022 532,243Prepaid expenses and other

current assets 121,210 101,363 55,653 178,561Amount due from SINA 31,787 116,535 31,142 26,032Property and equipment, net 449 243 692 1,499Operating lease assets – 686 1,783 5,054Intangible assets 21,103 17,524 146,976 157,177Goodwill 29,346 28,989 61,712 113,604Long-term investments 275,819 380,420 394,745 369,686Deferred tax assets 5,778 10,608 15,392 15,516Others 1,464 8,625 223 250,268

Total assets $908,590 $1,185,144 $1,584,550 $1,989,797


– IA-18 –





June 30,

2018 2019 2020 2021

(In thousands)

Accounts payable $ 79,881 $ 86,417 $ 83,336 $ 97,710Accrued and other liabilities 181,188 254,564 341,552 399,549Deferred revenues 65,531 66,533 85,846 89,098Income taxes payable 21,170 28,970 26,417 67,347Amount due to the subsidiaries

of the Group 440,563 632,900 968,138 1,285,039Operating lease liability – 586 1,704 5,060Deferred tax liability 11,875 11,453 32,418 34,008Other non-current liabilities – – 2,102 8,506

Total liabilities $800,208 $1,081,423 $1,541,513 $1,986,317


June 30,

2018 2019 2020 2020 2021


Net revenues $1,416,367 $1,472,867 $1,319,080 $570,963 $794,981Net income (loss) after

intercompany service feecharge $ 56,466 $ 9,874 $ (129,126) $ (37,727) $ (62,726)


June 30,

2018 2019 2020 2020 2021


Net cash provided by (used in)operating activities $ 46,738 $(100,987) $ 157,262 $(55,363) $ 317,989

Net cash used in investingactivities (331,243) (280,404) (272,958) (40,927) (468,791)

Net cash provided by financingactivities 292,151 441,952 290,234 36,837 31,406

Net increase (decrease) in cashand cash equivalents $ 7,646 $ 60,561 $ 174,538 $(59,453) $(119,396)


– IA-19 –




Under the contractual arrangements with the VIEs, the Company has the power to directactivities of the VIEs through Weibo Technology and can have assets transferred freelyout of the VIEs without restrictions. Therefore, the Company considers that there is noasset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’subsidiaries, except for the registered capital and non-distributable reserve funds of theVIEs and VIEs’ subsidiaries, amounting to $144.1 million, $152.0 million, $196.6 millionand $228.5 million as of December 31, 2018, 2019 and 2020 and June 30, 2021,respectively. Since the VIEs are incorporated as limited liability companies under thePRC Company Law, creditors of the VIEs do not have recourse to the general credit ofthe Company. There is currently no contractual arrangement that would require theCompany to provide additional financial support to the VIEs. As the Company isconducting certain businesses mainly through the VIEs, the Company may provide suchsupport on a discretionary basis in the future, which could expose the Company to a loss.The total amount of costs and expenses allocated from SINA to the VIEs was $25.6million, $27.6 million, $8.7 million, $7.2 million and $1.9 million for the years endedDecember 31, 2018, 2019 and 2020 and six months ended June 30, 2020 and 2021,respectively.

Unrecognized revenue-producing assets held by the VIEs include the Internet ContentProvision License, the Online Culture Operating Permit, the domain names ofWeibo.com, Weibo.cn and Weibo.com.cn and so on. Recognized revenue-producing assetsheld by the VIEs include game technology, live streaming platform technology,supplier-relationship contracts, and trademark and domain names, which were acquiredthrough the previous acquisitions. Unrecognized revenue-producing assets, includingcustomer lists relating to advertising and marketing services, VIP membership, andgame-related services, as well as trademarks, are also held by Weibo Technology.

The following is a summary of the VIE agreements with Weimeng. The VIE agreementswith Weimeng Chuangke are substantially the same as those described below:

Loan Agreements. Weibo Technology has granted interest-free loans to the shareholdersof Weimeng with the sole purpose of providing funds necessary for those shareholders tomake capital injections to Weimeng. The term of the loans is 10 years and WeiboTechnology has the right, at its own discretion, to shorten or extend the term of the loansif necessary. In the consolidated financial statements, these loans are eliminated with thecapital of Weimeng during consolidation.

Share Transfer Agreements. Each shareholder of Weimeng has granted Weibo Technologyan option to purchase his shares in Weimeng at a purchase price equal to the amount ofcapital injection. Weibo Technology may exercise such option at any time until it hasacquired all shares of Weimeng, subject to applicable PRC laws. The options will beeffective until the earlier of (i) Weibo Technology and the shareholders of Weimeng havefully performed their obligations under these agreements, and (ii) Weibo Technology andthe shareholders of Weimeng agree in writing to terminate these agreements.


– IA-20 –




Loan Repayment Agreements. Each shareholder of Weimeng has agreed with WeiboTechnology that the interest-free loans under the loan agreements shall only be repaidthrough share transfers. Once the share transfers are completed, the purchase price for theshare transfer will be set off against the loan repayment. These agreements will beeffective until the earlier of (i) Weibo Technology and the shareholders of Weimeng havefully performed their obligations under these agreements, and (ii) Weibo Technology andthe shareholders of Weimeng agree in writing to terminate these agreements.

Agreement on Authorization to Exercise Shareholder’s Voting Power. Each shareholder ofWeimeng has authorized Weibo Technology to exercise all his voting power as ashareholder of the applicable VIE on all matters requiring shareholders’ approval underPRC laws and regulations and the articles of association of Weimeng, including withoutlimitation to the appointment of directors, transfer, mortgage or dispose of Weimeng’sassets, transfer of any equity interest in Weimeng, and merger, split, dissolution andliquidation of Weimeng. The authorizations are irrevocable and will not expire untilWeimeng dissolves.

Share Pledge Agreements. Each shareholder of Weimeng has pledged all of his shares inWeimeng and all other rights relevant to his rights in those shares to Weibo Technologyas security for his obligations to pay off all debts to Weibo Technology under the loanagreement. In the event of default of such obligations, Weibo Technology will be entitledto certain rights, including transferring the pledged shares to itself and disposing of thepledged shares through sale or auction. During the term of the agreements, WeiboTechnology is entitled to receive all dividends and distributions paid on the pledgedshares. The pledges will be effective until the earlier of (i) the third anniversary of the duedate of the last guaranteed debt, (ii) Weimeng and its shareholders have fully performedtheir obligations under these agreements, and (iii) Weibo Technology consents toterminate these agreements.

Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement andTrademark License Agreement. Weimeng has entered into an exclusive technical servicesagreement, an exclusive sales agency agreement and a trademark license agreement withWeibo Technology. Under the exclusive technical services agreement, Weibo Technologyis engaged to provide technical services for Weimeng’s online advertising and otherrelated businesses. Under the exclusive sales agency agreement, Weimeng has grantedWeibo Technology the exclusive right to distribute, sell and provide agency services forall the products and services provided by Weimeng. Due to its control over Weimeng,Weibo Technology has the right to determine the service fee to be charged to Weimengunder these agreements by considering, among other things, the technical complexity ofthe services, the actual cost that may be incurred for providing such services, theoperations of Weimeng, applicable tax rates, planned capital expenditure and businessstrategies. These agreements can only be prematurely terminated by Weibo Technology,and will not expire until Weimeng dissolves. Under the trademark license agreement,Weibo Technology has granted Weimeng trademark licenses to use the trademarks held byor licensed to Weibo Technology in specific areas, and Weimeng is obligated to paylicense fees to Weibo Technology. The term of this agreement is one year and isautomatically renewed provided there is no objection from Weibo Technology.


– IA-21 –




These VIE agreements provide Weibo Technology with the power to direct the activitiesthat most significantly affect the economic performance of the Group’s consolidated VIEsand enable the Group to receive substantially all of the economic benefits generated bythem. For the years ended December 31, 2018, 2019 and 2020 and six months ended June30, 2020 and 2021, the total amount of service fees that Weibo Technology received fromWeimeng under these service agreements and trademark license agreement was $842.6million, $832.4 million, $766.8 million, $312.7 million and $438.5 million, respectively,which were based on the actual cost incurred from providing the services and the cashposition and operations of Weimeng.

Weibo Technology, Weimeng Chuangke and Weimeng Chuangke’s shareholders haveentered into contractual arrangements which contain agreements and terms substantiallysimilar to Weibo Technology’s contractual arrangements with Weimeng and Weimeng’sshareholders described above.


In April 2020, WangTouTongDa (Beijing) Technology Co., Ltd., an entity affiliated withZhongWangTou (Beijing) Technology Co., Ltd., made an investment of approximatelyRMB10.7 million in Weimeng for 1% of Weimeng’s enlarged registered capital. Suchthird party minority stake holder is entitled to customary economic rights in proportionto its equity ownership, and certain minority shareholder rights such as the right toappoint a director to Weimeng’s three-member board of directors, and veto rights overcertain matters related to content decision, and certain future financings of Weimeng.

The third party minority stake holder is not a party to the contractual arrangementsmentioned above that are currently in effect among Weimeng, Weibo Technology andWeimeng’s other shareholders. As such, despite the fact that the Company is still able toenjoy economic benefits and exercise effective control over Weimeng and its subsidiaries,the Company is not able to purchase or have the third party minority stake holder pledgeits 1% equity interests in Weimeng in the same manner as agreed under existingcontractual arrangements, nor is it granted the authorization of voting rights over these1% equity interests. The Company believes Weibo Technology, the wholly-owned PRCsubsidiary, still controls and is the primary beneficiary of Weimeng as it continues to havea controlling financial interest in Weimeng pursuant to ASC 810-10-25-38A after theissuance of such 1% equity interests.

The Company believes that the contractual arrangements among the WFOE, VIEs andVIEs’ shareholders are in compliance with the current PRC laws and legally enforceable.However, uncertainties in the interpretation and enforcement of the PRC laws, regulationsand policies could limit the Company’s ability to enforce these contractual arrangements.As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiariesin the consolidated financial statements. The Company’s ability to control the VIEs also


– IA-22 –




Minority Investment in Weimeng (continued)

depends on the authorization by the shareholders of the VIEs to exercise voting rights onall matters requiring shareholder approval in the VIEs. The Company believes that theagreements on authorization to exercise shareholder’s voting power are legallyenforceable. In addition, if the legal structure and contractual arrangements with the VIEswere found to be in violation of any future PRC laws and regulations, the Company maybe subject to fines or other actions. The Company believes the possibility that it will nolonger be able to control and consolidate the VIEs as a result of the aforementioned risksand uncertainties is remote.

2. Significant Accounting Policies

This note provides a list of significant accounting policies adopted in the preparation ofthe Historical Financial Information. These policies have been consistently applied to allthe years presented, unless otherwise stated. The Historical Financial Information is forthe group consisting of the Company and its subsidiaries.

Basis of presentation

The preparation of the Group’s consolidated financial statements is in conformity withU.S. GAAP. The consolidated financial statements include the accounts of Weibo, itswholly owned subsidiaries, VIEs, and VIEs’ subsidiaries. All significant intercompanybalances and transactions have been eliminated.

Use of estimates

Conformity with U.S. GAAP requires the use of estimates and judgments that affect thereported amounts in the consolidated financial statements and accompanying notes. Theseestimates form the basis for judgments the management makes about the carrying valuesof the assets and liabilities, which are not readily apparent from other sources. U.S.GAAP requires making estimates and judgments in several areas, including, but notlimited to, the basis of consolidation, revenue recognition, fair value accounting, incometaxes, goodwill and other long-lived assets, allowances for credit losses, stock-basedcompensation, the estimated useful lives of assets, convertible debt, businesscombination, and foreign currency. The management bases the estimates and judgmentson historical information and on various other assumptions that management believes arereasonable under the circumstances. Actual results could differ materially from suchestimates.


– IA-23 –


2. Significant Accounting Policies (continued)

Revenue recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued, ASU 2014-09,“Revenue from Contracts with Customers (Topic 606)”. The Group adopted the newrevenue guidance since January 1, 2018 using the modified retrospective method. Resultsfor reporting periods beginning on or after January 1, 2018 are presented under ASC 606,while prior period amounts are not adjusted and continue to be reported in accordancewith the Group’s historic accounting method under ASC 605. The main impacts are a) thepresentation of value added tax recognized in revenue from “gross” to “net”, whichresults in equal decrease of revenues and cost of revenues, and b) the recognition ofrevenues and expenses at fair value for advertising barter transactions, which mainlyresults in the increase of revenue and advertising expenses.

Impact of Adoption

The cumulative-effect adjustment on the retained earnings as of January 1, 2018 relatedto the initial application of the new revenue standard was $0.6 million, which resultedfrom advertising barter transactions. The adoption resulted in an increase of $2.1millionin deferred revenue and an increase of $0.6 million in other current assets as of December31, 2018.

The table below summarized the impact of adoption of the new revenue standard on theGroup’s consolidated statement of comprehensive income for the year ended December31, 2018.

Year ended December 31, 2018

Adjustments

ASC 605 VATBarter

Transaction ASC 606

($ In thousands)

Total revenues 1,703,644 (95,470) 110,344 1,718,518Costs and expenses

Cost of revenues 373,118 (95,470) – 277,648Sales and marketing 418,004 – 109,420 527,424

Income from operations 608,340 – 924 609,264

Under ASC 606, revenues are recognized when control of the promised goods or servicesis transferred to customers, in an amount that reflects the consideration the Group expectsto be entitled to in exchange for those goods or services. The Group identifies its contractswith customers and all performance obligations within those contracts. The Group thendetermines the transaction price and allocates the transaction price to the performanceobligations within the Group’s contracts with customers, recognizing revenue when, or as,the Group satisfies its performance obligations.


– IA-24 –



Revenue recognition (continued)

Impact of Adoption (continued)

The Group does not believe that significant management judgments are involved inrevenue recognition, but the amount and timing of the Group’s revenues could bedifferent for any period if management made different judgments. Certain customers mayreceive sales rebates, which are accounted for as variable consideration. The Groupestimates annual expected revenue volume of each individual agent with reference to theirhistorical results. The Group recognizes revenue for the amount of fees it receives fromits advertisers, after deducting estimated sales rebates and net of value-added tax (“VAT”)under ASC 606. The Group believes that there will not be significant changes to itsestimates of variable consideration.

Revenue disaggregated by revenue source for the years ended December 31, 2018, 2019and 2020 and six months ended June 30, 2020 and 2021 consists of the following:


June 30,

2018 2019 2020 2020 2021


Advertising and marketingrevenues $1,499,180 $1,530,211 $1,486,155 $616,006 $ 892,349

Value-added services revenues 219,338 236,703 203,776 94,776 141,013

Total revenues $1,718,518 $1,766,914 $1,689,931 $710,782 $1,033,362

The Group enters into contracts with its customers, which may give rise to contract assets(unbilled revenue) or contract liabilities (deferred revenue). The payment terms andconditions within the Group’s contracts vary by the type and location of its customers andproducts or services purchased, the substantial majority of which are due in less than oneyear. Deferred revenues related to unsatisfied performance obligations at the end of theperiod are mainly from the customer advance of the advertising and marketing servicesand the sales of the fee-based services, such as VIP membership, live streaming, andvirtual currency or in-game virtual items sold for game related services. The deferredrevenues are recognized based on customers’ consumption or amortized on a straight-linebasis through the service period for different products/services. Due to the generallyshort-term duration of the contracts, the majority of the performance obligations aresatisfied in the following reporting period. The amount of revenue recognized that wasincluded in the deferred revenue balance at the beginning of the periods was $67.2million, $88.3 million, $91.5 million, and $104.5 million for the years ended December31, 2018, 2019 and 2020 and six months ended June 30, 2021, respectively.


– IA-25 –




Practical Expedients and Exemptions

The Group generally expenses sales commissions when incurred because the amortizationperiod is generally one year or less. These costs are recorded within sales and marketingexpenses.

Advertising and marketing revenues

Advertising and marketing revenues are derived principally from online advertising,including social display ads and promoted marketing. Social display ad arrangementsallow customers to place advertisements on particular areas of the Group’s platform orwebsite in particular formats and over particular periods of time, which is typically nomore than three months. The Group enters into cost per mille (“CPM”), or cost perthousand impressions, advertising arrangements with the customers, under which theGroup recognizes revenues based on the number of times that the advertisement has beendisplayed. The Group also enters into cost per day (“CPD”) advertising arrangements withcustomers, under which the Group recognizes revenues ratably over the contract periods.Promoted marketing arrangements are primarily priced based on CPM. Under the CPMmodel, customers are obligated to pay when the advertisement is displayed.

The Group’s majority revenue transactions are based on standard business terms andconditions, which are recognized net of agency rebates. The agency rebates are accountedfor as variable consideration and are estimated during interim periods based on estimatedannual revenue volume of each individual agent with reference to their historical results,which involves accounting judgment. The Group believes its estimation approach invariable consideration results in revenue recognition in a manner consistent with theunderlying economics of the transaction.

The Group’s contracts with customers may include multiple performance obligations,which primarily consist of combination of service to allow customers to placeadvertisements on different areas of its platform or website. For such arrangements,advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognitionpurposes. The estimation of stand-alone selling price involves significant judgment,especially for the deliverables that have not been sold separately. For those deliverables,the Group determines best estimate of the stand-alone selling price by taking intoconsideration of the pricing of advertising areas of the Group’s platform or website withsimilar popularities and advertisements with similar formats and quoted prices fromcompetitors and other market conditions. The Group believes the estimation approach instand-alone selling price and allocation of the transaction price on a relative stand-aloneselling price to each performance obligation results in revenue recognition in a mannerconsistent with the underlying economics of the transaction and the allocation principleincluded in ASC 606. Revenues recognized with reference to best estimation of sellingprice were immaterial for all periods presented. Most of such contracts have allperformance obligations completed within one year. Changes in judgments on theseassumptions and estimates could materially impact the timing or amount of revenuerecognition. Contracts with customers of online advertising may require cooperation from


– IA-26 –




Advertising and marketing revenues (continued)

third parties. The Group pays a predetermined portion of revenues it earned fromadvertising contracts to the third parties such as key opinion leaders who participate inadvertising and promotion activities by monetizing their social assets. The Group hasdetermined that it is the principal in these transactions, as it is primarily responsible forfulfilling all the obligations related to advertising contracts. The Group has discretion inestablishing pricing of the contracts and controls the advertising inventory before thedelivery to customers. The Group records revenues derived from such contracts on a grossbasis and the portion paid to the third parties is recognized as cost of revenues.

Revenues from barter transactions are recognized during the period in which theadvertisements are displayed on the Group’s properties. Barter transactions in whichphysical goods or services are received in exchange for advertising services are recordedbased on the fair values of the goods or services received.

Value-added services revenues

The Group generates value-added services revenues principally from fee-based services,mainly including VIP membership, live streaming, and game-related services. Othervalue-added services revenues mainly include the revenues from the provision of trafficacquisition services to various customers. Revenues from these services are recognizedwhen control of the promised services is transferred to customers, in an amount thatreflects the consideration the Group expects to be entitled to in exchange for thoseservices.

VIP membership. VIP membership mainly includes a service package consisting of oneperformance obligation of providing user certification and preferential benefits, such asdaily priority listings and higher quota for following user accounts. Prepaid VIPmembership fees are recorded as deferred revenue and recognized as revenue ratably overthe contract period of the membership service.

Live streaming. Live streaming generates revenue from sales of virtual items on the livestreaming platform (“Yizhibo”). Users can access the platform and view the livestreaming content and interact with the broadcasters for free.

The Group designs, creates and offers various virtual items for sales to users withpre-determined selling price. Each virtual item is considered as a distinctive performanceobligation. Sales proceeds are recorded as deferred revenue and recognized as revenuebased on the consumption of the virtual items. Users can purchase and present virtualitems to broadcasters to show support for their favorite ones. Under the arrangementswith broadcasters or broadcaster agencies, the Group shares with them a portion of therevenues derived from the consumption of virtual items. Revenues derived from the saleof virtual items are recorded on a gross basis as the Group has determined that it acts asthe principal to fulfill all obligations related to the live streaming services. The portionpaid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. TheGroup does not have further obligations to the user after the virtual items are consumed.


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Value-added services revenues (continued)

Game-related services. Game-related service revenues are mostly generated from thepurchase of virtual items by game players through the Group’s platform, including items,avatars, skills, privileges or other in game consumables, features or functionality, withinthe games. The Group’s performance obligation is to provide on-going game services toplayers who purchased virtual items to gain an enhanced game-playing experience. Eachvirtual item is considered as a distinctive performance obligation. The Group collectspayments from the game players in connection with the sale of virtual currency, whichcan be used to purchase virtual items in online games. For games co-operated with thirdparty developers, revenue is recorded on a gross basis for games that the Group is actingas the principal in fulfilling all obligations related to the games and revenue is recordednet of predetermined revenue sharing with the game developers for games in which theGroup is not acting as the principal in fulfilling all obligations. Sales of virtual currenciesare recognized as revenues over the estimated lifespans of in-game virtual items. Theestimated lifespans of different virtual items are determined by the management based oneither the expected user relationship periods or the stipulated period of validity of therelevant virtual items depending on the respective term of virtual items. Virtual currencysold for game-related services in excess of recognized revenues is recorded as deferredrevenues.

Cost of revenues

Cost of revenues consists mainly of costs associated with the maintenance of platform,which primarily include bandwidth and other infrastructure costs, revenue-share cost,advertisement production cost, labor cost and turnover taxes levied on the revenues, partof which were allocated from SINA. The Group is subject to 3% cultural businessconstruction fees for its advertising and marketing revenues, which is included in cost ofrevenues. Starting from July 1, 2019, the 3% cultural business construction fees wasreduced to 1.5%. Moreover, as part of the measures taken by the government to ease thenegative impact from Covid-19 pandemic, the cultural business construction fees wasexempted for the fiscal year of 2020 and 2021. An aggregate of $24.6 million and $11.5million cultural business construction fees was exempted for the year ended December31, 2020 and six months ended June 30, 2021, respectively.

Sales and marketing expenses

Sales and marketing expenses consist mainly of online and offline advertising andpromotional expenses, salary, benefits and commission expenses, and facility expenses.Advertising and promotional expenses generally represent the expenses of promotions ofcorporate image and product marketing. The Group expenses all advertising andpromotional expenses as incurred and classifies these expenses under sales and marketingexpenses. For the years ended December 31, 2018, 2019 and 2020 and six months endedJune 30, 2020 and 2021, the advertising and promotional expenses were $428.8 million,$352.3 million, $330.9 million, $156.9 million and $219.9 million, respectively.


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Product development expenses

Product development expenses consist mainly of payroll-related expenses andinfrastructure costs incurred for enhancement to and maintenance of the Group’splatform, as well as costs associated with new product development and productenhancements, part of which were allocated from SINA. The Group expenses all costsincurred for the planning and post implementation phases of development and costsassociated with repair or maintenance of the existing site or the development of platformcontent. Since inception, the amount of costs qualifying for capitalization has beenimmaterial and, as a result, all product development costs have been expensed asincurred.


All stock-based awards to employees and directors, such as stock options and restrictedshare units (“RSUs”), are measured at the grant date based on the fair value of the awards.Stock-based compensation, net of forfeitures, is recognized as expenses on a straight-linebasis over the requisite service period, which is the vesting period.

The Group uses the Black-Scholes option pricing model to estimate the fair value of stockoptions. The determination of estimated fair value of stock-based payment awards on thegrant date using an option pricing model is affected by the fair value of the Company’sordinary shares as well as assumptions regarding a number of complex and subjectivevariables. These variables include the expected value volatility of the Company over theexpected term of the awards, actual and projected employee stock option exercisebehaviors, a risk-free interest rate and expected dividends, if any. Options grantedgenerally vest over four years.

The Group recognizes the estimated compensation cost of restricted share units based onthe fair value of its ordinary shares on the date of the grant. The Group recognizes thecompensation cost, net of estimated forfeitures, over a vesting term of generally fouryears for service-based restricted share units. The Group also recognizes thecompensation cost of performance-based restricted share units, net of estimatedforfeitures, if it is probable that the performance condition will be achieved at the end ofeach reporting period.

Forfeitures are estimated at the time of grant and revised in subsequent periods if actualforfeitures differ from those estimates. The Group uses historical data to estimatepre-vesting option and records stock-based compensation expense only for those awardsthat are expected to vest. See Note 7 Stock-based Compensation for further discussion onstock-based compensation.


– IA-29 –



Taxation

Income taxes

Income taxes are accounted for using the asset and liability approach. Under thisapproach, income tax expense is recognized for the amount of taxes payable or refundablefor the current year. In addition, deferred tax assets and liabilities are recognized forexpected future tax consequences of temporary differences between the financialreporting and tax bases of assets and liabilities, and for operating losses and tax creditcarry forwards. The Group records a valuation allowance to reduce deferred tax assets toan amount for which realization is more likely than not.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting forIncome Taxes, as part of its initiative to reduce complexity in accounting standards. Theamendments in the ASU are effective for fiscal years beginning after December 15, 2020,including interim periods therein. Early adoption of the standard is permitted, includingadoption in interim or annual periods for which financial statements have not yet beenissued. The Group adopted the ASU on January 1, 2021, which did not have a materialimpact on the consolidated financial statements.

Uncertain tax positions. To assess uncertain tax positions, the Group applies a more likelythan not threshold and a two-step approach for the tax position measurement and financialstatement recognition. Under the two-step approach, the first step is to evaluate the taxposition for recognition by determining if the weight of available evidence indicates thatit is more likely than not that the position will be sustained, including resolution of relatedappeals or litigation processes, if any. The second step is to measure the tax benefit as thelargest amount that is more than 50% likely of being realized upon settlement.

Short-term investments

Short-term investments represent bank time deposits and wealth management productswhich are certain deposits with variable interest rates or principal not-guaranteed withcertain financial institutions. Their original maturities are of greater than three months butless than one year. In accordance with ASC 825, Financial Instruments, for wealthmanagement products with the interest rate indexed to performance of underlying assets,the Group elected the fair value method at the date of initial recognition and carried theseinvestments at fair value. Changes in the fair value are reflected in the consolidatedstatements of comprehensive income as interest income.

Accounts receivable and allowances for doubtful accounts/credit losses

Prior to January 1, 2020, accounts receivable are recorded and carried at the originalinvoiced amount less an allowance for any potential uncollectible amounts. The Groupmaintains an allowance for doubtful accounts which reflects its best estimate of amountsthat will not be collected. The Group determines the allowance for doubtful accountsbased on historical rolling average bad debt rate in the prior period and other factors, suchas credit-worthiness of the customers and the age of the receivable balances. The Groupalso provides specific provisions for bad debts when facts and circumstances indicate that


– IA-30 –



Accounts receivable and allowances for doubtful accounts/credit losses (continued)

the receivable is unlikely to be collected. If the financial condition of the Group’scustomers were to deteriorate, resulting in impairment of their ability to make payments,more bad debt allowances may be required.

In 2016, the FASB issued ASC Topic 326, which amends previously issued guidanceregarding the impairment of financial instruments by creating an impairment model thatis based on expected losses. The guidance is applicable to accounts receivable and theGroup adopted ASC Topic 326 on January 1, 2020. Accounts receivable are recorded atthe original amounts less an allowance for any potential uncollectible amounts. TheGroup makes estimates of expected credit and collectability trends for the allowance forcredit losses based upon assessment of various factors, including historical experience,the age of the accounts receivable balances, credit-worthiness of the customers, currenteconomic conditions, reasonable and supportable forecasts of future economic conditions,and other factors that may affect its ability to collect from the customers. The Group alsoprovides specific provisions for allowance when facts and circumstances indicate that thereceivable is unlikely to be collected. Expected credit losses for accounts receivable arerecorded as general and administrative expenses on the consolidated statements ofcomprehensive income. The initial impact of applying ASC Topic 326 on the consolidatedfinancial statements is immaterial to the Group’s retained earnings as of January 1, 2020.

ASC Topic 326 is also applicable to the loans to and interest receivable from other relatedparties included in the prepaid expenses and other current assets on the consolidatedbalance sheets. Management estimates the allowance for credit losses on loans andinterest receivable not sharing similar risk characteristic on an individual basis, based onlifetime expected credit losses of these loans and interest receivable by estimating loancollection schedule, then discounting these cash flows to their present values. The keyfactors considered when determining the above allowances for credit losses includeestimated loan collection schedule, discount rate, financial condition and performancedata of the borrowers and reasonable and supportable performance forecasts.

Fair value measurements


All financial assets and liabilities are recognized or disclosed at fair value in theconsolidated financial statements on a recurring basis. Accounting guidance defines fairvalue as the price that would be received from selling an asset or paid to transfer aliability in an orderly transaction between market participants at the measurement date.When determining the fair value measurements for assets and liabilities required orpermitted to be recorded at fair value, the Group considers the principal or mostadvantageous market in which it would transact and it considers assumptions that marketparticipants would use when pricing the asset or liability.

The Group measures the equity method investments at fair value on a non-recurring basisonly if an impairment charge were to be recognized. For those investments withoutreadily determinable fair value, the Group measures them at fair value when observableprice changes are identified or impairment charge was recognized. The fair values of the


– IA-31 –



Fair value measurements (continued)

Financial instruments (continued)

Group’s privately held investments as disclosed are determined based on the discountedcash flow model using the discount curve of market interest rates or based on the similartransaction price in the market directly. The fair values of the Group’s long-terminvestments in the equity securities of publicly listed companies are measured usingquoted market prices. The Group’s non-financial assets, such as intangible assets,goodwill, fixed assets and operating lease assets, would be measured at fair value only ifthey were determined to be impaired.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximizethe use of observable inputs and minimize the use of unobservable inputs when measuringfair value. A financial instrument’s categorization within the fair value hierarchy is basedupon the lowest level of input that is significant to the fair value measurement.Accounting guidance establishes three levels of inputs that may be used to measure fairvalue:

• Level 1 applies to assets or liabilities for which there are quoted prices in activemarkets for identical assets or liabilities.

• Level 2 applies to assets or liabilities for which there are inputs other than quotedprices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices foridentical asset or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or model-derived valuations in which significantinputs are observable or can be derived principally from, or corroborated by,observable market data.

• Level 3 applies to asset or liabilities for which there are unobservable inputs to thevaluation methodology that are significant to the measurement of the fair value ofthe assets or liabilities.

The carrying amount of cash and cash equivalents, short-term investments, accountsreceivable due from third parties, accounts receivable due from Alibaba, accountsreceivable due from other related parties, amount due from/to SINA, accounts payable,accrued and other liabilities approximates fair value because of their short-term nature.See Note 15 Fair Value Measurement for additional information.

Long-term investments

Long-term investments are comprised of investments in publicly traded companies,privately held companies, and limited partnerships. The Group uses the equity method toaccount for ordinary-share-equivalent equity investments on which it has significantinfluence but does not own a majority equity interest or otherwise control.


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Long-term investments (continued)

Before the adoption of ASU 2016-01 in 2018, the Group used cost method to account forequity investments over which the Group does not have significant influence, or theinvestments in which the Group holds equity shares that are not common shares/in-substance common share without readily determinable fair value. For marketable equitysecurities, the Group reported them at fair value and accounted for them as available-for-sale (“AFS”) securities under long-term investments.

After adopting ASU 2016-01 on January 1, 2018, the Group measures investments inequity securities, other than equity method investments, at fair value through earnings.For those investments without readily determinable fair values, the Group elects to recordthese investments at cost, less impairment, and plus or minus subsequent adjustments forobservable price changes. Under this measurement alternative, changes in the carryingvalue of the investments will be recognized in consolidated statement of comprehensiveincome, whenever there are observable price changes in orderly transactions for theidentical or similar investment of the same issuer.

The marketable equity securities were reclassified as investments with readilydeterminable fair values under the ASU 2016-01. There will no longer be an available-for-sale classification for equity securities. The cumulative effects of applying theguidance to the Group’s consolidated balance sheets were the reclassification ofunrealized loss of $1.0 million from accumulated other comprehensive income to retainedearnings as of January 1, 2018.

Due to the adoption of ASU 2016-01, the AFS was reclassified to investment with readilydeterminable fair values beginning January 1, 2018, the Group recorded $2.8 million loss,which is unrealized in 2018, and the fair value was $1.5 million as of December 31, 2018.

Pursuant to ASC 321, for equity investments measured at fair value with changes in fairvalue recorded in earnings, the Group does not assess whether those securities areimpaired. For equity investments without readily determinable fair value for which theGroup has elected to use the measurement alternative, the Group makes a qualitativeassessment of whether the investment is impaired at each reporting date, applyingsignificant judgement in considering various factors and events including a) adverseperformance of investees; b) adverse industry developments affecting investees; and c)adverse regulatory, social, economic or other developments affecting investees. If aqualitative assessment indicates that the investment is impaired, the Group estimates theinvestment’s fair value in accordance with the principles of ASC 820. If the fair value isless than the investment’s carrying value, the Group recognizes an impairment loss in netincome equal to the difference between the carrying value and fair value. Significantjudgment is applied by the Group in estimating the fair value to determine if animpairment exists, and if so, to measure the impairment losses for these equity securityinvestments. These judgments include the selection of valuation methods in estimatingfair value and the determination of key valuation assumptions used, which comprised thecash flow forecasts and critical assumptions used in cash flow forecasts, such as theinvestees’ revenue growth rate, terminal growth rate, discount rate, selection ofcomparable companies and multiples, estimated volatility rate and discount for lack ofmarketability.


– IA-33 –




Investments in entities over which the Group can exercise significant influence and holdsan investment in voting common shares or in-substance common shares (or both) of theinvestee but does not own a majority equity interest or control are accounted for using theequity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment— Equity Method and Joint Ventures. Under the equity method, the Group initiallyrecords its investments at cost and the difference between the cost of the equity investeeand the fair value of the underlying equity in the net assets of the equity investee isrecognized as equity method goodwill, which is included in the equity method investmenton the consolidated balance sheets. The Group subsequently adjusts the carrying amountof the investments to recognize the Group’s proportionate share of each equity investee’snet income or loss into earnings after the date of investment. The Group evaluates theequity method investments for impairment under ASC 323. An impairment loss on theequity method investments is recognized in earnings when the decline in value isdetermined to be other-than-temporary.

In January 2020, the FASB issued ASU No. 2020-01, Investments — Equity Securities(Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), andDerivatives and Hedging (Topic 815) — Clarifying the Interactions between Topic 321,Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). Theamendments in this update clarify the interaction of the accounting for equity securitiesunder Topic 321 and investments accounted for under the equity method of accounting inTopic 323 and the accounting for certain forward contracts and purchased optionsaccounted for under Topic 815. For public business entities, the amendments in thisUpdate are effective for fiscal years beginning after December 15, 2020, and interimperiods within those fiscal years. For all other entities, the amendments are effective forfiscal years beginning after December 15, 2021, and interim periods within those fiscalyears. Early adoption is permitted. The Group adopted the ASU on January 1, 2021, whichdid not have a material impact on the consolidated financial statements.

Business combination

Business combinations are recorded using the purchase method of accounting, and thecost of an acquisition is measured as the aggregate of the fair values at the date ofexchange of the assets given, liabilities incurred, and equity instruments issued as well asthe contingent considerations and all contractual contingencies as of the acquisition date.The costs directly attributable to the acquisition are expensed as incurred. Identifiableassets, liabilities and contingent liabilities acquired or assumed are measured separatelyat their fair value as of the acquisition date, irrespective of the extent of anynon-controlling interests. The excess of the (i) the total of consideration paid, fair valueof the non-controlling interests and acquisition date fair value of any previously heldequity interest in the subsidiary acquired over (ii) the fair value of the identifiable netassets of the subsidiary acquired is recorded as goodwill. If the consideration ofacquisition is less than the fair value of the net assets of the subsidiary acquired, thedifference is recognized directly in the consolidated statements of comprehensive income.


– IA-34 –



Leases

Prior to the adoption of ASC 842 in 2019, the Group accounted for leases under ASC 840,Leases. The Group leases office space under operating lease agreements with variousexpiration dates. Rental expense is recognized from the date of initial possession of theleased property on a straight-line basis over the term of the lease, part of which wasallocated from SINA. Certain lease agreements contain rent holidays, which arerecognized on a straight-line basis over the lease term. Lease renewal periods areconsidered on a lease-by-lease basis and are generally not included in the initial leaseterms.

In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases(Topic 842)”, which requires a lessee to recognize assets and liabilities arising fromoperating leases. A lessee should recognize a liability to make lease payments (the LeaseLiability) and a right-of-use asset (the Operating Lease Assets) representing its right touse the underlying asset for the lease term. For leases with a term of twelve months orless, a lessee is permitted to make an accounting policy choice not to recognize leaseassets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11,which provides another transition method in addition to the existing transition methods byallowing entities to initially apply the new leases standard at the effective date andrecognize a cumulative-effect adjustment to the opening balance of retained earnings inthe period of adoption and to not retrospectively adjust prior periods financial statements.

On January 1, 2019, the Group adopted the new lease standard using the transition methodby applying the standard to all leases existing at the date of initial application. The Groupchose to not recognize lease assets and lease liabilities for leases with a term of twelvemonths or less, to not separate non-lease components from lease components, and to notreassess lease classification, treatment of initial direct costs or whether an existing orexpired contract contains a lease according to the practical expedients permitted under thetransition method.

The Group did not retrospectively adjust the prior comparative periods. Under the newlease standard, the Group determines if an arrangement is or contains a lease at inception.Right-of-use assets and liabilities are recognized at lease commencement date based onthe present value of remaining lease payments over the lease terms. The Group considersonly payments that are fixed and determinable at the time of lease commencement. Theadoption of new leasing guidance resulted in recognition of $14.4 million of operatinglease assets and $14.9 million of leasing liabilities as of January 1, 2019, respectively, andno impact to the beginning retained earnings of the year.


– IA-35 –



Long-lived assets


Property and equipment are stated at cost less accumulated depreciation, amortization andimpairment, if any. Depreciation is computed using the straight-line method over theestimated useful lives of the assets, generally from three to four years for computers andequipment and five years for furniture and fixtures. Leasehold improvements areamortized over the shorter of the estimated useful lives of the assets or the remaininglease term. Depreciation expenses were $18.5 million, $22.4 million, $26.5 million, $12.0million and $16.1 million for the years ended December 31, 2018, 2019 and 2020 and sixmonths ended June 30, 2020 and 2021, respectively.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiableassets and liabilities acquired as a result of the Group’s acquisitions of interests in itssubsidiaries, consolidated VIEs and VIEs’ subsidiaries. The Group assesses goodwill forimpairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles —Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment atthe reporting unit level at least annually and more frequently upon the occurrence ofcertain events, as defined by ASC 350-20. The guidance provides the option that theGroup may first assess qualitative factors to determine whether it is necessary to performthe quantitative goodwill impairment test, by taking into consideration ofmacroeconomics, overall financial performance, industry and market conditions and theshare price of the Group. If determined to be necessary, the quantitative impairment testshall be used to identify goodwill impairment and measure the amount of a goodwillimpairment loss to be recognized (if any). Application of a goodwill impairment testrequires significant management judgment, including the identification of reporting units,assigning assets and liabilities to reporting units, assigning goodwill to reporting units,and determining the fair value of each reporting unit. Judgment in estimating the fairvalue of reporting units includes estimating future cash flows, determining appropriatediscount rates and making other assumptions. Changes in these estimates and assumptionscould materially affect the determination of fair value for each reporting unit. During2018, impairment indicators were identified by the Group for the game related reportingunit including adversely policy change on game industry and failure to meet forecastedfinancial performance supporting the goodwill without prospect of future recovery. Themanagement fully impaired the goodwill arising from acquisition of several gamebusiness amounting $10.6 million as the management expect it’s hard for the gamebusiness to recover. For the years ended December 31, 2019, 2020 and six months endedJune 30, 2020 and 2021, no impairment indicator was noted by performing qualitativeanalysis, therefore, no provision was recorded.


Intangible assets arising from acquisitions are recognized at fair value upon acquisitionand amortized on a straight-line basis over their estimated useful lives, generally fromthree to ten years. Long-lived assets and certain identifiable intangible assets other thangoodwill to be held and used are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of such assets may not be recoverable.


– IA-36 –



Long-lived assets (continued)

Intangible assets other than goodwill (continued)

Determination of recoverability is based on an estimate of undiscounted future cash flowsresulting from the use of the asset and its eventual disposition. Measurement of anyimpairment loss for long-lived assets and certain identifiable intangible assets thatmanagement expects to hold or use is based on the amount by which the carrying valueexceeds the fair value of the asset. Judgment is used in estimating future cash flows,determining appropriate discount rates and making other assumptions. Changes in theseestimates and assumptions could materially affect the determination of the asset’s fairvalue.


The Group determines the appropriate accounting treatment of its convertible debt inaccordance with the terms in relation to the conversion feature. After considering theimpact of such features, the Group may account for such instrument as a liability in itsentirety, or separate the instrument into debt and equity components following therespective guidance described under ASC 815 Derivatives and Hedging and ASC 470Debt.

The debt discount, if any, together with related issuance cost are subsequently amortizedas interest expense over the contractual life. The Group presented the issuance costs ofdebt as a direct deduction from the related debt during the periods presented.

The unsecured senior notes are recognized initially at fair value, net of debt discounts orpremiums, if any, issuance costs and other incidental fees, all of which are recorded as adirect deduction of the proceeds received from issuing the unsecured senior notes and therelated accretion is recorded as interest expense in the consolidated statement ofcomprehensive income over the estimated term using the effective interest method.

Deferred revenues

Deferred revenues consist of contractual billings in excess of recognized revenue andpayments received in advance of revenue recognition, which are mainly from thecustomer advance of the advertising and marketing services and the sales of the fee-basedservices, such as VIP membership, live streaming, and virtual currency or in-game virtualitems sold for game related services.

Non-controlling interests

For the Company’s majority-owned subsidiaries and VIEs, non-controlling interests arerecognized to reflect the portion of their equity that is not attributable, directly orindirectly, to the Company as the controlling shareholder. To reflect the economic interestheld by non-controlling shareholders, net income/loss attributable to the non-controllingordinary shareholders is recorded as non-controlling interests in the Company’sconsolidated statements of comprehensive income. Non-controlling interests are


– IA-37 –



Non-controlling interests (continued)

classified as a separate line item in the equity section of the Company’s consolidatedbalance sheets and have been separately disclosed in the Company’s consolidatedfinancial statements to distinguish the interests from that of the Company.

Foreign currency

The Company’s reporting currency and functional currency are the U.S. dollar. TheGroup’s operations in China and in international regions use their respective currenciesas their functional currencies. The financial statements of these subsidiaries are translatedinto U.S. dollars using period-end rates of exchange for assets and liabilities and averagerates of exchange in the period for revenues, costs and expenses. Translation gains andlosses are recorded in accumulated other comprehensive income (loss) as a component ofshareholders’ equity. Translation gains or losses are not released to net income unless theassociated net investment has been sold, liquidated, or substantially liquidated.

Foreign currency transactions denominated in currencies other than the functionalcurrency are translated into the functional currency using the exchange rate prevailing onthe transactions dates. Monetary assets and liabilities denominated in foreign currenciesare translated into the functional currency using the applicable exchange rates at thebalance sheet dates. Net gains and losses resulting from foreign exchange transactions areincluded in interest and other income, net.

Foreign currency translation adjustments included in the Group’s consolidated statementsof comprehensive income for the years ended December 31, 2018, 2019 and 2020 and sixmonths ended June 30, 2020 and 2021 were a loss of $60.3 million, a loss of $19.0million, a gain of $148.5 million, a loss of $31.3 million and a gain of $29.2 millionrespectively. Net foreign currency transaction gains or losses arise from transacting in acurrency other than the functional currency of the entity and the amounts recorded wereimmaterial for each of the periods presented.

Net income per share

Basic net income per share is computed using the weighted average number of ordinaryshares outstanding during the period. Options and RSUs are not considered outstandingin computation of basic earnings per share. Diluted net income per share is computedusing the weighted average number of ordinary shares and potential ordinary sharesoutstanding during the period, which include options to purchase ordinary shares,restricted share units and conversion of the convertible debt. The computation of dilutednet income per share does not assume conversion, exercise, or contingent issuance ofsecurities that would have an anti-dilutive effect (i.e. an increase in earnings per shareamounts or a decrease in loss per share amounts) on net income per share. The Group usesthe two-class method to calculate net income per share though both classes share the samerights in dividends. Therefore, basic and diluted earnings per share are the same for bothclasses of ordinary shares.


– IA-38 –



Segment reporting

In accordance with ASC 280, Segment Reporting, the Group’s chief operating decisionmaker (“CODM”), the Chief Executive Officer, reviews the consolidated results whenmaking decisions about allocating resources and assessing performance of the Group asa whole. The Group currently operates and manages its business in two principal businesssegments globally — advertising and marketing services and value-added services.Information regarding the business segments provided to the Group’s CODM is at therevenue level and the Group currently does not allocate operating costs or assets to itssegments, as its CODM does not use such information to allocate resources or evaluatethe performance of the operating segments. As the Group’s long-lived assets aresubstantially all located in the PRC and substantially the Group’s revenues are derivedfrom within the PRC, no geographical information is presented.

Concentration of risks

Concentration of credit risk. The Group’s financial instruments that are potentiallysubject to concentrations of credit risk consist primarily of cash, cash equivalents,short-term investments and accounts receivable. In addition, with the majority of itsoperations in China, the Group is subject to RMB currency risk and the risk of remittanceof currency out of PRC, both of which have been difficult to hedge and the Group has notdone so. The Group limits its exposure to credit loss by depositing its cash and cashequivalents with financial institutions in the U.S., PRC and Hong Kong, which are amongthe largest and most respected with high ratings by international-recognized ratingagencies, that the management believes are of high credit quality. The managementperiodically reviews these institutions’ reputations, track records and reported reserves.

As of December 31, 2018, 2019 and 2020 and June 30, 2021, the Group hadapproximately $1.7 billion, $2.2 billion, $3.0 billion and $2.4 billion, respectively, in cashand bank time deposits (with terms generally up to twelve months) with large domesticbanks in China. China promulgated a Bankruptcy Law that came into effect on June 1,2007, which contains a separate article expressly stating that the State Council maypromulgate implementation measures for the bankruptcy of Chinese banks based on theBankruptcy Law. Under the Bankruptcy Law, a Chinese bank may go bankrupt. Inaddition, since China’s concession to WTO, foreign banks have been gradually permittedto operate in China and have become significant competitors to Chinese banks in manyaspects, especially since the opening of RMB business to foreign banks in late 2006.Therefore, the risk of bankruptcy on Chinese banks in which the Group holds cash andbank deposits has increased. In the event that a Chinese bank which holds the Group’sdeposits goes bankrupt, the Group is unlikely to claim its deposits back in full, since itis unlikely to be classified as a secured creditor to the bank under the PRC laws.


– IA-39 –



Concentration of risks (continued)

Alibaba as an advertiser accounted for 7%, 6%, 9%, 9% and 7% of the Group’s totalrevenues for the years ended December 31, 2018, 2019 and 2020 and six months endedJune 30, 2020 and 2021, respectively. No other customer nor advertising agencyindividually represented 10% or more of the Group’s total revenues during the yearsended December 31, 2018, 2019 and 2020 and six months ended June 30, 2020 and 2021.Additionally, the Group’s top 10 advertising agencies contributed 26%, 28%, 32%, 33%and 38% to its total revenues for the years ended December 31, 2018, 2019 and 2020 andsix months ended June 30, 2020 and 2021, respectively.

As of December 31, 2018, 2019, 2020 and as of June 30, 2021, substantially all accountsreceivable were derived from the Group’s China operations. Excluding accountsreceivable due from Alibaba and other related parties, accounts receivable primarilyconsists of amounts due from advertising agencies and direct customers. Alibabaaccounted for 13%, 14%, 28% and 19%, of the Group’s net accounts receivables as ofDecember 31, 2018, 2019, 2020 and as of June 30, 2021, respectively.

Concentration of foreign currency risks. The majority of the Group’s operations were inRMB. As of December 31, 2018, 2019, 2020 and as of June 30, 2021, the Group’s cash,cash equivalents and short-term investments balance denominated in RMB was $950.8million, $936.9 million, $1,651.3 million and $1,451.6 million, accounting for 52%, 39%,47% and 49% of the Group’s total cash, cash equivalents and short-term investmentsbalance at the respective dates. As of December 31, 2018, 2019, 2020 and as of June 30,2021, the Group’s aggregate net accounts receivable balance (including accountsreceivable due from third parties, Alibaba and other related parties) denominated in RMBwas $368.8 million, $422.2 million $492.0 million and $631.2 million, respectively,representing almost all of its net accounts receivable balance. As of December 31, 2018,2019, 2020 and as of June 30, 2021, the Group’s current liabilities balance denominatedin RMB was $620.4 million, $744.2 million, $947.6 million and $1,064.1 million,accounting for 99%, 93%, 99% and 97% of its total current liabilities balance.Accordingly, the Group may experience economic losses and negative impacts onearnings and equity as a result of exchange rate fluctuations of the RMB against the U.S.dollars. Moreover, the Chinese government imposes controls on the convertibility of theRMB into foreign currencies and, in certain cases, the remittance of currency out of thePRC. The Group may experience difficulties in completing the administrative proceduresnecessary to remit its RMB out of the PRC and convert it into foreign currency.


– IA-40 –



Recent accounting pronouncements

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation — StockCompensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s OwnEquity (Subtopic 815-40) to clarify and reduce diversity in an issuer’s accounting formodifications or exchanges of freestanding equity-classified written call options (forexample, warrants) that remain equity classified after modification or exchange. Theamendments in this update are effective for all entities for fiscal years beginning afterDecember 15, 2021, including interim periods within those fiscal years. An entity shouldapply the amendments prospectively to modifications or exchanges occurring on or afterthe effective date of the amendments. The ASU is currently not expected to have amaterial impact on the consolidated financial statements.

3. Cash, Cash Equivalents and Short-term Investments

Cash, cash equivalents and short-term investments consist of the following:


June 30,

2018 2019 2020 2021

(In thousands)

Cash and cash equivalents:Cash $1,234,596 $1,452,985 $1,814,844 $2,005,106

Short-term investments:Bank time deposits 591,269 951,235 1,515,880 750,467Wealth management

products – – 166,168 180,355

Subtotal 591,269 951,235 1,682,048 930,822

Total cash, cash equivalentsand short-term investments $1,825,865 $2,404,220 $3,496,892 $2,935,928

The carrying amounts of cash, cash equivalents and short-term investments approximatefair value. Interest income was $58.0 million, $85.4 million, $85.8 million, $45.6 millionand $40.1 million for the years ended December 31, 2018, 2019, 2020 and six monthsended June 30, 2020 and 2021, respectively. The maturity dates for the bank time depositsand wealth management products were within one year.


– IA-41 –


4. Long-term Investments

Long-term investments comprised of investments in publicly traded companies, privatelyheld companies, and limited partnerships. The following sets forth the changes in theGroup’s long-term investments:

CostMethod/Equity

SecuritiesWithout Readily

DeterminableFair Values Equity Method

Available-for-Sale

Securities/EquitySecurities With

ReadilyDeterminableFair Values Total

(In thousands)

Balance at December 31, 2017 $ 420,356 $ 27,702 $ 4,279 $ 452,337Investments made/transferred from prepayments 134,797 97,337 – 232,134Income (loss) from equity method investments – 57 – 57Dividend received from equity method investments – (657) – (657)Disposal of investments – (1,623) – (1,623)Impairment on investments (23,557) – – (23,557)Fair value change through earnings

(including adjustment of subsequent price changes) 42,877 – (2,803) 40,074Currency translation adjustment (3,854) (325) – (4,179)

Balance at December 31, 2018 $ 570,619 $122,491 $ 1,476 $ 694,586Investments made/transferred from prepayments 268,734 91,869 15,017 375,620Income (loss) from equity method investments – (13,198) – (13,198)Dividend received from equity method investments – (932) – (932)Disposal of investments (1,724) (165) – (1,889)Reclassification of equity investment without readily

determinable fair values to those with readilydeterminable fair values (81,385) – 81,385 –

Impairment on investments (230,859) – – (230,859)Fair value change through earnings (including

adjustment of subsequent price changes) 35,838 – 171,600 207,438Currency translation adjustment (2,621) (686) – (3,307)

Balance at December 31, 2019 $ 558,602 $199,379 $269,478 $1,027,459Investments made/transferred from prepayments 134,925 92,925 30,500 258,350Income (loss) from equity method investments – 10,434 – 10,434Dividend received from equity method investments – (320) – (320)Disposal of investments (2,067) – (48,334) (50,401)Impairment on investments (126,820) – – (126,820)Fair value change through earnings (including

adjustment of subsequent price changes) (2,462) – 37,577 35,115Currency translation adjustment 16,906 8,743 – 25,649

Balance at December 31, 2020 $ 579,084 $311,161 $289,221 $1,179,466Investments made/transfers from prepayments 47,957 103,932 – 151,889Income (loss) from equity method investments – 13,605 – 13,605Dividend received from equity method investments – (2,880) – (2,880)Disposal of investments (16,883) – (4,946) (21,829)Changes from measurement alternative to

consolidation (Note 6) (66,415) – – (66,415)Impairment on investments (66,625) – – (66,625)Fair value change through earnings (including

adjustment of subsequent price changes) (26,810) – (42,685) (69,495)Currency translation adjustment 3,150 2,392 – 5,542

Balance at June 30, 2021 $ 453,458 $428,210 $241,590 $1,123,258


– IA-42 –


4. Long-term Investments (continued)

In the second quarter of 2021, the Group obtained control of its investment in an investeeoperating a leading mobile photo and video application in China, Wuta application,through a step acquisition of consideration of $39.5 million. The Group recorded $27.6million fair value change loss for the equity interest previously held by the Groupimmediately prior to the step acquisition. The impact of the transaction was reflected inthe changes from measurement alternative to consolidation.

For the years ended December 31, 2018, 2019, 2020 and six months ended June 30, 2021,the Group invested in private high-tech companies totaling $134.8 million, $268.7million, $134.9 million and $48.0 million, respectively, which were accounted for underinvestments without readily determinable fair values. These investments were to furtherexpand and strengthen the Group’s ecosystem and mainly included an investment of $72.7million in an investee in e-commerce business and an investment of $21.8 million in acompany engaged in creating and providing unique online cartoon content in 2018, afollow-on investment of $100.0 million in Yixia Tech Co., Ltd. (“Yixia Tech”), adeveloper of mobile video apps in 2019, an investment of $46.8 million in a financingguarantee company and an investment of $30.6 million in a commercial search businessin 2020, as well as a further investment of $39.5 million in a leading mobile photo andvideo application in China for the six months ended June 30, 2021, which was mentionedabove. The follow-on investment in Yixia Tech resulted in an aggregate investment in thecompany of $290.0 million prior to the $214.7 million impairment recognized in 2019 asdescribed below. The Group also invested $97.3 million, $91.9 million, $92.9 million and$103.9 million in companies, which were accounted for under equity method, in 2018,2019, 2020 and for the six months ended June 30, 2021, respectively. These investmentsmainly included $93.0 million investments in two funds in 2018, a $57.4 millioninvestment in a company providing consumer finance services in 2019, severalinvestment funds in 2020 and an additional investment of $60.0 million in an investmentfund for the six months ended June 30, 2021.

The Group used measurement alternative for recording equity investments without readilydeterminable fair values at cost, less impairment, adjusted for subsequent observableprice changes. Based on ASU 2016-01, entities that elect the measurement alternative willreport changes in the carrying value of the equity investments in current earnings. Ifmeasurement alternative is used, changes in the carrying value of the equity investmentwill be recognized whenever there are observable price changes in orderly transactionsfor the identical or similar investment of the same issuer, and impairment charges will berecorded when any impairment indicators are noted and the fair value is lower than thecarrying value. The Group classifies the valuation techniques on investments that usesimilar identifiable transaction prices as Level 2 of fair value measurements.


– IA-43 –



The following table summarizes the total carrying value of the equity investmentsaccounted for under measurement alternative as of December 31, 2018, 2019, 2020 andas of June 30, 2021, respectively, including cumulative upward and downwardadjustments made to the initial cost basis of the securities (in thousands):

CumulativeResults

Initial cost basis $ 555,153Upward adjustments 42,877Downward adjustments (impairment only) (23,557)Foreign currency translation (3,854)

Total carrying value at December 31, 2018 $ 570,619

Initial cost basis $ 738,035Upward adjustments 81,458Downward adjustments (impairment only) (254,416)Foreign currency translation (6,475)


Initial cost basis $ 870,893Upward adjustments 81,458Downward adjustments (383,698)Foreign currency translation 10,431



Total carrying value at June 30, 2021 $ 453,458

As of June 30, 2021, investment in Didi Global Inc. (“Didi”) amounting to $142.0 millionwas accounted for under measurement alternative. Didi completed its initial publicoffering and its shares started trading on July 1, 2021, China time. Therefore, investmentin Didi was transferred from measurement alternative to equity securities with readilydeterminable fair value from July 1, 2021, with the fair value determined based on thequoted prices in active market.


– IA-44 –



The Group assessed or engaged independent valuation firms to help the managementassess the fair value of certain investments as of December 31, 2018, 2019, 2020 and June30, 2021, using Level 3 of fair value measurements and concluded that the impairmentwas warranted for those investments at the periods end. Thus, the Group recognized $23.6million, $230.9 million, $126.8 million, $2.5 million and $66.6 million impairmentcharges to investments without readily determinable fair values for the years endedDecember 31, 2018, 2019, 2020 and six months ended June 30, 2020 and 2021,respectively. The impairment charges mainly included an $11.9 million write-off on anonline-reading business and a $9.7 million write-off on a company operating in gamebusiness in 2018, a partial impairment of $214.7 million on Yixia Tech in 2019, a partialimpairment of $59.8 million on an investee in e-commerce business as well as a $39.3million write-off on a game company in 2020, and a partial impairment of $59.4 millionon Yixia Tech for the six months ended June 30, 2021, due to their unsatisfied financialperformance with no obvious upturn or potential financing solutions in the foreseeablefuture.

Investments in marketable equity securities are valued using the market approach basedon the quoted prices in active markets at the reporting dates. The Group classifies thevaluation techniques that use these inputs as Level 1 of fair value measurements. InDecember 2019, one of the Group’s investees, Beijing Showworld Technology Co., Ltd.(“Showworld”), a company providing social and new media marketing services,completed its listing on Shanghai Stock Exchange through an equity reconstruction witha then-listed company. Before Showworld’s IPO, the Group accounted for the investmentunder equity securities without readily determinable fair values and then reclassified it toinvestments with readily determinable fair values the moment it went public. The Grouprecorded $2.8 million fair value change loss, $171.6 million fair value change gain, $37.6million fair value change gain, $120.3 million fair value change loss and $42.7 millionfair value change loss, which was unrealized, for the years ended December 31, 2018,2019, 2020 and six months ended June 30, 2020 and 2021, respectively.


– IA-45 –



The following table shows the carrying amount and fair value of the marketablesecurities:

Cost Basis

GrossUnrealized

Gains

GrossUnrealized

Losses Fair Value(In thousands)

One marketable security $ 5,274 $ – $ (3,798) $ 1,476

December 31, 2018 $ 5,274 $ – $ (3,798) $ 1,476

Showworld $ 81,385 $176,169 $ – $257,554Other marketable securities 20,292 513 (8,881) 11,924

December 31, 2019 $101,677 $176,682 $ (8,881) $269,478

Showworld $ 81,385 $204,675 $ – $286,060Other marketable securities 15,274 – (12,113) 3,161

December 31, 2020 $ 96,659 $204,675 $(12,113) $289,221

Showworld $ 81,385 $160,205 $ – $241,590

June 30, 2021 $ 81,385 $160,205 $ – $241,590

The Group recorded investment-related impairment of $24.1 million, $249.9 million,$212.0 million, $3.9 million and $66.6 million for the years ended December 31, 2018,2019, 2020 and six months ended June 30, 2020 and 2021, respectively, as a result of theinvestees not performing to expectation or them becoming incapable of makingrepayments. The impairment charged in 2019 included write-offs of prepayments of $19.1million and the partial impairment charge of $214.7 million to the carrying value of YixiaTech, as well as other impairments of $16.2 million. The impairment charged in 2020included a partial impairment of $59.8 million on an investee in e-commerce business, a$39.3 million write-off on a game company, and $82.2 million impairment charge onloans to investees (Note 10), as well as other impairments of $30.7 million. Theimpairment charged for the six months ended June 30, 2021 was mainly caused by apartial impairment of $59.4 million on Yixia Tech.


– IA-46 –


5. Leases

On January 1, 2019, the Group adopted the new lease standard using the transition methodby applying the standard to all leases existing at the date of initial application. Theadoption of new leasing guidance resulted in recognition of $14.4 million of operatinglease assets and $14.9 million of leasing liabilities as of January 1, 2019, respectively, andno impact to the beginning retained earnings of the year.

The Group has operating leases primarily for office spaces in China. The determinationof whether an arrangement is or contains a lease is made at inception by evaluatingwhether the arrangement conveys the right to use an identified asset and whether theGroup obtains substantially all of the economic benefits from and has the ability to directthe use of the asset. Operating lease assets and liabilities are included in operating leaseright-of-use assets, operating lease liabilities, short-term, and operating lease liabilities,long-term on the Group’s consolidated balance sheets. The Group has chosen to notrecognize lease assets and lease liabilities for leases with a term of twelve months or lesson the consolidated balance sheets.

Operating lease right-of-use assets and operating lease liabilities are recognized based onthe present value of lease payments over the lease terms at the lease commencementdates. The Group uses its incremental borrowing rate in determining the present value oflease payments. The incremental borrowing rate is a hypothetical rate based on theGroup’s understanding of what interest the Group would pay in order to obtain aborrowing with an amount equivalent to the lease payments in a similar economicenvironment over the lease term on a collateralized basis from banks in China.

Certain lease agreements contain an option for the Group to renew a lease for a termagreed by the Group and the lessor or an option to terminate a lease earlier than thematurity dates. The Group considers these options, which may be elected at the Group’ssole discretion, in determining the lease term on a lease-by-lease basis. The Group’s leaseagreements generally do not contain any residual value guarantees or material restrictivecovenants. Certain of the Group’s leases contain free or escalating rent payment terms.The Group’s lease agreements generally contain lease and non-lease components.Non-lease components primarily include payments for maintenance and utilities. TheGroup has chosen to combine payments for non-lease components with lease paymentsand accounted them together as a single lease component. Payments under the leasearrangements are primarily fixed. However, for arrangements accounted for as a singlelease component, there may be variability in future lease payments as the amount of thenon-lease components is typically revised from one period to the next. Additionally,certain lease agreements with SINA contain variable payments, which are determinedbased on actual SINA headquarters space occupied by the Group and are expensed asincurred and not included in the operating lease assets and liabilities.


– IA-47 –


5. Leases (continued)

The components of lease costs for the years ended December 31, 2019 and 2020 and sixmonths ended June 30, 2020 and 2021 were as follows:

Year EndedDecember 31,

Six Months EndedJune 30,

2019 2020 2020 2021(Unaudited)

(In thousands)

Operating lease cost $ 4,693 $ 4,902 $2,246 $3,339Short term lease cost 2,663 3,167 1,611 1,921Variable lease cost 4,172 4,479 2,131 2,598

Total lease cost $11,528 $12,548 $5,988 $7,858

Other information related to leases was as follows:

Year EndedDecember 31,

Six Months EndedJune 30,

2019 2020 2020 2021(Unaudited)

(In thousands)

Supplemental Cash FlowsInformation:

Cash paid for amounts includedin the measurement of leaseliabilities:Cash paid for operating leases $(4,683) $(5,522) $(2,589) $(3,938)Operating lease assets obtained

in exchange for operatinglease liabilities $ 944 $ 1,675 $ – $ 8,287

Maturities of lease liabilities under operating leases as of June 30, 2021 were as follows:

Twelve Months Ended June 30, 2021 (In thousands)

2022 $ 6,0202023 2,0202024 1,6122025 1,4342026 and thereafter 1,714

Total future payments for recognized leasing assets $12,800

Less: imputed interest 1,052

Total lease liabilities $11,748


– IA-48 –



As of June 30, 2021, operating leases recognized in lease liabilities have averageremaining lease terms of 3.6 years and weighted-average discount rate of 5%. As ofJune 30, 2021, the Group had no lease contract that has been entered into but not yetcommenced.

6. Acquisitions, Goodwill and Intangible Assets

On October 1, 2018, the Group entered into a series of business and asset transferagreements with Yixia Tech to acquire the whole of the live streaming business ofYizhibo, which was previously operated by Yixia Tech. The acquisition included theYizhibo APP and related assets/technology, employees and business contracts with a cashconsideration of $50 million. The Group paid $40 million consideration payable to YixiaTech in 2018 and settled the rest $10 million in 2019 (Note 10). The Group engaged anindependent valuation firm to help management determine the value of assets andliabilities from the acquisition. Total identifiable intangible assets acquired on acquisitiondate included supplier-relationship of $9.7 million with estimated useful life of five years,core technology of $6.6 million with estimated useful life of eight years, and trademarkand domain name of $5.6 million with estimated useful life of ten years. In addition, therewas no acquisition in 2019.

The consideration of acquisition of Yizhibo was allocated based on the fair value of theassets acquired and the liabilities assumed as follows:

As ofOctober 1,

2018

(In thousands)

Consideration $50,000

Property and equipment, net $ 466Identifiable intangible assets acquired 21,942Other tangible assets 2,874Liabilities assumed (2,434)Goodwill 27,152

Total $50,000

The acquisition mentioned above resulted in an increase of $28.0 million to revenues andan immaterial impact to net income for 2018. Since it did not have a material impact onthe Group’s consolidated financial statements, pro forma disclosures have not beenpresented.


– IA-49 –


6. Acquisitions, Goodwill and Intangible Assets (continued)

On October 31, 2020, the Group entered into a series of share purchase agreements withthen existing shareholders of Shanghai Jiamian Information Technology Co., Ltd. or JMTech, which provides online interactive entertainment services, to acquire the majority ofJM Tech’s equity interest, with a total consideration of $218.6 million. The Group alsoentered into a contingent payment arrangement and a contingent allocation arrangementover JM Tech’s earnings with the founder and CEO of the company, both of which aresubject to a service period through December 31, 2022 and certain performanceconditions. The Group accounted for these arrangements as compensation expenses overthe required service period when it is probable that the performance conditions will bemet. The transaction was reflected in the Group’s consolidated financial statements fromNovember 1, 2020. An independent valuation firm was engaged by the Group to help themanagement determine the fair value of assets and liabilities obtained from thetransaction. The identifiable intangible assets acquired on acquisition date includedlaunched games and products in development stage of $124.2 million with estimated livesranging from four to ten years. The intangible assets were measured at fair value uponacquisition primarily using valuation techniques under the income approach. Keyassumptions used in determining the fair value of these intangible assets include cashflow forecasts, the revenue growth rates and the discount rate.

The consideration of acquisition of JM Tech was allocated based on the fair value of theassets acquired and the liabilities assumed as follows:

As ofOctober 31,

2020

(In thousands)

Consideration $218,590Redeemable non-controlling interest (Note 18) 55,192Non-controlling interest 16,133

Total $289,915

Short-term investments acquired $155,205Other assets acquired 26,087Identifiable intangible assets acquired 124,196Goodwill 30,075Liabilities assumed (45,648)

Total $289,915

JM Tech contributed $11.5 million of revenues and $7.2 million of net income to theGroup in 2020. Since it did not have a material impact on the Group’s consolidatedfinancial statements, pro forma disclosures have not been presented.


– IA-50 –



In the second quarter of 2021, the Group acquired another 51.2% equity interest of aninvestee operating a leading mobile photo and video application in China, Wutaapplication, in which the Group previously held 34.8% equity interest, with a cashconsideration of $39.5 million. The Group obtained the control and held 86% equityinterest in the investee upon completion of the transaction on May 1, 2021. Anindependent valuation firm was engaged by the Group to help the management determinethe fair value of assets and liabilities obtained from the transaction. The identifiableintangible assets acquired on acquisition date included user base, domain names andoperating system of $16.5 million with estimated lives ranging from three to ten years.The intangible assets were measured at fair value upon acquisition primarily using royaltysavings method, multi-periods excess earning model and cost approach. Key assumptionsused in determining the fair value of these intangible assets include cash flow forecasts,the revenue growth rates, the discount rate, the customer attrition rate and replacementscosts.

The consideration of acquisition of the mobile app company was allocated based on thefair value of the assets acquired and the liabilities assumed as follows:

As ofMay 1,

2021

(In thousands)

Consideration $39,540Fair value of previously held equity interest 26,875Non-controlling interest 10,811

Total 77,226

Cash and short-term investments acquired 5,786Other assets acquired 6,801Identifiable intangible assets acquired 16,495Goodwill 51,034Liabilities assumed (2,890)

Total $77,226

The acquisition mentioned above resulted an immaterial impact to revenues and netincome for the six months ended 2021. Since it did not have a material impact on theGroup’s consolidated financial statements, pro forma disclosures have not been presented.Apart from what have been mentioned above, there was no acquisition during the sixmonths ended June 30, 2021.


– IA-51 –



The following sets forth the changes in the Group’s goodwill by segment:

Advertising&

MarketingValue-added

services Total

(In thousands)

Balance as of December 31, 2017 $ 2,318 $ 11,102 $ 13,420Acquisition of Yizhibo 27,152 – 27,152Impairment – (10,554) (10,554)Currency translation adjustment (124) (548) (672)

Balance as of December 31, 2018 $29,346 $ – $ 29,346Currency translation adjustment (357) – (357)

Balance as of December 31, 2019 $28,989 $ – $ 28,989Acquisition of JM Tech – 30,075 30,075Currency translation adjustment 1,910 738 2,648

Balance as of December 31, 2020 $30,899 $ 30,813 $ 61,712Acquisition of the company operating

Wuta application 51,034 – 51,034Currency translation adjustment 499 359 858

Balance as of June 30, 2021 $82,432 $ 31,172 $113,604

The Group performs at least annually a qualitative analysis on the goodwill arising fromacquisitions taking into consideration the events and circumstances listed in ASC350Intangibles — Goodwill and Other, including consideration of macroeconomic factors,industry and market conditions, share price of the Group, and overall financialperformance, in addition to other entity-specific factors. During 2018, impairmentindicators were identified by the Group for the game related reporting unit includingadversely policy change on game industry and failure to meet forecasted financialperformance supporting the goodwill without prospect of future recovery. Themanagement fully impaired the goodwill arising from acquisition of several gamebusiness amounting $10.6 million as the management expect it’s hard for the gamebusiness to recover. For the years ended December 31, 2019, 2020 and six months endedJune 30, 2020 and 2021, no impairment indicator was noted by performing qualitativeanalysis, therefore, no provision was recorded.

The increase of the balance in the six months ended June 30, 2021 was mainly due to thegoodwill arising from the acquisition of the company operating Wuta applicationcompleted in the second quarter of 2021.


– IA-52 –



The following table summarizes the Group’s intangible assets arising from acquisitions:

As of December 31, 2018 As of December 31, 2019 As of December 31, 2020 As of June 30, 2021

CostAccumulatedAmortization Net Cost

AccumulatedAmortization Net Cost

AccumulatedAmortization Net Cost

AccumulatedAmortization Net

(In thousands)

Game related $ – $ – $ – $ – $ – $ – $127,238 $ (2,199) $125,039 $128,725 $ (8,905) $119,820Technology 8,978 (2,594) 6,384 8,869 (3,351) 5,518 9,544 (4,417) 5,127 10,012 (4,918) 5,094Trademark and

Domain name 5,623 (147) 5,476 5,555 (724) 4,831 12,788 (1,542) 11,246 19,763 (2,792) 16,971Supplier-relationship 9,738 (495) 9,243 9,619 (2,444) 7,175 10,253 (4,689) 5,564 10,373 (5,798) 4,575Others 2,326 (2,326) – 2,298 (2,298) – 2,449 (2,449) – 13,706 (2,989) 10,717

Total $26,665 $(5,562) $21,103 $26,341 $(8,817) $17,524 $162,272 $(15,296) $146,976 $182,579 $(25,402) $157,177

The amortization expenses for intangible assets were $1.3 million, $3.4 million, $5.7million, $1.6 million and $9.9 million for the years ended December 31, 2018, 2019, 2020and six months ended June 30, 2020 and 2021, respectively. As of June 30, 2021,estimated amortization expenses for future periods are expected as follows:

Year Ended December 31, (In thousands)

The remainder of 2021 $ 11,3482022 22,3472023 20,8582024 19,1912025 and thereafter 83,433

Total expected amortization expenses $157,177

7. Stock-Based Compensation

In March 2014, the Company adopted the 2014 Share Incentive Plan (the “2014 Plan”),which included the remaining 4.6 million shares from the terminated 2010 ShareIncentive Plan, plus an additional 1.0 million shares. On January 1, 2015, shares in the2014 Plan, which has a term life of ten years, were allowed a one-time increase in theamount equal to 10% of the total number of Weibo shares issued and outstanding on afully-diluted basis as of December 31, 2014. Each share in the 2014 Plan pool allows fora grant of a restricted share unit or option share. The Company intends to use such shareincentive plan to attract and retain employee talents. Stock-based compensation related tothe grants is amortized generally over four years on a straight-line basis (generally oneyear for performance-based restricted shares).


– IA-53 –


7. Stock-Based Compensation (continued)

The following table sets forth the stock-based compensation included in each of therelevant accounts:


June 30,2018 2019 2020 2020 2021


Cost of revenues $ 3,522 $ 5,251 $ 5,384 $ 2,502 $ 3,240Sales and marketing 6,837 9,828 9,983 4,263 5,549Product development 21,187 28,628 33,093 14,452 18,213General and

administrative 9,465 17,582 18,645 8,971 9,219

Total $41,011 $61,289 $67,105 $30,188 $36,221

* Excluded non-cash stock-based compensation of $1.6 million to SINA employees charged throughAmount due from SINA for the six months ended June 30, 2021.

The following table sets forth a summary of the number of shares available for issuance:

SharesAvailable

(In thousands)

December 31, 2017 18,540Addition –Granted* (1,597)Cancelled/expired/forfeited 350




June 30, 2021 11,674

* For the years ended December 31, 2018, 2019 and 2020 and six months ended June 30, 2020 and 2021,1.6 million, 2.4 million, 2.5 million, 0.3 million and 1.1 million restricted share units were granted underthe 2014 Plan, respectively. Options of nil, nil, 0.5 million, nil and nil were granted during the yearsended December 31, 2018, 2019 and 2020 and six months ended June 30, 2020 and 2021.


– IA-54 –



Stock Options

The following table sets forth a summary of option activities under the Company’s stockoption program:

OptionsOutstanding

WeightedAverageExercise

Price

WeightedAverage

RemainingContractual

Life

AggregateIntrinsic

Value

(In thousands) (In years) (In thousands)

December 31, 2017 437 $ 3.24 2.0 $43,800Granted – $ –Exercised (248) $ 3.14Cancelled/expired/forfeited (5) $ 1.16

December 31, 2018 184 $ 3.45 1.5 $10,089Granted – $ –Exercised (95) $ 3.41Cancelled/expired/forfeited – $ –

December 31, 2019 89 $ 3.49 0.7 $ 3,799Granted 482 $32.68Exercised (16) $ 3.47Cancelled/expired/forfeited (4) $30.96

December 31, 2020 551 $28.85 5.8 $ 6,683Granted – $ –Exercised (72) $ 3.50Cancelled/expired/forfeited (10) $32.68

June 30, 2021 469 $32.68 6.1 $ 9,342

Vested and expected to vest as ofDecember 31, 2018 184 $ 3.45 1.5 $10,089

Exercisable as of December 31, 2018 184 $ 3.45 1.5 $10,089

Vested and expected to vest as ofDecember 31, 2019 89 $ 3.49 0.7 $ 3,799

Exercisable as of December 31, 2019 89 $ 3.49 0.7 $ 3,799

Vested and expected to vest as ofDecember 31, 2020 503 $28.50 5.7 $ 6,294

Exercisable as of December 31, 2020 72 $ 3.50 0.2 $ 2,707

Vested and expected to vest as ofJune 30, 2021 423 $32.68 6.1 $ 8,428

Exercisable as of June 30, 2021 – $ – – $ –


– IA-55 –



Stock Options (continued)

The total intrinsic value of options exercised for the years ended December 31, 2018,2019 and 2020 and six months ended June 30, 2020 and 2021 was $25.6 million, $4.2million, $0.5 million, $0.3 million and $3.4 million, respectively. The intrinsic value iscalculated as the difference between the market value on the date of exercise and theexercise price of the shares. As reported by the NASDAQ Global Selected Market, theCompany’s ending stock price as of December 31, 2018, 2019 and 2020 and as of June30, 2021 was $58.43, $46.35, $40.99 and $52.62, respectively. Cash received from theexercise of stock options during the years ended December 31, 2018, 2019 and 2020 andsix months ended June 30, 2020 and 2021 was $0.8 million, $0.3 million, $0.1 million,$0.1 million and $0.2 million, respectively.

As of December 31, 2018, 2019, 2020 and June 30, 2021, unrecognized compensationcost, adjusted for estimated forfeitures, related to non-vested stock options granted to theGroup’s employees and directors was nil, nil, $5.4 million and $4.5 million, respectively.As of June 30, 2021, total unrecognized compensation cost is expected to be recognizedover a weighted-average period of 3.1 years and may be adjusted for future changes inestimated forfeitures.

Information regarding stock options outstanding is summarized below:

Range ofExercise Prices

OptionsOutstanding


PriceOptions

Exercisable


Price

WeightedAverage


Life

(Inthousands)

(Inthousands) (In years)

As of December 31, 2018$3.25 – $3.36 32 $ 3.30 32 $3.30 0.8$3.43 – $3.50 152 $ 3.48 152 $3.48 1.7

184 $ 3.45 184 $3.45 1.5

As of December 31, 2019$3.43 – $3.50 89 $ 3.49 89 $3.49 0.7

As of December 31, 2020$3.43 – $3.50 72 $ 3.50 72 $3.50 0.2$32.68 479 $32.68 – $ – –

551 $28.85 72 $3.50 0.2

As of June 30, 2021$32.68 469 $32.68 – $ – –


– IA-56 –



Restricted Share Units

Summary of Performance-Based Restricted Share Units

The following table sets forth a summary of performance-based restricted share unitactivities:

SharesGranted

Weighted-Average Grant

Date FairValue

(In thousands)

December 31, 2017 129 $50.32Awarded 191 $86.63Vested (126) $50.32Cancelled (190) $86.90




June 30, 2021 1 $47.09

As of December 31, 2018, 2019 and 2020, the unrecognized compensation cost (adjustedfor estimated forfeitures) was $0.02 million, $0.4 million and $0.1 million, respectively.As of June 30, 2021, there was no material unrecognized compensation cost (adjusted forestimated forfeitures), which was related to performance-based restricted share unitsgranted to the Company’s employees.


– IA-57 –



Restricted Share Units (continued)

Summary of Service-Based Restricted Share Units

The following table sets forth a summary of service-based restricted share unit activities:

SharesGranted


Date FairValue

(In thousands)

December 31, 2017 3,267 $25.45Awarded 1,406 $68.18Vested (1,757) $21.59Cancelled (160) $44.00



December 31, 2020 4,324 $41.86Awarded 1,097 $46.06Vested (520) $52.65Cancelled (252) $38.98

June 30, 2021 4,649 $41.81

As of December 31, 2018, 2019 and 2020 and as of June 30, 2021, unrecognizedcompensation cost (adjusted for estimated forfeitures) was $112.5 million, $150.7million, $139.6 million and $134.4 million, respectively, which was related to non-vestedservice-based restricted share units granted to the Group’s employees and directors. Thecost was expected to be recognized over a weighted-average period of 3.5 years, 3.2years, 2.9 years and 2.7 years at December 31, 2018, 2019, 2020 and June 30, 2021,respectively. The total fair value based on the vesting date of the restricted share unitsvested was $37.9 million, $51.7 million, $64.2 million and $27.4 million for the yearsended December 31, 2018, 2019, 2020 and six months ended June 30, 2021, respectively.


– IA-58 –


8. Other Balance Sheet Components


June 30,

2018 2019 2020 2021

(In thousands)

Accounts receivable, net:Due from third parties $201,835 $298,752 $343,220 $503,126Due from Alibaba 48,222 60,392 135,321 122,991Due from other related parties 131,465 99,675 48,625 40,972

Total gross amount $381,522 $458,819 $527,166 $667,089

Allowance for credit losses:Balance at the beginning of

the year/period (8,114) (12,429) (36,594) (35,156)Additional provision charged

to expenses, net (6,226) (38,561) (53,124) (10,444)Write-off 1,911 14,396 54,562 9,720

Balance at the end ofthe year/period (12,429) (36,594) (35,156) (35,880)

$369,093 $422,225 $492,010 $631,209

Prepaid expenses and othercurrent assets:Rental and other deposits $ 684 $ 371 $ 1,186 $ 1,169Deductible value-added taxes 4,539 652 598 4,960Investment prepayments(1) 62,561 47,069 15,308 15,487Loans to and interest receivable from

other related parties (Note 10)(2) 43,695 301,526 158,622 336,558Loans to and interest receivable

from third parties(2) – 14,421 41,784 148,891Advertising prepayment 4,575 3,406 18,888 11,907Prepayment to outsourced

service providers 4,730 3,483 3,719 3,727Amounts deposited by users(3) 30,631 34,912 45,745 49,849Content fees 11,021 14,013 3,080 352Others 6,385 5,052 7,827 14,393

$168,821 $424,905 $296,757 $587,293


– IA-59 –


8. Other Balance Sheet Components (continued)


June 30,

2018 2019 2020 2021

(In thousands)

Property and equipment, net:Computers and equipment $124,241 $132,477 $ 165,880 $ 173,498Leasehold improvements 5,008 5,732 6,429 6,924Furniture and fixtures 1,677 1,725 2,159 2,437Others 2,696 3,696 5,077 6,431

Property and equipment, gross 133,622 143,630 179,545 189,290Accumulated depreciation (87,999) (96,901) (118,913) (128,257)

$ 45,623 $ 46,729 $ 60,632 $ 61,033

Other non-current assetsInvestment related deposits(4) $ 1,454 $ 19,388 $ 15,450 $ 408,432Prepayment for purchase of

SINA Plaza(5) – – – 131,636Deferred tax assets 11,908 16,460 27,020 27,279Others 1,564 1,729 2,126 14,998

$ 14,926 $ 37,577 $ 44,596 $ 582,345

Accrued and other liabilities(6):Payroll and welfare $ 69,101 $ 84,394 $ 126,023 $ 138,603Marketing expenses 49,998 77,046 59,410 79,173Sales rebates 95,121 140,629 222,064 312,418Professional fees 8,249 13,437 3,880 7,431VAT and other tax payable 39,446 50,662 49,971 54,744Amounts due to users(3) 30,631 34,912 45,745 49,849Unpaid consideration for acquisition 10,000 – 10,280 –Unpaid consideration for investment – 30,000 19,257 434Interest payable for convertible debt

and unsecured senior notes 1,500 15,344 923 27,579Others 13,391 14,448 19,200 22,159

$317,437 $460,872 $ 556,753 $ 692,390


– IA-60 –



(1) For the years ended December 31, 2018, 2019, 2020 and six months ended June 30, 2021, the Grouprecognized $0.5 million, $19.1 million, $1.5 million and nil of impairment charges on investmentprepayments (all fully impaired), respectively, due to the deterioration of the investees’ operationsresulting in their inability to refund the prepayments.

(2) Loans to related parties and third parties incurred for the years ended December 31, 2018, 2019, 2020and six months ended June 30, 2021 were non-trade in nature.

(3) Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “redenvelopes” and coupons to users and purchase different types of products and services on Weibo,including those offered by the Group, such as marketing services and VIP membership, and thoseoffered by Weibo’s platform partners, such as e-commerce merchandises, financial products and virtualgifts. Amounts deposited by users primarily represent the receivables temporarily held in Weibo’saccount on a third party online payment platform for Weibo wallet users. Amounts due to users representthe balances that are payable on demand to Weibo wallet users and therefore are reflected as currentliability on the consolidated balance sheets.

(4) As of June 30, 2021, investment related deposits primarily included $76.7 million in a micro-loancompany, $79.0 million in an insurance company and $221.9 million in a game company. Thesenon-current assets will be transferred to long-term investment when the legal procedures are completed.

(5) Weibo entered into a letter of intent to purchase the office building (SINA Plaza) from SINA. As of June30, 2021, the balance of prepayment for SINA Plaza was $131.6 million.

(6) Include amounts due to third parties, employees, related parties (Note 10) and Weibo wallet users.


– IA-61 –


9. Income Taxes

The Company is registered in the Cayman Islands and mainly operates in two taxablejurisdictions — the PRC and Hong Kong.

The Group’s income before income taxes is as follows:


June 30,

2018 2019 2020 2020 2021

(Unaudited)(In thousands, except percentage)

Income before incometax expenses $668,842 $ 602,397 $375,913 $306,631 $191,805

Less: Income (loss)from non-Chinaoperations (43,266) (106,256) (57,031) 79,717 (163,411)

Income from Chinaoperations $712,108 $ 708,653 $432,944 $226,914 $355,216

Income tax expenseapplicable to Chinaoperations $ 96,222 $ 88,091 $ 58,464 $ 43,331 $ 66,130

Income tax expense(benefits) applicableto non-Chinaoperations – 21,473 2,852 13,296 (4,275)

Total income taxexpenses $ 96,222 $ 109,564 $ 61,316 $ 56,627 $ 61,855

Effective tax rate forChina operations 13.5% 12.4% 13.5% 19.1% 18.6%

The Company generated the majority of its operating income from PRC operations andhas recorded income tax provisions for the periods presented. Income (loss) fromnon-China operations mainly included stock-based compensation, fair value changesthrough earnings on investments and investment related impairment recorded by theGroup’s non-China subsidiaries. For the years ended December 31, 2018, 2019, 2020 andsix months ended June 30, 2020, the Group’s non-China operations have recognized nil,$21.5 million, $2.9 million and $13.3 million deferred tax charges from fair value changeof investments, respectively, as well as a $4.3 million reversal of previously recognizeddeferred tax charges during the six months ended June 30, 2021.


– IA-62 –


9. Income Taxes (continued)

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to tax onincome or capital gain. In addition, upon payments of dividends by the Company to itsshareholders, no Cayman Islands withholding tax is required.

Hong Kong

Weibo HK is subject to 16.5% Hong Kong profit tax on its taxable income generated fromoperations in Hong Kong for the years of assessment 2017/2018, 2018/2019 and2019/2020. Commencing from the year of assessment 2018/2019, the first HK$2 millionof profits earned by entities incorporated in Hong Kong will be taxed at half the currenttax rate (i.e., 8.25%) while the remaining profits will continue to be taxed at the existing16.5% tax rate. As of December 31, 2018, 2019 and 2020, the Company’s Hong Kongsubsidiary had a net operating loss of $1.4 million, $8.9 million and $10.4 million, whichcan be carried forward indefinitely to offset future taxable income. The deferred tax assetsof Weibo HK as of December 31, 2018, 2019 and 2020 consist mainly of net operatingloss carried forward, for which a full valuation allowance was provided. The managementbelieves it is more likely than not that these assets will not be realized in the future.

China

Effective January 1, 2008, the Enterprise Income Tax Law (the “EIT Law”) in Chinaunifies the enterprise income tax rate for the entities incorporated in China at 25%, unlessthey are eligible for preferential tax treatment. Preferential tax treatments will be grantedto companies conducting businesses in certain encouraged sectors and to entities qualifiedas “software enterprises”, “key software enterprises” (“KSE”) and/or “high and newtechnology enterprise” (“HNTE”). Weibo Technology, the Group’s WFOE, was qualifiedas a “software enterprise” and was entitled to an exemption from the enterprise incometax for two years beginning 2015, its first accumulative profitable year, and a 50%reduction to a tax rate of 12.5% for the subsequent three years (2017-2019). AlthoughWeibo Technology was qualified as a “software enterprise” in 2020, it will not enjoy areduced tax rate for its “software enterprise” status as it has been five years since its firstprofitable year of 2015. Weibo Technology completed its filings as a “key softwareenterprise” with the tax authority in 2018, 2019, and 2020 for its status of 2017, 2018 and2019, respectively, therefore was entitled to enjoy a further reduced preferential tax rateof 10% for 2017, 2018 and 2019. The qualification as a KSE is subject to annualevaluation and approval by the relevant authorities in China and the Group will onlyrecognize the preferential tax treatment of KSE status when approval from the relevantauthorities is obtained, usually one year in arrears. Weibo Technology was also grantedthe HNTEs status for the fiscal years from 2017 to 2022, which entitled the qualifiedentity a preferential tax rate of 15% in 2020 and 2021. Its qualification as a HNTE issubject to annual evaluation and a three-year review by the relevant authorities in China.In addition, certain of the Group’s other PRC entities are also qualified as a “softwareenterprises”, and/or HNTE, and currently enjoy the respective preferential tax treatments.


– IA-63 –



China (continued)

The EIT Law also provides that an enterprise established under the laws of a foreigncountry or region but whose “de facto management body” is located in the PRC be treatedas a resident enterprise for PRC tax purposes and consequently be subject to the PRCincome tax at the rate of 25% for its global income. The Implementing Rules of the EITLaw merely define the location of the “de facto management body” as “the place wherethe exercising, in substance, of the overall management and control of the production andbusiness operation, personnel, accounting, properties, etc., of a non-PRC company islocated.” Based on a review of surrounding facts and circumstances, the Group does notbelieve that it is likely that its operations outside of the PRC be considered a residententerprise for PRC tax purposes. However, due to limited guidance and implementationhistory of the EIT Law, should Weibo be treated as a resident enterprise for PRC taxpurposes, the Company will be subject to PRC tax on worldwide income at a uniform taxrate of 25% retroactive to January 1, 2008.

The EIT Law also imposes a withholding income tax rate of 10% on dividends distributedby a WFOE to its immediate holding company outside of China, if such immediateholding company is considered as a non-resident enterprise without any establishment orplace within China or if the received dividends have no connection with the establishmentor place of such immediate holding company within China, unless such immediateholding company’s jurisdiction of incorporation has a tax treaty with China that providesfor a different withholding arrangement. The Cayman Islands, where the Companyincorporated, does not have such tax treaty with China. According to the arrangementbetween Mainland China and Hong Kong Special Administrative Region on theAvoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006,dividends paid by a WFOE in China to its immediate holding company in Hong Kong willbe subject to withholding tax at a rate of no more than 5% (if the foreign investor ownsdirectly at least 25% of the shares of the WFOE). The State Administration of Taxationfurther promulgated Circular 601 on October 27, 2009, which provides that tax treatybenefits will be denied to “conduit” or shell companies without business substance andthat a beneficial ownership analysis will be used based on a “substance-over-form”principle to determine whether or not to grant the tax treaty benefits.

The operations of the Group’s WFOE in China are invested and held by Weibo HK. If theCompany is regarded as a non-resident enterprise and Weibo HK is regarded as a residententerprise, then Weibo HK may be required to pay a 10% withholding tax on anydividends payable to the Company. If Weibo HK is regarded as a non-resident enterprise,then Weibo Technology may be required to pay a 5% withholding tax for any dividendspayable to Weibo HK. However, it is still unclear at this stage whether Circular 601applies to dividends from Weibo Technology paid to Weibo HK. If Weibo HK were notconsidered as “beneficial owners” of any dividends from Weibo Technology, thedividends payable to Weibo HK would be subject to a withholding tax of 10%. Thecurrent policy approved by the Company’s board of directors allows the Group todistribute PRC earnings offshore only if the Group does not have to pay a dividend tax.As of December 31, 2018, 2019 and 2020 and June 30, 2021, the Group did not recordany withholding tax for its PRC subsidiaries.


– IA-64 –



China (continued)

According to the relevant laws and regulations in the PRC, enterprises engaging inresearch and development activities were entitled to claim 150% of their research anddevelopment expenses incurred as tax deductible expenses when determining theirassessable profits for that year (the “R&D Deduction”). The State TaxationAdministration of the PRC announced in September 2018 that enterprises engaging inresearch and development activities would be entitled to claim 175% of their research anddevelopment expenses as R&D Deduction from January 1, 2018 to December 31, 2020.The Company recorded tax benefit of research and development super deduction ofUS$0.9 million for 2017 in 2018, US$8.5 million for 2018 in 2019, and US$13.2 millionfor 2019 in 2020.

Composition of income tax expenses

The following table sets forth current and deferred portion of income tax expenses of theGroup:

Years Ended December 31,Six Months Ended

June 30,

2018 2019 2020 2020 2021


Deferred taxprovisions (benefits) $ 4,438 $ 16,839 $(15,727) $12,745 $ (5,061)

Current income taxexpenses 91,784 92,725 77,043 43,882 66,916

Income tax expenses $96,222 $109,564 $ 61,316 $56,627 $61,855


– IA-65 –



China (continued)

Reconciliation of the statutory tax rate to the effective tax rate for China operations

The following table sets forth reconciliation between the statutory EIT rate and theeffective tax rate for China operations:

Year Ended December 31,

2018 2019 2020

Statutory EIT rate 25.0% 25.0% 25.0%Effect on tax holiday and preferential

tax treatment(1) (12.1)% (13.7)% (20.9)%Research and development super-

deduction (0.1)% (1.2)% (3.0)%Non-deductible expenses,

non-taxable income and others 0.7% 0.3% (0.5)%Change in valuation allowance –% 2.0% 12.9%

Effective tax rate for China operations 13.5% 12.4% 13.5%

(1) Included the impact of Weibo Technology’s preferential tax treatment of “key software enterprise” statusof 2017 to 2019, which enjoyed by the Group one year in arrears during the three-year period endedDecember 31, 2020, as well as preferential tax treatment benefited by certain other PRC entities.

The provision for income taxes for China operations for the years ended December 31,2018, 2019 and 2020 differs from the amounts computed by applying the statutory EITrate primarily due to the preferential tax treatments described above enjoyed by theWFOE, Weibo Technology, during the periods presented. For the years ended December31, 2018 and 2019, Weibo Technology enjoyed a tax reduction of $77.2 million and $83.2million due to the preferential tax treatment of being a qualified software enterprise. Italso enjoyed a tax reduction of $55.1 million for the HNTE status in 2020. The WFOEfurther recognized preferential tax treatment of “key software enterprise” status and taxbenefit of research and development super deduction of $11.7 million for 2017 in 2018,$21.5 million for 2018 in 2019, and $26.6 million for 2019 in 2020. The Group did notrecognize these tax benefits in the corresponding year as they were uncertain, and onlyrecorded them on a lag basis when the tax benefits become more-likely-than-not to besustained in the next year. The preferential tax treatments benefited by the Group duringthe three-year period ended December 31, 2020 resulted in an effect of $0.39, $0.43 and$0.40 on basic net income per share in 2018, 2019 and 2020, respectively.


– IA-66 –



Deferred tax assets and liabilities

The following table sets forth the significant components of deferred tax assets andliabilities for the Group:


June 30,2018 2019 2020 2021

(In thousands)

Deferred tax assets:Net operating loss carry

forwards $ 4,180 $ 5,515 $ 8,872 $ 8,976Valuation allowance (4,180) (5,515) (8,872) (8,976)Depreciation, investment-

related impairment, accountsreceivable, accrued and otherliabilities 25,327 42,932 107,892 109,154

Valuation allowance (13,419) (26,472) (80,872) (81,875)

Net deferred tax assets(included in othernon-current assets) $ 11,908 $ 16,460 $ 27,020 $ 27,279

Deferred tax liabilities:Acquired intangible assets $ 2,310 $ 1,793 $ 30,999 $ 32,652Depreciation 702 1,044 1,435 1,452Investment gain 9,565 31,135 25,496 21,571Others – – 369 373

Total deferred tax liabilities $ 12,577 $ 33,972 $ 58,299 $ 56,048

Valuation allowance is provided against deferred tax assets when the Group determinesthat it is more likely than not that the deferred tax assets will not be utilized in the future.In making such determination, the Group considered factors including (i) future reversalsof existing taxable temporary differences; (ii) future taxable income exclusive ofreversing temporary differences and carry forwards; and (iii) tax planning strategies. Thevaluation allowance on deferred tax assets as of December 31, 2018, 2019, 2020 and June30, 2021 was $17.6 million, $32.0 million, $89.7 million and $90.9 million, respectively.The change in valuation allowance was primarily due to bad debt expenses andinvestment impairment charges/fair value change of investments. Historically, deferredtax assets were valued using the statutory rate of 25% for China operations. As ofDecember 31, 2018, 2019 and 2020, the Group had net operating loss carry forwards forChina operations totaling $16.7 million, $22.1 million and $30.1 million, respectively, forwhich full valuation allowance was provided as the Group anticipates that it is more likelythan not that these net operating losses may not be utilized based on its estimate of theoperation performance of these PRC entities. Net operating loss carry forwards for Chinaoperations as of December 31, 2020 will expire, if unused, in the years ending December31, 2021 through December 31, 2025.


– IA-67 –



Uncertain tax position

Except for the lag recognitions of preferential tax treatment of KSE status, research anddevelopment super deduction and stock based related deduction, the Group did not recordany liability or decrease in deferred tax asset related to uncertain tax positions as ofDecember 31, 2018, 2019, 2020 and June 30, 2021, and thus, no interest and penaltiesrelated to uncertain tax positions were recorded.

For the six months ended June 30, 2021, based on interactions with the tax authorities,the Group received additional guidance regarding certain areas with heightenedrequirements, and updated its estimate of related tax benefit amount that is expected tobe sustained upon settlement with tax authorities. Additional $27.9 million tax liabilityrelated to uncertain tax positions was recognized for the six months ended June 30, 2021,which is based on the updated estimate of the largest amount of tax benefit that is greaterthan 50% likely to be realized upon settlement with the tax authorities. It is possible thatthe estimate and ultimate resolution of these uncertain tax positions may further changebased on further interactions with the tax authorities.

In general, the PRC tax authorities have up to five years to review a company’s tax filings.Accordingly, tax filings of the Company’s PRC subsidiaries and VIEs for tax years 2016through 2020 remain subject to the review by the relevant PRC tax authorities.

10. Related Party Transactions

The following sets forth significant related parties and their relationships with the Group:

Company Name Relationship with the Group

SINA Parent and affiliates under common control.

Alibaba Strategic partner and significant shareholder of theCompany.

During 2018, 2019 and 2020 and six months ended June 30, 2020 and 2021, the Groupentered into a series of one-year loan agreements with SINA pursuant to which SINA isentitled to borrow from the Group to facilitate SINA’s business operations. SINA haswithdrawn a total of $149.5 million, $233.9 million, $473.8 million, $188.2 million and$310.9 million from the Group and repaid $101.1 million, $43.6 million, $181.7 million,$146.7 million and $388.4 million to the Group during 2018, 2019, 2020 and six monthsended June 30, 2020 and 2021, respectively. As of December 31, 2018, 2019, 2020 andJune 30, 2021, the loans to and interest receivable from SINA were $43.6 million, $236.6million, $547.9 million and $480.7 million (included in Amount due from SINA in theconsolidated balance sheets), respectively.


– IA-68 –


10. Related Party Transactions (continued)

The following table sets forth significant related party transactions with the Group:


June 30,

2018 2019 2020 2020 2021


Transactions with SINARevenues billed

through SINA $ 78,821 $109,949 $ 41,754 $23,712 $24,586Revenue from services

provided to SINA 11,824 27,274 20,348 11,534 11,707

Total $ 90,645 $137,223 $ 62,102 $35,246 $36,293

Costs and expensesallocated fromSINA(1) $ 47,334 $ 51,848 $ 43,011 $23,129 $18,603

Interest income onloans to SINA $ 2,425 $ 9,295 $ 13,458 $ 4,936 $ 9,995

Transactions with AlibabaAdvertising and

marketing revenuesfrom Alibaba – asan advertiser $117,696 $ 97,772 $152,000 $63,313 $73,266

Advertising andmarketing revenuesfrom Alibaba – asan agent $ – $ – $ 36,597 $ 9,229 $36,652

Services provided byAlibaba $ 47,642 $ 50,205 $ 52,338 $26,400 $21,504

(1) Costs and expenses allocated from SINA represented the charges for certain services provided bySINA’s affiliates and charged to the Group using actual cost allocation based on proportional utilization(Note 1). In addition to the allocated costs and expenses, SINA also billed $23.4 million, $37.5 million,$48.3 million, $20.1 million and $21.9 million for other costs and expenses incurred by Weibo but paidby SINA in 2018, 2019, 2020 and six months ended June 30, 2020 and 2021, respectively. During 2020and six months ended June 30, 2021, Weibo allocated $9.7 million and $1.5 million to SINA for costsand expenses related to certain of SINA’s activities for which Weibo made the payments.


– IA-69 –





June 30,

2018 2019 2020 2020 2021


Transactions with SINAAdvertising and marketing

revenues $79,148 $112,974 $48,353 $27,624 $30,931Value-added services revenues 11,497 24,249 13,749 7,622 5,362

Total $90,645 $137,223 $62,102 $35,246 $36,293

The following sets forth related party outstanding balances:


June 30,

2018 2019 2020 2021

(In thousands)

Amount due from SINA(2) $105,319 $384,828 $548,900 $498,618Accounts receivable due from

Alibaba $ 48,222 $ 60,392 $135,321 $122,991

Loans to and interest receivablefrom other related parties(3)(4)

— Company A (an investee ine-commerce business) $ 43,695 $160,010 $ 79,762 $ 18,546

— Company B (an investeeproviding social and newmedia marketing services) $ – $ 60,602 $ 21,771 $ 15,056

— Company C (an investeeproviding online brokerageservices) $ – $ 40,982 $ 41,205 $270,898

— Others $ – $ 39,932 $ 15,884 $ 32,058

Total $ 43,695 $301,526 $158,622 $336,558


– IA-70 –



(2) The Group uses amount due from/to SINA to settle balances arising from cost and expenses allocatedfrom SINA based on proportional utilization, other expenditures incurred by Weibo business but paid bySINA, transactions with third-party customers and suppliers settled through SINA, as well as businesstransactions between Weibo and SINA. These balances are trade in nature. As of December 31, 2018,2019, 2020 and June 30, 2021, the amount due from SINA also included loans to and interest receivablefrom SINA of $43.6 million at an annual interest rate of 4.8%, $236.6 million at an annual interest rateof 4.5%, $547.9 million and $480.7 million at annual interest rates ranging from 1.0% to 4.5% ofmaturity within one year, respectively, which are non-trade in nature.

(3) The annual interest rates of the loans were ranging from 3.5% to 10.5% (interest free for Company B)and the maturities of all loans were within one year as of December 31, 2018, 2019, 2020 and June 30,2021, respectively. These balances are non-trade in nature.

(4) The Group assessed the collectability of outstanding loans at least on annual basis or wheneverimpairment indicators noted. For the year ended December 31, 2020, the Group recognized $82.2million impairment charges on loans to and interest receivable from other related parties due to theirunsatisfied financial performance and decline in forecasted revenues. For the six months ended June 30,2021, the Group didn’t recognize any impairment charges on loans to and interest receivable from otherrelated parties.

Other related parties mainly include investee companies on which SINA or Weibo hassignificant influence. These investees are generally high-tech companies operating indifferent internet-related businesses, such as short video applications, e-commerce and soon. For the years ended December 31, 2018, 2019 and 2020, six months ended June 30,2020 and 2021, advertising and marketing revenues generated from other related partieswere $130.2 million, $117.0 million, $46.5 million, $18.0 million and $22.7 million.Value-added services revenues generated from other related parties were $24.1 million,$5.4 million, $3.4 million, $0.9 million and $0.9 million, and cost and expenses were$19.0 million, $31.2 million, $48.1 million, $16.7 million and $20.2 million, respectively.As of December 31, 2018, 2019, 2020 and June 30, 2021, other related parties accountedfor outstanding balances of net accounts receivable of $130.8 million, $99.7 million,$42.5 million and $41.0 million, accounts payable of $31.2 million, $10.7 million, $30.8million and $28.7 million, and accrued and other liabilities of $14.4 million, $34.4million, $4.8 million and $5.4 million, respectively. In 2019, the Group signed anagreement with one related party, which is an equity investee in the short video business,to settle partial transaction amounts between the two parties, resulting in accountsreceivable of $38.7 million due from the related party offset by accounts payable of $28.7million and accrued and other liabilities of $10 million due to the related party on theconsolidated balance sheet, where a legally enforceable right of setoff existed.


– IA-71 –


11. Employee Benefit Plans

China Contribution Plan

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries in China participate in agovernment-mandated, multi-employer, defined contribution plan, pursuant to whichcertain retirement, medical, housing and other welfare benefits are provided toemployees. Chinese labor laws require the entities incorporated in China to pay to thelocal labor and welfare authorities a monthly contribution at a stated contribution ratebased on the monthly basic compensation of qualified employees. The local labor bureauis responsible for meeting all retirement benefit obligations. The Group has no furthercommitments beyond its monthly contribution. For the years ended December 31, 2018,2019, 2020 and six months ended June 30, 2020 and 2021, the Group’s total contributionwas $53.7 million, $53.3 million, $51.1 million, $21.4 million and $37.8 million,respectively. Total contribution for the year ended December 31, 2020 was partially offsetby $12.2 million one-off benefit of the social security relief as part of the measures takenby the government to ease the negative impact from Covid-19 pandemic.

12. Net Income per Share

Basic net income per share is computed using the weighted average number of theordinary shares outstanding during the period. Options and RSUs are not consideredoutstanding in the computation of basic earnings per share (“EPS”). Diluted EPS iscomputed using the weighted average number of ordinary shares and potential ordinaryshares outstanding during the period under the treasury stock method. For the years endedDecember 31, 2018, 2019, 2020 and six months ended June 30, 2020 and 2021, optionsto purchase ordinary shares and RSUs of 2.2 million, 1.0 million, 0.7 million, 0.6 millionand 1.5 million, as well as the number of “if converted” shares related to convertible debtof 6.8 million in 2018, were recognized as dilutive factors and included in the calculationof diluted net income per share. For the years ended December 31, 2018, 2019, 2020 andsix months ended June 30, 2020 and 2021, options and RSUs which were anti-dilutive andexcluded from the calculation of diluted net income per share were 0.1 million, 0.4million, 3.3 million, 1.0 million and 0.1 million, respectively. During each of the yearsended December 31, 2019 and 2020 and six months ended June 30, 2020 and 2021, sharesof 6.8 million convertible from the convertible debt were anti-dilutive and excluded fromthe calculation of diluted net income per share.


– IA-72 –


12. Net Income per Share (continued)

The following table sets forth the computation of basic and diluted net income per sharefor the periods presented:


June 30,

2018 2019 2020 2020 2021

(Unaudited)(In thousands, except per share data)

Basic net income pershare calculation:Numerator:

Net incomeattributable toWeibo’sshareholders $571,823 $494,675 $313,364 $250,524 $130,848

Denominator:Weighted average

ordinary sharesoutstanding 223,751 225,452 226,921 226,535 227,936

Basic net income pershare attributable toWeibo’sshareholders $ 2.56 $ 2.19 $ 1.38 $ 1.11 $ 0.57

Diluted net income pershare calculation:Numerator:

Net incomeattributable toWeibo’sshareholders $571,823 $494,675 $313,364 $250,524 $130,848

Add: Effect oninterestexpenses andamortizedissuance cost ofconvertible debt 15,390 – – – –

Net incomeattributable to Weibofor calculatingdiluted net incomeper share 587,213 494,675 313,364 250,524 130,848


– IA-73 –




June 30,

2018 2019 2020 2020 2021

(Unaudited)(In thousands, except per share data)

Denominator:Weighted average

ordinary sharesoutstanding 223,751 225,452 226,921 226,535 227,936

Effects of dilutivesecuritiesStock options 283 153 71 76 82Unvested

restricted shareunits 1,896 807 645 518 1,411

Convertible debt 6,753 – – – –

Shares used incomputing dilutednet income per shareattributable toWeibo’sshareholders 232,683 226,412 227,637 227,129 229,429

Diluted net income pershare attributable toWeibo’sshareholders $ 2.52 $ 2.18 $ 1.38 $ 1.10 $ 0.57

13. Segment Information

The Group currently operates and manages its business in two principal businesssegments globally — advertising and marketing services and value-added services.Information regarding the business segments provided to the Group’s chief operatingdecision makers (“CODM”), its Chief Executive Officer, is at the revenue level and theGroup currently does not allocate operating costs and expenses or assets to its segments,as its CODM does not use such information to allocate resources or evaluate theperformance of the operating segments. As substantially all of the Group’s revenues arederived from the PRC and substantially all of the Group’s long-lived assets are locatedwithin the PRC, no geographical information is presented.


– IA-74 –


13. Segment Information (continued)

The following is a summary of the Group’s revenues:

RevenuesAdvertising &


services Total

(In thousands)

Year ended December 31, 2018 $1,499,180 $219,338 $1,718,518



Six months ended June 30,2020 (Unaudited) $ 616,006 $ 94,776 $ 710,782

Six months ended June 30,2021 $ 892,349 $141,013 $1,033,362

14. Profit Appropriation and Restricted Net Assets

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries in China are required to makeappropriations to certain non-distributable reserve funds. In accordance with the lawsapplicable to WFOEs in China, its subsidiaries have to make appropriations from theirafter-tax profit (as determined under Generally Accepted Accounting Principles in thePRC (“PRC GAAP”)) to non-distributable reserve funds including (i) general reservefund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. General reservefund is at least 10% of the after-tax profits calculated in accordance with the PRC GAAP.Appropriation is not required if the reserve fund has reached 50% of the registered capitalof the respective company. The appropriation of the other two reserve funds is at theGroup’s discretion. At the same time, the Company’s VIEs, in accordance with the ChinaCompany Laws, must make appropriations from their after-tax profit (as determinedunder the PRC GAAP) to non-distributable reserve funds including (i) statutory surplusfund, and (ii) discretionary surplus fund. Statutory surplus fund is at least 10% of theafter-tax profits calculated in accordance with the PRC GAAP. Appropriation is notrequired if the reserve fund has reached 50% of the registered capital of the respectivecompany.

General reserve fund and statutory surplus fund are restricted for set off against losses,expansion of production and operation or increase in registered capital of the respectivecompanies. These reserves are not transferable to the Company in the form of cashdividends, loans or advances. These reserves are therefore not available for distributionexcept in liquidation.

As of December 31, 2018, 2019, 2020 and June 30, 2021 the Group’s PRC subsidiariesaccrued approximately $98.7 million, $105.8 million, $127.2 million and $127.0 millionin the general reserve/statutory surplus funds, respectively.


– IA-75 –


14. Profit Appropriation and Restricted Net Assets (continued)

Under the PRC laws and regulations, the subsidiaries, VIEs and VIEs’ subsidiariesincorporated in the PRC are restricted in their ability to transfer a portion of their netassets to the Group either in the form of dividends, loans or advances of the consolidatednet assets. Even though the Group currently does not require any such dividends, loansor advances from the PRC subsidiaries, VIEs and VIEs’ subsidiaries for working capitaland other funding purposes, the Group may in the future require additional cash resourcesfrom the PRC subsidiaries, VIEs and VIEs’ subsidiaries due to changes in businessconditions, to fund future acquisitions and development, or merely declare and paydividends to or distribution to its shareholders. Net assets subject to restriction for theGroup amounted to $450.3 million, or 14.5% of the Group’s total consolidated net assetsas of June 30, 2021.

15. Fair Value Measurement

The following table summarizes, for assets measured at fair value on a recurring basis, therespective fair value and the classification by level of input within the fair value hierarchyas of December 31, 2018, 2019, 2020 and as of June 30, 2021:


Total

Quoted Prices inActive Market for

Identical Assets(Level 1)

Significant OtherObservable Inputs

(Level 2)

SignificantUnobservable

Inputs(Level 3)

(In thousands)

As of December 31, 2018:Bank time deposits* $ 591,269 $ – $ 591,269 $–Equity securities with readily

determinable market value** 1,476 1,476 – –

Total $ 592,745 $ 1,476 $ 591,269 $–

As of December 31, 2019:Bank time deposits* $ 951,235 $ – $ 951,235 $–Equity securities with readily


Total $1,220,713 $269,478 $ 951,235 $–

As of December 31, 2020:Bank time deposits* $1,515,880 $ – $1,515,880 $–Wealth management products* 166,168 – 166,168 –Equity securities with readily


Total $1,971,269 $289,221 $1,682,048 $–


– IA-76 –


15. Fair Value Measurement (continued)


Total




(Level 2)


Inputs(Level 3)

(In thousands)

As of June 30, 2021:Bank time deposits* $ 750,467 $ – $750,467 $–Wealth management products* 180,355 – 180,355 –Equity securities with readily


Total $1,172,412 $241,590 $930,822 $–

* Included in short-term investments on the Group’s consolidated balance sheets.

** Included in long-term investments on the Group’s consolidated balance sheets.

Recurring

The Group measures short-term investments and equity securities with readilydeterminable fair values on a recurring basis. The fair value of the Group’s equitysecurities with readily determinable fair values are determined based on the quotedmarket price (Level 1). The fair value of the Group’s short-term investments aredetermined based on the quoted market price for similar products (Level 2).

Non-recurring

For those equity investments without readily determinable fair value, the Group measuresthem at market value when observable price changes are identified or impairment chargewere recognized. The market values of the Group’s privately held investments asdisclosed are determined based on the discounted cash flow model using the discountcurve of market interest rates or based on the similar transaction price in the marketdirectly. The Group classifies the valuation techniques on those investments that usesimilar identifiable transaction prices as Level 2 of fair value measurements. The Groupmeasures equity method investments at fair value on a non-recurring basis only if animpairment charge is recognized.

Certain privately held investments were measured using significant unobservable inputs(Level 3) and written down from their respective carrying values to fair values,considering the investees’ financial performance, assumptions about future growth, andfuture financing plan, with impairment charges incurred and recorded in earnings for theyear then ended. The Group recognized impairment charges of $23.6 million, $230.9million, $126.8 million, $2.5 million and $66.6 million on these equity investmentswithout readily determinable fair values for the years ended December 31, 2018, 2019,2020 and six months ended June 30, 2020 and 2021, respectively. As of December 31,2018, 2019, 2020 and June 30, 2021, the carrying value of these impaired investments


– IA-77 –



Non-recurring (continued)

measured at Level 3 inputs were $2.5 million, $77.5 million, $89.5 million, and $30.3million respectively. The fair value of the privately held investments was measured eitherbased on discounted cash flow with unobservable inputs including the discount curve ofmarket interest rates, which ranged from 12% to 23%, or based on comparing theoperating metrics of public peer companies with the investees.

The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets andoperating lease assets, are measured at fair value only if they were determined to beimpaired. In accordance with the Group’s policy to perform an impairment assessment ofits goodwill on an annual basis as of the balance sheet date or when facts andcircumstances warrant a review, the Group performed an impairment assessment on itsgoodwill by reporting unit annually. The Group recognized impairment charge ofgoodwill arising from previous acquisitions of $10.6 million, nil, nil, nil and nil for theyears ended December 31, 2018, 2019, 2020 and six months ended June 30, 2020 and2021, respectively.

The carrying amount of cash and cash equivalents, short-term investments, accountsreceivable due from third parties, accounts receivable due from Alibaba, accountsreceivable due from other related parties, amount due from SINA, accounts payable,accrued and other liabilities approximates fair value because of their short-term nature.

16. Convertible Debt and Unsecured Senior Notes

In October 2017, the Company issued $900 million in aggregate principal amount of1.25% coupon interest convertible senior notes due on November 15, 2022 (“2022Notes”) at par. The Notes may be converted into Weibo’s American depositary shares(“ADSs”), each representing one Class A ordinary share of the Company, at the option ofthe holders, which is equivalent to an initial conversion price of approximately $133.27per ADS, subject to adjustment. The conversion rate may be adjusted under certaincircumstances, such as distribution of dividends and stock splits. In addition, upon amake-whole fundamental change prior to the maturity date of the notes, the Companywill, under certain circumstances, increase the applicable conversion rate for a holder thatelects to convert his/her notes in connection with such make-whole fundamental change.

The net proceeds received by the Company from the issuance of the 2022 Notes were$879.3 million, net of issuance cost of $20.7 million. The Company will pay cash interestat an annual rate of 1.25%, payable semiannually in arrears on May 15 and November 15of each year, beginning May 15, 2018. The issuance costs of the 2022 Notes are beingamortized to interest expenses over the contractual life. The 2022 Notes related interestexpenses were $7.7 million for both of the six months ended June 30, 2020 and 2021.


– IA-78 –


16. Convertible Debt and Unsecured Senior Notes (continued)

In July 2019, the Company issued $800 million in aggregate principal amount ofunsecured senior notes due on July 5, 2024 (“2024 Notes”), unless previously repurchasedor redeemed in accordance with the terms prior to maturity. The 2024 Notes were issuedat par value and bear an annual interest rate of 3.50%, payable semiannually in arrears onJanuary 5 and July 5 of each year, beginning on January 5, 2020. The net proceeds to theCompany from the issuance of the 2024 Notes were $793.3 million, net of issuance costof $6.7 million. The issuance costs of the 2024 Notes are being amortized to interestexpenses over the contractual life. The 2024 Notes related interest expenses were $14.5million, $29.3 million, $14.7 million and $14.7 million for the years ended December 31,2019, 2020 and six months ended June 30, 2020 and 2021, respectively.

In July 2020, the Company issued $750 million in aggregate principal amount ofunsecured senior notes due on July 8, 2030 (“2030 Notes”), unless previously repurchasedor redeemed in accordance with the terms prior to maturity. The 2030 Notes bear anannual interest rate of 3.375%, payable semiannually in arrears on January 8 and July 8of each year, beginning on January 8, 2021. The net proceeds to the Company from theissuance of the 2030 Notes were $740.3 million, net of issuance cost of $9.7 million. Theissuance costs of the 2030 Notes are being amortized to interest expenses over thecontractual life. For the year ended December 31, 2020, the Group recognized $12.7million interest expenses from the 2030 Notes. For the six months ended June 30, 2021,the Group recognized $13.1 million interest expenses from the 2030 Notes.

17. Commitments and Contingencies

Operating lease commitments include the commitments under the lease agreements forthe Group’s office premises. The Group leases its office facilities under non-cancelableoperating leases with various expiration dates. For the years ended December 31, 2018,2019, 2020 and six months ended June 30, 2020 and 2021, lease expense was $11.2million, $11.5 million, $12.5 million, $6.0 million and $7.9 million, respectively. Basedon the current rental lease agreements, commitments of future minimum lease payments(including those lease liabilities recognized upon the adoption of ASC 842) as of June 30,2021 were as follows:

Operating leasecommitments Total

Less thanOne Year

One toThreeYears

Three toFive

Years

Morethan Five

Years

(In thousands)

As of June 30, 2021 $12,800 $6,020 $3,632 $2,855 $293


– IA-79 –


17. Commitments and Contingencies (continued)

Purchase commitments mainly include minimum commitments for marketing activitiesand internet connection. Purchase commitments as of June 30, 2021 were as follows:

Purchasecommitments Total

Less thanOne Year

One toThreeYears

Three toFive

Years

Morethan Five

Years

(In thousands)

As of June 30, 2021 $591,545 $561,167 $28,263 $2,093 $22

2022 Notes represent the future maximum commitments relating to the principal amountand interests in connection with the issuance of $900 million in aggregate principalamount of 1.25% coupon interest convertible senior notes, which will mature onNovember 15, 2022. 2024 Notes represent future maximum commitment relating to theprincipal amount and interests in connection with the issuance of $800 million inaggregate principal amount of unsecured senior notes bearing an annual interest rate of3.50%, which will mature on July 5, 2024. 2030 Notes represent future maximumcommitment relating to the principal amount and interests in connection with the issuanceof $750 million in aggregate principal amount of unsecured senior notes bearing anannual interest rate of 3.375%, which will mature on July 8, 2030.

Other commitmentsEnded June 30, 2021 Total

Less thanOne Year

One toThreeYears

Three toFive

Years

Morethan Five

Years

(In thousands)

2022 Notes $ 916,867 $11,250 $ 905,617 $ – $ –2024 Notes 898,000 28,000 56,000 814,000 –2030 Notes 990,469 25,313 50,625 50,625 863,906

Total $2,805,336 $64,563 $1,012,242 $864,625 $863,906

There are uncertainties regarding the legal basis of the Group’s ability to operate anInternet business in China. Although China has implemented a wide range of market-oriented economic reforms, the telecommunication, information and media industriesremain highly regulated. Not only are such restrictions currently in place, the existingregulations are unclear as to which specific segments of these industries companies withforeign investors, including the Company, may operate. Therefore, the Group may berequired to limit the scope of its operations in China, and this could have a materialadverse effect on its financial position, results of operations and cash flows.

There are no claims, lawsuits, investigations or proceedings, including unasserted claimsthat are probable to be assessed, that have in the recent past had, or to the Group’sknowledge, are reasonably possible to have, a material impact on the Group’s financialstatements.


– IA-80 –


18. Redeemable Non-controlling Interests

In the fourth quarter of 2020, the Group entered into a series of share purchaseagreements with then existing shareholders of JM Tech to acquire the majority of thecompany’s equity interest (Note 6). The Group agreed to redeem the non-controllinginterests held by founder and CEO of the company under certain circumstances during thefollowing years subsequent to the acquisition. The Group determined that the non-controlling interest with redemption rights should be classified as redeemable non-controlling interest since they are contingently redeemable upon the occurrence of certainconditional events, which are not solely within the control of the Group.

The redeemable non-controlling interests is recognized at fair value on the acquisitiondate. The Group records accretion on the redeemable non-controlling interest to theredemption value over the period from the date of the acquisition to the date of earliestredemption. The accretion using the effective interest method, is recorded as deemeddividends to preferred shareholders, which reduce retained earnings and equity classifiednon-controlling interests, and earnings available to common shareholders in calculatingbasic and diluted earnings per share.

The process of adjusting redeemable non-controlling interests to its redemption value (the“Mezzanine Adjustment”) should be performed after attribution of the subsidiary’s netincome or loss pursuant to ASC 810, Consolidation. The carrying amount of redeemablenon-controlling interests will equal the higher of the amount resulting from application ofASC 810 or the amount resulting from the Mezzanine Adjustment. As the expectedredemption value is less than the carrying value of redeemable non-controlling interests,there is nil and nil mezzanine adjustment recognized for the year ended December 31,2020 and six months ended June 30, 2021, respectively.

Pursuant to the agreements between the Group and the founders who are also employeesof JM Tech, the founders are required to be in employment during the following two yearstill December 31, 2022 to be entitled to their proportionate share in JM Tech’s existingand future retained earnings during the period. Such entitlement will automatically beforfeited upon the termination of their employment during the period. The Companyconsidered this arrangement as certain economic interests associated with the founders’non-controlling interest in JM Tech till December 31, 2022. Therefore, the Companyrecognized compensation costs for the founders’ share of JM Tech’s retained earningswith the credit increasing non-controlling interest and redeemable non-controllinginterest. During the six months ended June 30, 2021, $13.3 million compensation costswere recognized, of which $10.9 million was recorded to increase redeemable non-controlling interest.

19. Subsequent events

From June 30, 2021 to the date of publication of this report, there was no subsequentevent which had a material impact on the Group.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company in respect of anyperiod subsequent to June 30, 2021 and up to the date of this report. No dividend ordistribution has been declared or made by the Company in respect of any periodsubsequent to June 30, 2021.


– IA-81 –

The following is the text of a report set out on pages IB-1 to IB-2, received from the Company’sreporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, forthe purpose of incorporation in this document. The information set out below is the unauditedinterim condensed financial information of the Group for the nine months ended September 30,2021, and does not form part of the Accountant’s Report from the Company’s reportingaccountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, as set out inAppendix IA to this document, and is included herein for information purpose only.

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATIONTO THE BOARD OF DIRECTORS OF WEIBO CORPORATION(incorporated in the Cayman Islands with limited liability)

Introduction

We have reviewed the interim financial information set out on pages IB-3 to IB-67, whichcomprises the interim condensed consolidated balance sheet of Weibo Corporation (the“Company”) and its subsidiaries (together, the “Group”) as at September 30, 2021 and theinterim condensed consolidated statement of comprehensive income, the interim condensedconsolidated statement of shareholders’ equity and the interim condensed consolidatedstatement of cash flows for the nine-month period then ended, and a summary of significantaccounting policies and other explanatory notes. The directors of the Company are responsiblefor the preparation and presentation of this interim financial information in accordance withaccounting policies generally accepted in the United States of America. Our responsibility isto express a conclusion on this interim financial information based on our review and to reportour conclusion solely to you, as a body, in accordance with our agreed terms of engagementand for no other purpose. We do not assume responsibility towards or accept liability to anyother person for the contents of this report.

Scope of Review

We conducted our review in accordance with Hong Kong Standard on Review Engagements2410, “Review of Interim Financial Information Performed by the Independent Auditor of theEntity” issued by the Hong Kong Institute of Certified Public Accountants. A review of interimfinancial information consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance with Hong KongStandards on Auditing and consequently does not enable us to obtain assurance that we wouldbecome aware of all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interimfinancial information of the Group is not prepared, in all material respects, in accordance withaccounting policies generally accepted in the United States of America.

APPENDIX IB UNAUDITED INTERIM CONDENSEDCONSOLIDATED FINANCIAL INFORMATION

– IB-1 –

Other Matter

The comparative information for the interim condensed consolidated balance sheet is based onthe audited financial statements as at December 31, 2020. The comparative information for theinterim condensed consolidated statements of comprehensive income, shareholders’ equity andcash flows, and related explanatory notes, for the period ended September 30, 2020 has notbeen audited or reviewed.

PricewaterhouseCoopersCertified Public AccountantsHong KongNovember 29, 2021


– IB-2 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands of U.S. dollars, except for par value)

As of

NotesDecember 31,

2020September 30,

2021

ASSETSCurrent assets:

Cash and cash equivalents 3 $1,814,844 $1,828,691Short-term investments 3 1,682,048 878,487Accounts receivable due from third

parties, net of allowances of $29,061and $35,219 as of December 31, 2020and September 30, 2021, respectively 8 314,159 544,283

Accounts receivable due from Alibaba,net of allowances of nil and nil as ofDecember 31, 2020 and September 30,2021, respectively 8 & 10 135,321 98,262

Accounts receivable due from otherrelated parties, net of allowances of$6,095 and $64 as of December 31,2020 and September 30, 2021,respectively 8 & 10 42,530 41,165

Prepaid expenses and other currentassets (including loans to and interestreceivable from other related partiesof $158,622 and $283,904 as ofDecember 31, 2020 and September 30,2021, respectively) 8 & 10 296,757 944,044

Amount due from SINA 10 548,900 515,534

Total current assets 4,834,559 4,850,466

Property and equipment, net 8 60,632 64,396Operating lease assets 5 7,176 10,666Intangible assets, net 6 146,976 170,756Goodwill 6 61,712 128,576Long-term investments 4 1,179,466 1,195,549Other non-current assets 8 44,596 577,627

Total assets $6,335,117 $6,998,036

LIABILITIES, REDEEMABLENON-CONTROLLING INTERESTSAND SHAREHOLDERS’ EQUITY

Current liabilities (including amounts ofthe consolidated VIEs without recourseto the primary beneficiary of $538,269and $710,781 as of December 31, 2020and September 30, 2021, respectively.)Accounts payable $ 149,509 $ 177,647Accrued and other liabilities 8 556,753 732,519Operating lease liability, short-term 5 5,580 4,405Income taxes payable 102,844 115,241Deferred revenues 143,684 132,468

Total current liabilities 958,370 1,162,280


– IB-3 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)(In thousands of U.S. dollars, except for par value)

As of

NotesDecember 31,

2020September 30,

2021

Long-term liabilitiesConvertible debt 16 892,399 895,505Unsecured senior notes 16 1,536,112 1,537,840Deferred tax liability 9 58,299 54,453Operating lease liability, long-term 5 1,505 5,831Other non-current liabilities 2,102 11,714

Total long-term liabilities 2,490,417 2,505,343

Total liabilities $3,448,787 $3,667,623

Commitments and contingencies 17

Redeemable non-controlling interests 18 $ 57,714 $ 74,170

Shareholders’ equity:Ordinary shares: $0.00025 par value;

2,400,000 and 2,400,000 shares(including 1,800,000 Class A ordinaryshares, 200,000 Class B ordinaryshares and 400,000 shares to bedesignated) authorized; 227,688 shares(including 125,909 Class A ordinaryshares and 101,779 Class B ordinaryshares) and 229,092 shares (including127,313 Class A ordinary shares and101,779 Class B ordinary shares)issued and outstanding as of December31, 2020 and September 30, 2021,respectively. $ 57 $ 57

Additional paid-in capital 1,201,622 1,269,014Accumulated other comprehensive

income 79,526 114,066Retained earnings 1,531,220 1,843,806

Total Weibo shareholders’ equity 2,812,425 3,226,943Non-controlling interests 16,191 29,300

Total shareholders’ equity 2,828,616 3,256,243

Total liabilities, redeemablenon-controlling interests andshareholders’ equity $6,335,117 $6,998,036

The accompanying notes are an integral part of these unaudited interim condensed consolidatedfinancial statements.


– IB-4 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME(In thousands of U.S. dollars, except for par value)

Nine Months EndedSeptember 30,

Notes 2020 2021

Revenues:Advertising and marketing revenues 13

Third parties $ 852,263 $1,198,168Alibaba 10 112,906 134,892SINA 10 34,149 58,178Other related parties 10 33,360 38,731

1,032,678 1,429,969Value-added services revenues 13 143,843 210,827

Total revenues 1,176,521 1,640,796

Costs and ExpensesCost of revenues 214,892 275,296Sales and marketing 316,483 439,207Product development 233,881 316,806General and administrative 86,111 94,597

Total costs and expenses 851,367 1,125,906

Income from operations 325,154 514,890Income from equity method investments 4,422 17,688Realized gain from investments 848 1,299Fair value changes through earnings on

investments, net 127,641 (33,073)Investment related impairment (117,835) (102,594)Interest income 65,667 56,909Interest expense (39,677) (53,255)Other income, net 3,889 3,147

Income before income tax expenses 370,109 405,011Less: Provision of income taxes 9 86,630 93,260

Net income $ 283,479 $ 311,751Less: Net loss attributable to non-controlling

interests (843) (835)

Net income attributable to Weibo’s shareholders $ 284,322 $ 312,586


– IB-5 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME (Continued)(In thousands of U.S. dollars, except for par value)


Notes 2020 2021

Net income $283,479 $311,751Other comprehensive income

Currency translation adjustments (for whichthere were no taxes) 57,670 34,888

Total comprehensive income $341,149 $346,639Less: Comprehensive loss attributable to non-

controlling interests (810) (487)

Comprehensive income attributable to Weibo’sshareholders $341,959 $347,126

Shares used in computing net income per shareattributable to Weibo’s shareholders:

Basic 12 226,728 228,185Diluted 12 227,352 229,765Income per share:Basic 12 $ 1.25 $ 1.37Diluted 12 $ 1.25 $ 1.36

The accompanying notes are an integral part of these unaudited interim condensed consolidatedfinancial statements.


– IB-6 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OFSHAREHOLDERS’ EQUITY(In thousands of U.S. dollars)


Paid-InCapital

AccumulatedOther

ComprehensiveIncome (Loss)

RetainedEarnings

Non-controlling

Interests


EquityShares Amount

Balance at December 31, 2019 226,310 $57 $1,133,913 $ (68,559) $1,217,856 $ (1,448) $2,281,819Issuance of ordinary shares

pursuant to stock plan 1,002 – 57 – – – 57Non-cash stock-based

compensation – – 47,785 – – – 47,785Conversion of convertible debt – – 8 – – – 8Net income (loss) – – – – 284,322 (843) 283,479Sale of a subsidiary’s shares to

non-controlling shareholders – – 539 – – 978 1,517Currency translation adjustments – – – 57,637 – 33 57,670

Balance at September 30, 2020 227,312 $57 $1,182,302 $ (10,922) $1,502,178 $ (1,280) $2,672,335

Balance at December 31, 2020 227,688 $57 $1,201,622 $ 79,526 $1,531,220 $16,191 $2,828,616Issuance of ordinary shares

pursuant to stock plan 1,404 – 1,214 – – – 1,214Non-cash stock-based

compensation – – 66,437 – – – 66,437Net income (loss) – – – – 312,586 (835) 311,751Compensation cost to non-

controlling interestshareholders – – – – – 2,792 2,792

Disposal of a subsidiary withnon-controlling interests – – (259) – – (7) (266)

Acquisition of a subsidiary withnon-controlling interests – – – – – 10,811 10,811

Currency translation adjustments – – – 34,540 – 348 34,888

Balance at September 30, 2021 229,092 $57 $1,269,014 $114,066 $1,843,806 $29,300 $3,256,243

The accompanying notes are an integral part of these unaudited interim condensed consolidatedfinancial statements


– IB-7 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS(In thousands of U.S. dollars)


2020 2021

Cash flows from operating activities:Net income $ 283,479 $ 311,751Adjustments to reconcile net income to net cash

provided by operating activities:Depreciation and amortization 21,422 40,172Stock-based compensation 47,785 61,258Amortization of operating lease assets 2,958 4,211Non-cash compensation cost to non-controlling

interest shareholders – 18,420Provision of allowance for credit losses 52,900 13,160Deferred income taxes 11,682 (11,546)Income from equity method investments (4,422) (17,688)Dividend received from equity method investments – 11,695Gain on sale of investments (848) (1,299)Fair value changes through earnings

on investments, net (127,641) 33,073Investment related impairment 117,835 102,594Gain on disposal of property and equipment (27) (63)Amortization of convertible debt and unsecured

senior notes issuance cost 4,333 4,834Changes in assets and liabilities:

Accounts receivable due from third parties (61,633) (241,309)Accounts receivable due from Alibaba (35,618) 38,743Accounts receivable due from other related parties 36,659 8,000Prepaid expenses and other current assets (36,769) 7,849Other non-current assets (159) (4,194)Accounts payable (14,256) 24,290Accrued and other liabilities 6,081 190,348Amount due from SINA 70,807 (23,357)Deferred revenues 40,956 (13,235)Operating lease liabilities (3,100) (4,550)Income taxes payable 8,071 11,195

Net cash provided by operating activities 420,495 564,352

Cash flows from investing activities:Purchases of bank time deposits and wealth

management products (2,048,210) (560,246)Maturities of bank time deposits and wealth

management products 1,241,610 1,371,867Investment in and prepayment on long-term

investments (287,449) (1,471,280)Proceeds from disposal of/refund of prepayment on

long-term investments 178,886 242,558


– IB-8 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS (Continued)(In thousands of U.S. dollars)


2020 2021

Proceeds from disposal of property and equipment 38 273Purchases of property and equipment (26,404) (23,786)Prepayment for purchase of SINA Plaza – (132,531)Loan to SINA (443,637) (481,215)Repayment of loan by SINA 146,697 547,660Payment for acquisitions, net of cash acquired (2,386) (61,160)

Net cash used in investing activities (1,240,855) (567,860)

Cash flows from financing activities:Proceeds from employee options exercised 122 1,214Proceeds from unsecured senior notes,

net of issuance costs 740,324 –Proceeds from sale of a subsidiary’s equity interest

to a non-controlling shareholder 1,517 –

Net cash provided by financing activities 741,963 1,214

Effect of exchange rate changes on cash andcash equivalents 37,341 16,141

Net increase (decrease) in cash and cash equivalents (41,056) 13,847Cash and cash equivalents at the beginning of

the year/period 1,452,985 1,814,844

Cash and cash equivalents at the end of the period $ 1,411,929 $1,828,691

Supplemental disclosure of cash flow informationCash paid for income taxes $ (66,305) $ (94,189)Cash paid for interest expenses on convertible

debt/unsecured senior notes $ (33,625) $ (32,281)Supplemental schedule of non-cash investing and

financing activitiesProperty and equipment in accounts payable $ 4,492 $ 5,657Unpaid consideration for acquisition $ – $ 6,205


– IB-9 –

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIALSTATEMENTSFOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2021

1. Operations

Weibo Corporation (“Weibo” or the “Company”) is a leading social media for people tocreate, share and discover content. It provides an unprecedented and simple way forpeople and organizations to publicly express themselves in real time, interact with otherson a massive global platform and stay connected with the world. As a microcosm of theChinese society and a cultural phenomenon in China, Weibo allows people to be heardpublicly and exposed to the rich ideas, cultures and experiences of the broader world.Media outlets use Weibo as a source of news and a distribution channel for their headlinenews. Government agencies and officials use Weibo as an official communication channelfor disseminating information timely and gauging public opinion to improve publicservices. Weibo provides charities a platform to launch charitable projects, seek donationsand volunteers, and leverage celebrities and organizations on Weibo to amplify theirimpact to society. Weibo generates its revenues mostly from advertising and marketingservices, as well as from value-added services, including VIP membership, livestreaming, and game-related services.

Incorporated in the Cayman Islands, Weibo Corporation is a controlled subsidiary of SinaCorporation (the “Parent” or “SINA”). In April 2014, the Company completed an initialpublic offering (the “IPO”) and received $306.5 million in net proceeds. Immediatelyprior to the completion of the IPO, all the ordinary shares held by SINA was convertedinto an equal number of the Class B ordinary shares, all the ordinary shares held by othershareholders was converted into an equal number of the Class A ordinary shares, and allof its outstanding preferred shares was automatically converted into Class A ordinaryshares. The call option held by a subsidiary of Alibaba Group was exercised to purchaseClass A ordinary shares from SINA and the Company. Each Class A ordinary share isentitled to one vote per share and each Class B ordinary share is entitled to three votesper share. Each Class B ordinary share can be converted into one Class A ordinary shareat any time, while Class A ordinary shares cannot be converted into Class B ordinaryshares.

Weibo Corporation, an exempted company with limited liability under the laws of theCayman Islands, is the holding company for the Weibo business. WB Online and WeiboHK are wholly owned subsidiaries of Weibo, and Weibo Technology, a whollyforeign-owned enterprise, (“the WFOE”), is a subsidiary of Weibo HK. The operation ofWeibo business is carried out by various subsidiaries and variable interest entities(“VIE”) of the Company. The Company’s VIEs and VIEs’ subsidiaries are controlled bythe WFOE through a series of contractual agreements. Weibo Corporation, itssubsidiaries, VIEs and VIEs’ subsidiaries together are referred to as “the Group”.


– IB-10 –

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIALSTATEMENTSFOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2021 (Continued)


The following sets forth the Company’s major subsidiaries, major VIEs and major VIEs’subsidiary:

CompanyDate of

IncorporationPlace of

Incorporation

Percentageof Direct/Indirect

EconomicInterest

Major SubsidiariesWeibo Hong Kong Limited

(“Weibo HK”)July 19, 2010 Hong Kong 100%

Weibo Internet Technology(China) Co., Ltd. (“WeiboTechnology” or “the WFOE”)

October 11, 2010 PRC 100%

WB Online Investment Limited(“WB Online”)

June 5, 2014 Cayman Islands 100%

Hangzhou WeishichangmengAdvertising Co., Ltd.(“Weishichangmeng”)

September 25,2018

PRC 100%

Major VIEsBeijing Weimeng Technology

Co., Ltd (“Weimeng”)August 9, 2010 PRC 99%

Beijing Weimeng ChuangkeInvestment Management Co.,Ltd. (“Weimeng Chuangke”)

April 9, 2014 PRC 100%

Major VIEs’ subsidiaryBeijing Weibo Interactive

Internet Technology Co., Ltd.(“Weibo Interactive”)

Acquired in May2013

PRC 100%

Intellectual Property License Agreement

The intellectual property license agreement was entered into by and between SINA andthe Company in April 2013. Under this agreement, SINA granted the Company and itssubsidiaries a perpetual, worldwide, royalty-free, fully paid-up, non-sub licensable,non-transferable, limited, exclusive license of certain trademarks and a non-exclusivelicense of certain other intellectual property owned by SINA to make, sell, offer to selland distribute products, services and applications on a microblogging and socialnetworking platform. The Company granted SINA and its affiliates a non-exclusive,perpetual, worldwide, non-sub licensable, non-transferable limited license of certain ofthe Company’s intellectual property to use, reproduce, modify, prepare derivative worksof, perform, display or otherwise exploit such intellectual property. This agreementcommenced on April 29, 2013 and will continue to be in effect unless terminated by SINAshould the Company breach the terms as provided in the agreement.


– IB-11 –



Transactions between SINA and Weibo

Accounts receivable directly related to Weibo but for which SINA will receive paymentsand remit payments to the Group, as well as accounts receivable directly from SINA, areincluded in the amount due from SINA. Liabilities directly related to Weibo but for whichSINA will make payments and receive reimbursements from the Group, as well asliabilities directly to SINA, are included in the amount due to SINA. The amount duefrom/to SINA is presented as an offsetting balance on the Group’s unaudited interimcondensed consolidated balance sheets. Loans from SINA are presented under cash flowfrom financing activities, whereas loans to SINA are presented under investing activitiesin the unaudited interim condensed consolidated statements of cash flows. Cash paymentfor billings from SINA for costs and expenses allocated to the Group is presented underoperating activities in the unaudited interim condensed consolidated statements of cashflows. The Group’s unaudited interim condensed consolidated statements ofcomprehensive income contain all the related costs and expenses of the Weibo business,including allocation to the cost of revenues, sales and marketing expenses, productdevelopment expenses, and general and administrative expenses, which are incurred bySINA but related to the Weibo business. These allocations were based on proportionalcost allocation by considering proportion of the revenues, infrastructure usage metricsand labor usage metrics, among other things, attributable to the Group and are made ona basis considered reasonable by mutual managements.

Total cost and expenses allocated from SINA were as follows:


2020 2021

(In thousands)

Cost of revenues $14,210 $11,544Sales and marketing 1,079 2,832Product development 7,112 7,692General and administrative 6,725 6,728

$29,126 $28,796

While the costs and expenses allocated to the Group for these items are not necessarilyindicative of the costs and expenses that would have been incurred if the Group hadtransactions with independent third party suppliers directly or hired more employees, theCompany does not believe that there is any significant difference between the nature andamounts of these allocated costs and expenses and the ones that would have been incurredif the Group had transactions with independent third party suppliers directly or hired moreemployees.


– IB-12 –



Consolidation

The unaudited interim condensed consolidated financial statements include the accountsof the Company, its wholly-owned subsidiaries, VIEs, of which the Company is theprimary beneficiary, and VIEs’ subsidiaries. All significant intercompany balances andtransactions have been eliminated.

To comply with PRC laws and regulations, the Group provides a substantial amount of itsservices in China via the VIEs, which hold critical operating licenses that enable theGroup to do business in China. Most of the Group’s revenues, costs and expense, and netincome in China were generated directly or indirectly through the VIEs. The Company,through the WFOE, has signed various agreements with the VIEs to allow the transfer ofeconomic benefits from the VIEs to the Company. The Group has determined that it is theprimary beneficiary of the VIEs through Weibo Technology’s contractual arrangementswith the VIEs. Accordingly, the Company has consolidated the VIEs’ results of operationsand assets and liabilities in the Group’s financial statements pursuant to the United StatesGenerally Accepted Accounting Principles (“US GAAP”) for all the periods presented.

Shareholders of the VIEs are certain nominee shareholders from the Company or SINA.The capital for their investments in the VIEs is funded by the Company and recorded asinterest-free loans to these individuals. These loans were eliminated with the capital ofthe VIEs during consolidation. Each shareholder of the VIEs has agreed to transfer theirequity interest in the VIEs to Weibo Technology when permitted by PRC laws andregulations or to designees of the Company at any time for the amount of loansoutstanding. All voting rights of the VIEs, including without limitation the right toappoint all directors of the VIEs, has been assigned to Weibo Technology. WeiboTechnology has also entered into exclusive technical service agreements with the VIEsunder which Weibo Technology provides technical and other services to the VIEs inexchange for substantially all net income of the VIEs. In addition, the shareholders of theVIEs have pledged their shares in the VIEs as collateral for the non-payment of loans orfor the technical and other services fees due to Weibo Technology. As of December 31,2020 and September 30, 2021, the total amounts of interest-free loans to the VIEs’shareholders were $89.5 million and $90.7 million, respectively. The VIEs and VIEs’subsidiaries had accumulated deficit of $96.1 million and $186.1 million as of December31, 2020 and September 30, 2021, respectively, which were included in the Group’sunaudited interim condensed consolidated financial statements.


– IB-13 –




The following table sets forth the assets, liabilities, results of operations and cash flowsof the VIEs and VIEs’ subsidiaries taken as a whole, which are included in the Group’sunaudited interim condensed consolidated balance sheets and unaudited interimcondensed consolidated statements of comprehensive income:

As of

December 31,2020

September 30,2021

(In thousands)

Cash, cash equivalents and short-term investments $ 445,210 $ 359,508Accounts receivable 431,022 599,831Prepaid expenses and other current assets 55,653 445,338Amount due from SINA 31,142 28,175Property and equipment, net 692 1,872Operating lease assets 1,783 4,602Intangible assets 146,976 170,756Goodwill 61,712 128,576Long-term investments 394,745 412,122Deferred tax assets 15,392 15,542Others 223 245,006

Total assets $1,584,550 $2,411,328

Accounts payable $ 83,336 $ 114,551Accrued and other liabilities 341,552 414,080Deferred revenues 85,846 79,001Income taxes payable 26,417 101,337Amount due to the subsidiaries of the Group 968,138 1,666,777Operating lease liability 1,704 4,587Deferred tax liability 32,418 37,520Other non-current liabilities 2,102 11,715

Total liabilities $1,541,513 $2,429,568


– IB-14 –





2020 2021

(In thousands)

Net revenues $ 925,789 $1,286,641Net loss after intercompany service fee charge $(138,779) $ (90,069)


2020 2021

(In thousands)

Net cash provided by (used in) operating activities $(20,553) $ 363,351Net cash used in investing activities (30,331) (816,742)Net cash provided by financing activities 46,236 326,392

Net decrease in cash and cash equivalents $ (4,648) $(126,999)

Under the contractual arrangements with the VIEs, the Company has the power to directactivities of the VIEs through Weibo Technology and can have assets transferred freelyout of the VIEs without restrictions. Therefore, the Company considers that there is noasset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’subsidiaries, except for the registered capital and non-distributable reserve funds of theVIEs and VIEs’ subsidiaries, amounting to $196.6 million and $228.8 million as ofDecember 31, 2020 and September 30, 2021, respectively. Since the VIEs areincorporated as limited liability companies under the PRC Company Law, creditors of theVIEs do not have recourse to the general credit of the Company. There is currently nocontractual arrangement that would require the Company to provide additional financialsupport to the VIEs. As the Company is conducting certain businesses mainly through theVIEs, the Company may provide such support on a discretionary basis in the future,which could expose the Company to a loss. The total amount of costs and expensesallocated from SINA to the VIEs was $7.0 million and $2.6 million for the nine monthsended September 30, 2020 and 2021, respectively.


– IB-15 –




Unrecognized revenue-producing assets held by the VIEs include the Internet ContentProvision License, the Online Culture Operating Permit, the domain names ofWeibo.com, Weibo.cn and Weibo.com.cn and so on. Recognized revenue-producing assetsheld by the VIEs include game technology, live streaming platform technology,supplier-relationship contracts, and trademark and domain names, which were acquiredthrough the previous acquisitions. Unrecognized revenue-producing assets, includingcustomer lists relating to advertising and marketing services, VIP membership, andgame-related services, as well as trademarks, are also held by Weibo Technology.

The following is a summary of the VIE agreements with Weimeng. The VIE agreementswith Weimeng Chuangke are substantially the same as those described below:

Loan Agreements. Weibo Technology has granted interest-free loans to the shareholdersof Weimeng, who are senior officers of the Group or SINA, but not the controllingshareholders of SINA, with the sole purpose of providing funds necessary for thoseshareholders to make capital injections to Weimeng. The term of the loans is 10 years andWeibo Technology has the right, at its own discretion, to shorten or extend the term of theloans if necessary. In the consolidated financial statements, these loans are eliminatedwith the capital of Weimeng during consolidation.

Share Transfer Agreements. Each shareholder of Weimeng has granted Weibo Technologyan option to purchase his shares in Weimeng at a purchase price equal to the amount ofcapital injection. Weibo Technology may exercise such option at any time until it hasacquired all shares of Weimeng, subject to applicable PRC laws. The options will beeffective until the earlier of (i) Weibo Technology and the shareholders of Weimeng havefully performed their obligations under these agreements, and (ii) Weibo Technology andthe shareholders of Weimeng agree in writing to terminate these agreements.

Loan Repayment Agreements. Each shareholder of Weimeng has agreed with WeiboTechnology that the interest-free loans under the loan agreements shall only be repaidthrough share transfers. Once the share transfers are completed, the purchase price for theshare transfer will be set off against the loan repayment. These agreements will beeffective until the earlier of (i) Weibo Technology and the shareholders of Weimeng havefully performed their obligations under these agreements, and (ii) Weibo Technology andthe shareholders of Weimeng agree in writing to terminate these agreements.

Agreement on Authorization to Exercise Shareholder’s Voting Power. Each shareholder ofWeimeng has authorized Weibo Technology to exercise all his voting power as ashareholder of the applicable VIE on all matters requiring shareholders’ approval underPRC laws and regulations and the articles of association of Weimeng, including withoutlimitation to the appointment of directors, transfer, mortgage or dispose of Weimeng’sassets, transfer of any equity interest in Weimeng, and merger, split, dissolution andliquidation of Weimeng. The authorizations are irrevocable and will not expire untilWeimeng dissolves.


– IB-16 –




Share Pledge Agreements. Each shareholder of Weimeng has pledged all of his shares inWeimeng and all other rights relevant to his rights in those shares to Weibo Technologyas security for his obligations to pay off all debts to Weibo Technology under the loanagreement. In the event of default of such obligations, Weibo Technology will be entitledto certain rights, including transferring the pledged shares to itself and disposing of thepledged shares through sale or auction. During the term of the agreements, WeiboTechnology is entitled to receive all dividends and distributions paid on the pledgedshares. The pledges will be effective until the earlier of (i) the third anniversary of the duedate of the last guaranteed debt, (ii) Weimeng and its shareholders have fully performedtheir obligations under these agreements, and (iii) Weibo Technology consents toterminate these agreements.

Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement andTrademark License Agreement. Weimeng has entered into an exclusive technical servicesagreement, an exclusive sales agency agreement and a trademark license agreement withWeibo Technology. Under the exclusive technical services agreement, Weibo Technologyis engaged to provide technical services for Weimeng’s online advertising and otherrelated businesses. Under the exclusive sales agency agreement, Weimeng has grantedWeibo Technology the exclusive right to distribute, sell and provide agency services forall the products and services provided by Weimeng. Due to its control over Weimeng,Weibo Technology has the right to determine the service fee to be charged to Weimengunder these agreements by considering, among other things, the technical complexity ofthe services, the actual cost that may be incurred for providing such services, theoperations of Weimeng, applicable tax rates, planned capital expenditure and businessstrategies. These agreements can only be prematurely terminated by Weibo Technology,and will not expire until Weimeng dissolves. Under the trademark license agreement,Weibo Technology has granted Weimeng trademark licenses to use the trademarks held byor licensed to Weibo Technology in specific areas, and Weimeng is obligated to paylicense fees to Weibo Technology. The term of this agreement is one year and isautomatically renewed provided there is no objection from Weibo Technology.

These VIE agreements provide Weibo Technology with the power to direct the activitiesthat most significantly affect the economic performance of the Group’s consolidated VIEsand enable the Group to receive substantially all of the economic benefits generated bythem. For the nine months ended September 30, 2020 and 2021, the total amount ofservice fees that Weibo Technology charged to Weimeng under these service agreementsand trademark license agreement was $528.6 million and $744.1 million, respectively,which were based on the actual cost incurred from providing the services and the cashposition and operations of Weimeng.

Weibo Technology, Weimeng Chuangke and Weimeng Chuangke’s shareholders haveentered into contractual arrangements which contain agreements and terms substantiallysimilar to Weibo Technology’s contractual arrangements with Weimeng and Weimeng’sshareholders described above.


– IB-17 –




In April 2020, WangTouTongDa (Beijing) Technology Co., Ltd., an entity affiliated withZhongWangTou (Beijing) Technology Co., Ltd., made an investment of approximatelyRMB10.7 million in Weimeng for 1% of Weimeng’s enlarged registered capital. Suchthird party minority stake holder is entitled to customary economic rights in proportionto its equity ownership, and certain minority shareholder rights such as the right toappoint a director to Weimeng’s three-member board of directors, and veto rights overcertain matters related to content decision, and certain future financings of Weimeng.

The third party minority stake holder is not a party to the contractual arrangementsmentioned above that are currently in effect among Weimeng, Weibo Technology andWeimeng’s other shareholders. As such, despite the fact that the Company is still able toenjoy economic benefits and exercise effective control over Weimeng and its subsidiaries,the Company is not able to purchase or have the third party minority stake holder pledgeits 1% equity interests in Weimeng in the same manner as agreed under existingcontractual arrangements, nor is it granted the authorization of voting rights over these1% equity interests. The Company believes Weibo Technology, the wholly-owned PRCsubsidiary, still controls and is the primary beneficiary of Weimeng as it continues to havea controlling financial interest in Weimeng pursuant to ASC 810-10-25-38A after theissuance of such 1% equity interests.

The Company believes that the contractual arrangements among the WFOE, VIEs andVIEs’ shareholders are in compliance with the current PRC laws and legally enforceable.However, uncertainties in the interpretation and enforcement of the PRC laws, regulationsand policies could limit the Company’s ability to enforce these contractual arrangements.As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiariesin the consolidated financial statements. The Company’s ability to control the VIEs alsodepends on the authorization by the shareholders of the VIEs to exercise voting rights onall matters requiring shareholder approval in the VIEs. The Company believes that theagreements on authorization to exercise shareholder’s voting power are legallyenforceable. In addition, if the legal structure and contractual arrangements with the VIEswere found to be in violation of any future PRC laws and regulations, the Company maybe subject to fines or other actions. The Company believes the possibility that it will nolonger be able to control and consolidate the VIEs as a result of the aforementioned risksand uncertainties is remote.


– IB-18 –


2. Significant Accounting Policies

Basis of presentation

The preparation of the Group’s unaudited interim condensed consolidated financialstatements is in conformity with U.S. GAAP. The unaudited interim condensedconsolidated financial statements include the accounts of Weibo, its wholly ownedsubsidiaries, VIEs, and VIEs’ subsidiaries. All significant intercompany balances andtransactions have been eliminated.

The unaudited interim condensed consolidated financial statements have been preparedon the same basis as the audited consolidated financial statements. In the opinion of theCompany, the accompanying unaudited interim condensed consolidated financialstatements contain all adjustments, consisting of only normal recurring adjustments,necessary for a fair statement of its financial position as of September 30, 2021, its resultsof operations and cash flows for the nine months ended September 30, 2020 and 2021.The unaudited interim condensed consolidated balance sheet as of December 31, 2020,was derived from audited financial statements as of that date, but does not contain all ofthe footnote disclosures required by U.S. GAAP for a complete set of financialstatements. Accordingly, these financial statements should be read in conjunction with theaudited consolidated financial statements and related footnotes for the year endedDecember 31, 2020.

Use of estimates

Conformity with U.S. GAAP requires the use of estimates and judgments that affect thereported amounts in the unaudited interim condensed consolidated financial statementsand accompanying notes. These estimates form the basis for judgments the managementmakes about the carrying values of the assets and liabilities, which are not readilyapparent from other sources. U.S. GAAP requires making estimates and judgments inseveral areas, including, but not limited to, the basis of consolidation, revenuerecognition, fair value accounting, income taxes, long-term investments, goodwill andother long-lived assets, allowances for credit losses, stock-based compensation, theestimated useful lives of assets, convertible debt, business combination, and foreigncurrency. The management bases the estimates and judgments on historical informationand on various other assumptions that management believes are reasonable under thecircumstances. Actual results could differ materially from such estimates.

Revenue recognition

Under ASC 606, revenues are recognized when control of the promised goods or servicesis transferred to customers, in an amount that reflects the consideration the Group expectsto be entitled to in exchange for those goods or services. The Group identifies its contractswith customers and all performance obligations within those contracts. The Group thendetermines the transaction price and allocates the transaction price to the performanceobligations within the Group’s contracts with customers, recognizing revenue when, or as,the Group satisfies its performance obligations.


– IB-19 –




The Group does not believe that significant management judgments are involved inrevenue recognition, but the amount and timing of the Group’s revenues could bedifferent for any period if management made different judgments. Certain customers mayreceive sales rebates, which are accounted for as variable consideration. The Groupestimates annual expected revenue volume of each individual agent with reference to theirhistorical results. The Group recognizes revenue for the amount of fees it receives fromits advertisers, after deducting estimated sales rebates and net of value-added tax (“VAT”)under ASC 606. The Group believes that there will not be significant changes to itsestimates of variable consideration.

Revenue disaggregated by revenue source for the nine months ended September 30, 2020and 2021 consists of the following:


2020 2021

(In thousands)

Advertising and marketing revenues $1,032,678 $1,429,969Value-added services revenues 143,843 210,827

Total revenues $1,176,521 $1,640,796

The Group enters into contracts with its customers, which may give rise to contract assets(unbilled revenue) or contract liabilities (deferred revenue). The payment terms andconditions within the Group’s contracts vary by the type and location of its customers andproducts or services purchased, the substantial majority of which are due in less than oneyear. Deferred revenues related to unsatisfied performance obligations at the end of theperiod are mainly from the customer advance of the advertising and marketing servicesand the sales of the fee-based services, such as VIP membership, live streaming, andvirtual currency or in-game virtual items sold for game related services. The deferredrevenues are recognized based on customers’ consumption or amortized on a straight-linebasis through the service period for different products/services. Due to the generallyshort-term duration of the contracts, the majority of the performance obligations aresatisfied in the following reporting period. The amount of revenue recognized that wasincluded in the deferred revenue balance at the beginning of the period was $120.1million for the nine months ended September 30, 2021.

Practical Expedients and Exemptions

The Group generally expenses sales commissions when incurred because the amortizationperiod is generally one year or less. These costs are recorded within sales and marketingexpenses.


– IB-20 –




Advertising and marketing revenues

Advertising and marketing revenues are derived principally from online advertising,including social display ads and promoted marketing. Social display ad arrangementsallow customers to place advertisements on particular areas of the Group’s platform orwebsite in particular formats and over particular periods of time, which is typically nomore than three months. The Group enters into cost per mille (“CPM”), or cost perthousand impressions, advertising arrangements with the customers, under which theGroup recognizes revenues based on the number of times that the advertisement has beendisplayed. The Group also enters into cost per day (“CPD”) advertising arrangements withcustomers, under which the Group recognizes revenues ratably over the contract periods.Promoted marketing arrangements are primarily priced based on CPM. Under the CPMmodel, customers are obligated to pay when the advertisement is displayed.

The Group’s majority revenue transactions are based on standard business terms andconditions, which are recognized net of agency rebates. The agency rebates are accountedfor as variable consideration and are estimated during interim periods based on estimatedannual revenue volume of each individual agent with reference to their historical results,which involves accounting judgment. The Group believes its estimation approach invariable consideration results in revenue recognition in a manner consistent with theunderlying economics of the transaction.

The Group’s contracts with customers may include multiple performance obligations,which primarily consist of combinations of service to allow customers to placeadvertisements on different areas of its platform or website. For such arrangements,advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognitionpurposes. The estimation of stand-alone selling price involves significant judgment,especially for the deliverables that have not been sold separately. For those deliverables,the Group determines best estimate of the stand-alone selling price by taking intoconsideration of the pricing of advertising areas of the Group’s platform or website withsimilar popularities and advertisements with similar formats and quoted prices fromcompetitors and other market conditions. The Group believes the estimation approach instand-alone selling price and allocation of the transaction price on a relative stand-aloneselling price to each performance obligation results in revenue recognition in a mannerconsistent with the underlying economics of the transaction and the allocation principleincluded in ASC 606. Revenues recognized with reference to best estimation of sellingprice were immaterial for all periods presented. Most of such contracts have allperformance obligations completed within one year. Changes in judgments on theseassumptions and estimates could materially impact the timing or amount of revenuerecognition. Contracts with customers of online advertising may require cooperation fromthird parties. The Group pays a predetermined portion of revenues earned fromadvertising contracts to the third parties such as key opinion leaders who participate inadvertising and promotion activities by monetizing their social assets. The Group hasdetermined that it is the principal in these transactions, as it has primary responsibility forfulfilling all the obligations related to advertising contracts. The Group has discretion inestablishing pricing of the contracts and controls the advertising inventory before thedelivery to customers. The Group records revenues derived from such contracts on a grossbasis and the portion paid to the third parties is recognized as cost of revenues.


– IB-21 –




Advertising and marketing revenues (continued)

Revenues from barter transactions are recognized during the period in which theadvertisements are displayed on the Group’s properties. Barter transactions in whichphysical goods or services are received in exchange for advertising services are recordedbased on the fair values of the goods or services received.

Value-added services revenues

The Group generates value-added services revenues principally from fee-based services,mainly including VIP membership, live streaming, and game-related services. Othervalue-added services revenues mainly include the revenues from the provision of trafficacquisition services to various customers. Revenues from these services are recognizedwhen control of the promised services is transferred to customers, in an amount thatreflects the consideration the Group expects to be entitled to in exchange for thoseservices.

VIP membership. VIP membership mainly includes a service package consisting of oneperformance obligation of providing user certification and preferential benefits, such asdaily priority listings and higher quota for following user accounts. Prepaid VIPmembership fees are recorded as deferred revenue and recognized as revenue ratably overthe contract period of the membership service.

Live streaming. Live streaming generates revenue from sales of virtual items on thelive-streaming platform (“Yizhibo”). Users can access the platform and view the livestreaming content and interact with the broadcasters for free.

The Group designs, creates and offers various virtual items for sales to users withpre-determined selling prices. Each virtual item is considered as a distinctive performanceobligation. Sales proceeds are recorded as deferred revenue and recognized as revenuebased on the consumption of the virtual items. Users can purchase and present virtualitems to broadcasters to show support for their favorite ones. Under the arrangementswith broadcasters or broadcaster agencies, the Group shares with them a portion of therevenues derived from the consumption of virtual items. Revenues derived from the saleof virtual items are recorded on a gross basis as the Group has determined that it acts asthe principal to fulfill all obligations related to the live streaming services. The portionpaid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. TheGroup does not have further obligations to the user after the virtual items are consumed.

Game-related services. Game-related service revenues are mostly generated from thepurchase of virtual items by game players through the Group’s platform, including items,avatars, skills, privileges or other in game consumables, features or functionality, withinthe games. The Group’s performance obligation is to provide on-going game services toplayers who purchased virtual items to gain an enhanced game-playing experience. Eachvirtual item is considered as a distinctive performance obligation. The Group collects


– IB-22 –




Value-added services revenues (continued)

payments from the game players in connection with the sale of virtual currency, whichcan be used to purchase virtual items in online games. For games co-operated with thirdparty developers, revenue is recorded on a gross basis for games that the Group is actingas the principal in fulfilling all obligations related to the games and revenue is recordednet of predetermined revenue sharing with the game developers for games in which theGroup is not acting as the principal in fulfilling all obligations. Sales of virtual currenciesare recognized as revenues over the estimated lifespans of in-game virtual items. Theestimated lifespans of different virtual items are determined by the management based oneither the expected user relationship periods or the stipulated period of validity of therelevant virtual items depending on the respective term of virtual items. Virtual currencysold for game-related services in excess of recognized revenues is recorded as deferredrevenues.

Cost of revenues

Cost of revenues consists mainly of costs associated with the maintenance of platform,which primarily include bandwidth and other infrastructure costs, revenue-share cost,advertisement production cost, labor cost and turnover taxes levied on the revenues, partof which were allocated from SINA. The Group is subject to 3% cultural businessconstruction fees for its advertising and marketing revenues, which is included in cost ofrevenues. Starting from July 1 2019, the 3% cultural business construction fees wasreduced to 1.5%. Moreover, as part of the measures taken by the government to ease thenegative impact from Covid-19 pandemic, the cultural business construction fees wereexempted for the fiscal years of 2020 and 2021. An aggregate of $15.7 million and $18.8million cultural business construction fees was exempted for the nine months endedSeptember 30, 2020 and 2021, respectively.

Sales and marketing expenses

Sales and marketing expenses consist mainly of online and offline advertising andpromotional expenses, salary, benefits and commission expenses, and facility expenses.Advertising and promotional expenses generally represent the expenses of promotions ofcorporate image and product marketing. The Group expenses all advertising andpromotional expenses as incurred and classifies these expenses under sales and marketingexpenses. Pursuant to the adoption of ASC 606, the recognition of revenues and expensesat fair value for advertising barter transactions has resulted in an increase of revenue andadvertising expenses. For the nine months ended September 30, 2020 and 2021, theadvertising and promotional expenses were $230.3 million and $312.9 million,respectively.


– IB-23 –



Product development expenses

Product development expenses consist mainly of payroll-related expenses andinfrastructure costs incurred for enhancement to and maintenance of the Group’splatform, as well as costs associated with new product development and productenhancements, part of which were allocated from SINA. The Group expenses all costsincurred for the planning, post implementation phases of development and costsassociated with repair or maintenance of the existing site or the development of platformcontent. Since inception, the amount of costs qualifying for capitalization has beenimmaterial and, as a result, all product development costs have been expensed asincurred.


All stock-based awards to employees and directors, such as stock options and restrictedshare units (“RSUs”), are measured at the grant date based on the fair value of the awards.Stock-based compensation, net of forfeitures, is recognized as expense on a straight-linebasis over the requisite service period, which is the vesting period.

The Group uses the Black-Scholes option pricing model to estimate the fair value of stockoptions. The determination of estimated fair value of stock-based payment awards on thegrant date using an option pricing model is affected by the fair value of the Company’sordinary shares as well as assumptions regarding a number of complex and subjectivevariables. These variables include the expected value volatility of the Company over theexpected term of the awards, actual and projected employee stock option exercisebehaviors, a risk-free interest rate and expected dividends, if any. Options grantedgenerally vest over four years.

The Group recognizes the estimated compensation cost of restricted share units based onthe fair value of its ordinary shares on the date of the grant. The Group recognizes thecompensation cost, net of estimated forfeitures, over a vesting term of generally fouryears for service-based restricted share units. The Group also recognizes thecompensation cost of performance-based restricted share units, net of estimatedforfeitures, if it is probable that the performance condition will be achieved at the end ofeach reporting period.

Forfeitures are estimated at the time of grant and revised in subsequent periods if actualforfeitures differ from those estimates. The Group uses historical data to estimatepre-vesting option and records stock-based compensation expense only for those awardsthat are expected to vest. See Note 7 Stock-based Compensation for further discussion onstock-based compensation.


– IB-24 –



Taxation

Income taxes. Income taxes are accounted for using the asset and liability approach.Under this approach, income tax expense is recognized for the amount of taxes payableor refundable for the current year. In addition, deferred tax assets and liabilities arerecognized for expected future tax consequences of temporary differences between thefinancial reporting and tax bases of assets and liabilities, and for operating losses and taxcredit carry forwards. The Group records a valuation allowance to reduce deferred taxassets to an amount for which realization is more likely than not.

Uncertain tax positions. To assess uncertain tax positions, the Group applies a more likelythan not threshold and a two-step approach for the tax position measurement and financialstatement recognition. Under the two-step approach, the first step is to evaluate the taxposition for recognition by determining if the weight of available evidence indicates thatit is more likely than not that the position will be sustained, including resolution of relatedappeals or litigation processes, if any. The second step is to measure the tax benefit as thelargest amount that is more than 50% likely of being realized upon settlement.

Short-term investments

Short-term investments represent bank time deposits and wealth management productswhich are certain deposits with variable interest rates or principal not-guaranteed withcertain financial institutions. Their original maturities are of greater than three months butless than one year. In accordance with ASC 825, Financial Instruments, for wealthmanagement products with the interest rate indexed to performance of underlying assets,the Group elected the fair value method at the date of initial recognition and carried theseinvestments at fair value. Changes in the fair value are reflected in the unaudited interimcondensed consolidated statements of comprehensive income as interest income.

Credit losses

In 2016, the FASB issued ASC Topic 326, which amends previously issued guidanceregarding the impairment of financial instruments by creating an impairment model thatis based on expected losses. The guidance is applicable to accounts receivable and theGroup adopted ASC Topic 326 on January 1, 2020. Accounts receivable are recorded atthe original amounts less an allowance for any potential uncollectible amounts. TheGroup makes estimates of expected credit and collectability trends for the allowance forcredit losses based upon assessment of various factors, including historical experience,the age of the accounts receivable balances, credit-worthiness of the customers, currenteconomic conditions, reasonable and supportable forecasts of future economic conditions,and other factors that may affect its ability to collect from the customers. The Group alsoprovides specific provisions for allowance when facts and circumstances indicate that thereceivable is unlikely to be collected. Expected credit losses for accounts receivable arerecorded as general and administrative expenses on the unaudited interim condensedconsolidated statements of comprehensive income. The initial impact of applying ASCTopic 326 on the consolidated financial statements is immaterial to the Group’s retainedearnings as of January 1, 2020.


– IB-25 –



Credit losses (continued)

ASC Topic 326 is also applicable to the loans to and interest receivable from other relatedparties included in the prepaid expenses and other current assets on the unaudited interimcondensed consolidated balance sheets. Management estimates the allowance for creditlosses on loans and interest receivable not sharing similar risk characteristic on anindividual basis, based on lifetime expected credit losses of these loans and interestreceivable by estimating loan collection schedule, then discounting these cash flows totheir present values. The key factors considered when determining the above allowancesfor credit losses include estimated loan collection schedule, discount rate, financialcondition and performance data of the borrowers and reasonable and supportableperformance forecasts.

Fair value measurements


All financial assets and liabilities are recognized or disclosed at fair value in theunaudited interim condensed consolidated financial statements on a recurring basis.Accounting guidance defines fair value as the price that would be received from sellingan asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date. When determining the fair value measurements forassets and liabilities required or permitted to be recorded at fair value, the Groupconsiders the principal or most advantageous market in which it would transact and itconsiders assumptions that market participants would use when pricing the asset orliability.

The Group measures the equity method investments at fair value on a non-recurring basisonly if an impairment charge were to be recognized. For those investments withoutreadily determinable fair value, the Group measures them at fair value when observableprice changes are identified or impairment charge was recognized. The fair values of theGroup’s privately held investments as disclosed are determined based on the discountedcash flow model using the discount curve of market interest rates or based on the similartransaction price in the market directly. The fair values of the Group’s long-terminvestments in the equity securities of publicly listed companies are measured usingquoted market prices. The Group’s non-financial assets, such as intangible assets,goodwill, fixed assets and operating lease assets, are measured at fair value only if theyare determined to be impaired.


– IB-26 –



Fair value measurements (continued)

Financial instruments (continued)

Accounting guidance establishes a fair value hierarchy that requires an entity to maximizethe use of observable inputs and minimize the use of unobservable inputs when measuringfair value. A financial instrument’s categorization within the fair value hierarchy is basedupon the lowest level of input that is significant to the fair value measurement.Accounting guidance establishes three levels of inputs that may be used to measure fairvalue:

• Level 1 applies to assets or liabilities for which there are quoted prices in activemarkets for identical assets or liabilities.

• Level 2 applies to assets or liabilities for which there are inputs other than quotedprices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices foridentical asset or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or model-derived valuations in which significantinputs are observable or can be derived principally from, or corroborated by,observable market data.

• Level 3 applies to asset or liabilities for which there are unobservable inputs to thevaluation methodology that are significant to the measurement of the fair value ofthe assets or liabilities.

The carrying amount of cash and cash equivalents, short-term investments, accountsreceivable due from third parties, accounts receivable due from Alibaba, accountsreceivable due from other related parties, amount due from SINA, accounts payable,accrued and other liabilities approximates fair value because of their short-term nature.See Note 15 Fair Value Measurement for additional information.

Long-term investments

Long-term investments are comprised of investments in publicly traded companies,privately held companies, and limited partnerships. The Group uses the equity method toaccount for ordinary-share-equivalent equity investments on which it has significantinfluence but does not own a majority equity interest or otherwise control.


– IB-27 –




The Group measures investments in equity securities, other than equity methodinvestments, at fair value through earnings. For those investments without readilydeterminable fair values, the Group elects to record these investments at cost, lessimpairment, plus or minus subsequent adjustments for observable price changes. Underthis measurement alternative, changes in the carrying value of the investments will berecognized in unaudited interim condensed consolidated statement of comprehensiveincome, whenever there are observable price changes in orderly transactions for theidentical or similar investment of the same issuer.

Pursuant to ASC 321, for equity investments measured at fair value with changes in fairvalue recorded in earnings, the Group does not assess whether those securities areimpaired. For equity investments without readily determinable fair value for which theGroup has elected to use the measurement alternative, the Group makes a qualitativeassessment of whether the investment is impaired at each reporting date, applyingsignificant judgement in considering various factors and events including a) adverseperformance of investees; b) adverse industry developments affecting investees; and c)adverse regulatory, social, economic or other developments affecting investees. If aqualitative assessment indicates that the investment is impaired, the Group estimates theinvestment’s fair value in accordance with the principles of ASC 820. If the fair value isless than the investment’s carrying value, the Group recognizes an impairment loss in netincome equal to the difference between the carrying value and fair value. Significantjudgement is applied by the Group in estimating the fair value to determine if animpairment exists, and if so, to measure the impairment losses for these equity securityinvestments. These judgements include the selection of valuation methods in estimatingfair value and the determination of key valuation assumptions used, including cash flowforecasts and critical assumptions used in cash flow forecasts, such as the investees’revenue growth rate, terminal growth rate, discount rate, selection of comparablecompanies and multiples, estimated volatility rate and discount for lack of marketability.

Investments in entities which the Group can exercise significant influence and holds aninvestment in voting common shares or in-substance common shares (or both) of theinvestee but does not own a majority equity interest or control are accounted for using theequity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment– Equity Method and Joint Ventures. Under the equity method, the Group initially recordsits investments at cost and the difference between the cost of the equity investee and thefair value of the underlying equity in the net assets of the equity investee is recognizedas equity method goodwill, which is included in the equity method investment on theunaudited interim condensed consolidated balance sheets. The Group subsequentlyadjusts the carrying amount of the investments to recognize the Group’s proportionateshare of each equity investee’s net income or loss into earnings after the date ofinvestment. The Group evaluates the equity method investments for impairment underASC 323. An impairment loss on the equity method investments is recognized in earningswhen the decline in value is determined to be other-than-temporary.


– IB-28 –




In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities(Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), andDerivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321,Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). Theamendments in this update clarify the interaction of the accounting for equity securitiesunder Topic 321 and investments accounted for under the equity method of accounting inTopic 323 and the accounting for certain forward contracts and purchased optionsaccounted for under Topic 815. For public business entities, the amendments in thisUpdate are effective for fiscal years beginning after December 15, 2020, and interimperiods within those fiscal years. For all other entities, the amendments are effective forfiscal years beginning after December 15, 2021, and interim periods within those fiscalyears. Early adoption is permitted. The Group adopted the ASU on January 1, 2021, whichdid not have a material impact on the unaudited interim condensed consolidated financialstatements.

Business combination

Business combinations are recorded using the purchase method of accounting, and thecost of an acquisition is measured as the aggregate of the fair values at the date ofexchange of the assets given, liabilities incurred, and equity instruments issued as well asthe contingent considerations and all contractual contingencies as of the acquisition date.The costs directly attributable to the acquisition are expensed as incurred. Identifiableassets, liabilities and contingent liabilities acquired or assumed are measured separatelyat their fair value as of the acquisition date, irrespective of the extent of anynon-controlling interests. The excess of the (i) the total of consideration paid, fair valueof the non-controlling interests and acquisition date fair value of any previously heldequity interest in the subsidiary acquired over (ii) the fair value of the identifiable netassets of the subsidiary acquired is recorded as goodwill. If the consideration ofacquisition is less than the fair value of the net assets of the subsidiary acquired, thedifference is recognized directly in the unaudited interim condensed consolidatedstatements of comprehensive income.

Leases

In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases(Topic 842)”, which requires a lessee to recognize assets and liabilities arising fromoperating leases. A lessee should recognize a liability to make lease payments (the LeaseLiability) and a right-of-use asset (the Operating Lease Assets) representing its right touse the underlying asset for the lease term. For leases with a term of twelve months orless, a lessee is permitted to make an accounting policy choice not to recognize leaseassets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11,which provides another transition method in addition to the existing transition methods byallowing entities to initially apply the new leases standard at the effective date andrecognize a cumulative-effect adjustment to the opening balance of retained earnings inthe period of adoption and to not retrospectively adjust prior periods financial statements.


– IB-29 –



Leases (continued)

On January 1, 2019, the Group adopted the new lease standard using the transition methodby applying the standard to all leases existing at the date of initial application. The Groupchose to not recognize lease assets and lease liabilities for leases with a term of twelvemonths or less, to not separate non-lease components from lease components, and to notreassess lease classification, treatment of initial direct costs or whether an existing orexpired contract contains a lease according to the practical expedients permitted under thetransition method.

The Group did not retrospectively adjust the prior comparative periods. Under the newlease standard, the Group determines if an arrangement is or contains a lease at inception.Right-of-use assets and liabilities are recognized at lease commencement date based onthe present value of remaining lease payments over the lease terms. The Group considersonly payments that are fixed and determinable at the time of lease commencement.

Long-lived assets


Property and equipment are stated at cost less accumulated depreciation, amortization andimpairment, if any. Depreciation is computed using the straight-line method over theestimated useful lives of the assets, generally from three to four years for computers andequipment and five years for furniture and fixtures. Leasehold improvements areamortized over the shorter of the estimated useful lives of the assets or the remaininglease term. Depreciation expenses were $18.9 million and $24.3 million for the ninemonths ended September 30, 2020 and 2021, respectively.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiableassets and liabilities acquired as a result of the Group’s acquisitions of interests in itssubsidiaries, consolidated VIEs and VIEs’ subsidiaries. The Group assesses goodwill forimpairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles –Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment atthe reporting unit level at least annually and more frequently upon the occurrence ofcertain events, as defined by ASC 350-20. The guidance provides option that the Groupmay first assess qualitative factors to determine whether it is necessary to perform thequantitative goodwill impairment test, by taking into consideration of macroeconomics,overall financial performance, industry and market conditions and the share price of theGroup. If determined to be necessary, the quantitative impairment test shall be used toidentify goodwill impairment and measure the amount of a goodwill impairment loss tobe recognized (if any). Application of a goodwill impairment test requires significantmanagement judgment, including the identification of reporting units, assigning assetsand liabilities to reporting units, assigning goodwill to reporting units, and determining


– IB-30 –



Long-lived assets (continued)

Goodwill (continued)

the fair value of each reporting unit. Judgment in estimating the fair value of reportingunits includes estimating future cash flows, determining appropriate discount rates andmaking other assumptions. Changes in these estimates and assumptions could materiallyaffect the determination of fair value for each reporting unit. For nine months endedSeptember 30, 2020 and 2021, no impairment indicator was noted by performingqualitative analysis, therefore, no provision was recorded.


Intangible assets arising from acquisitions are recognized at fair value upon acquisitionand amortized on a straight-line basis over their estimated useful lives, generally fromthree to ten years. Long-lived assets and certain identifiable intangible assets other thangoodwill to be held and used are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of such assets may not be recoverable.Determination of recoverability is based on an estimate of undiscounted future cash flowsresulting from the use of the asset and its eventual disposition. Measurement of anyimpairment loss for long-lived assets and certain identifiable intangible assets thatmanagement expects to hold or use is based on the amount by which the carrying valueexceeds the fair value of the asset. Judgment is used in estimating future cash flows,determining appropriate discount rates and making other assumptions. Changes in theseestimates and assumptions could materially affect the determination of the asset’s fairvalue.


The Group determines the appropriate accounting treatment of its convertible debt inaccordance with the terms in relation to the conversion feature. After considering theimpact of such features, the Group may account for such instrument as a liability in itsentirety, or separate the instrument into debt and equity components following therespective guidance described under ASC 815 Derivatives and Hedging and ASC 470Debt.

The debt discount, if any, together with related issuance cost are subsequently amortizedas interest expense over the contractual life. The Group presented the issuance costs ofdebt as a direct deduction from the related debt during the periods presented.


– IB-31 –



Convertible debt and unsecured senior notes (continued)

The unsecured senior notes are recognized initially at fair value, net of debt discounts orpremiums, if any, issuance costs and other incidental fees, all of which are recorded as adirect deduction of the proceeds received from issuing the unsecured senior notes and therelated accretion is recorded as interest expense in the unaudited interim condensedconsolidated statement of comprehensive income over the estimated term using theeffective interest method.

Deferred revenues

Deferred revenues consist of contractual billings in excess of recognized revenue andpayments received in advance of revenue recognition, which are mainly from thecustomer advance of the advertising and marketing services and the sales of the fee-basedservices, such as VIP membership, live streaming, and virtual currency or in-game virtualitems sold for game related services.

Non-controlling interests

For the Company’s majority-owned subsidiaries and VIE, non-controlling interests arerecognized to reflect the portion of their equity that is not attributable, directly orindirectly, to the Company as the controlling shareholder. To reflect the economic interestheld by non-controlling shareholders, net income/loss attributable to the non-controllingordinary shareholders is recorded as non-controlling interests in the Company’s unauditedinterim condensed consolidated statements of comprehensive income. Non-controllinginterests are classified as a separate line item in the equity section of the Company’sunaudited interim condensed consolidated balance sheets and have been separatelydisclosed in the Company’s unaudited interim condensed consolidated financialstatements to distinguish the interests from that of the Company.

Foreign currency

The Company’s reporting currency and functional currency is the U.S. dollar. TheGroup’s operations in China and in international regions use their respective currenciesas their functional currencies. The financial statements of these subsidiaries are translatedinto U.S. dollars using period-end rates of exchange for assets and liabilities and averagerates of exchange in the period for revenues, costs and expenses. Translation gains andlosses are recorded in accumulated other comprehensive income (loss) as a component ofshareholders’ equity. Translation gains or losses are not released to net income unless theassociated net investment has been sold, liquidated, or substantially liquidated.


– IB-32 –



Foreign currency (continued)

Foreign currency transactions denominated in currencies other than the functionalcurrency are translated into the functional currency using the exchange rate prevailing onthe transactions dates. Monetary assets and liabilities denominated in foreign currenciesare translated into the functional currency using the applicable exchange rates at thebalance sheet dates. Net gains and losses resulting from foreign exchange transactions areincluded in other income, net.

Foreign currency translation adjustments included in the Group’s unaudited interimcondensed consolidated statements of comprehensive income for the nine months endedSeptember 30, 2020 and 2021 were gains of $57.7 million and $34.9 million respectively.Net foreign currency transaction gains or losses arise from transacting in a currency otherthan the functional currency of the entity and the amounts recorded were immaterial foreach of the periods presented.

Net income per share

Basic net income per share is computed using the weighted average number of ordinaryshares outstanding during the period. Options and RSUs are not considered outstandingin the computation of basic earnings per share. Diluted net income per share is computedusing the weighted average number of ordinary shares and potential ordinary sharesoutstanding during the period, which include options to purchase ordinary shares,restricted share units and conversion of the convertible debt. The computation of dilutednet income per share does not assume conversion, exercise, or contingent issuance ofsecurities that would have an anti-dilutive effect (i.e. an increase in earnings per shareamounts or a decrease in loss per share amounts) on net income per share. The Group usesthe two-class method to calculate net income per share though both classes share the samerights in dividends. Therefore, basic and diluted earnings per share are the same for bothclasses of ordinary shares.

Segment reporting

In accordance with ASC 280, Segment Reporting, the Group’s chief operating decisionmaker (“CODM”), the Chief Executive Officer, reviews the consolidated results whenmaking decisions about allocating resources and assessing performance of the Group asa whole. The Group currently operates and manages its business in two principal businesssegments globally – advertising and marketing services and value-added services.Information regarding the business segments provided to the Group’s CODM is at therevenue level and the Group currently does not allocate operating costs or assets to itssegments, as its CODM does not use such information to allocate resources or evaluatethe performance of the operating segments. As the Group’s long-lived assets aresubstantially all located in the PRC and substantially the Group’s revenues are derivedfrom within the PRC, no geographical information is presented.


– IB-33 –



Concentration of risks

Concentration of credit risk. Financial instruments that potentially subject the Group toa concentration of credit risk consist primarily of cash and cash equivalents, short-terminvestments and accounts receivable. In addition, with the majority of its operations inChina, the Group is subject to RMB currency risk and offshore remittance risk, both ofwhich have been difficult to hedge and the Group has not done so. The Group limits itsexposure to credit loss by depositing its cash and cash equivalents with financialinstitutions in the US, PRC and Hong Kong, which are among the largest and mostrespected financial institutions with high ratings from internationally-recognized ratingagencies, that management believes are of high credit quality. The Group periodicallyreviews these institutions’ reputations, track records and reported reserves.

As of December 31, 2020 and September 30, 2021, the Group had $3.0 billion and $2.2billion, respectively, in cash and bank time deposits (with terms generally up to twelvemonths) with large domestic banks in China. China promulgated a Bankruptcy Law thatcame into effect on June 1, 2007, which contains a separate article expressly stating thatthe State Council may promulgate implementation measures for the bankruptcy ofChinese banks based on the Bankruptcy Law. Under the Bankruptcy Law, a Chinese bankmay go bankrupt. In addition, since China’s concession to WTO, foreign banks have beengradually permitted to operate in China and have become significant competitors toChinese banks in many aspects, especially since the opening of RMB business to foreignbanks in late 2006. Therefore, the risk of bankruptcy on Chinese banks in which theGroup holds cash and bank deposits has increased. In the event that a Chinese bank thatholds the Group’s deposits goes bankrupt, the Group is unlikely to claim its deposits backin full, since it is unlikely to be classified as a secured creditor to the bank under the PRClaws.

Alibaba, as an advertiser, accounted for 8% and 6% of the Group’s total revenues for thenine months ended September 30, 2020 and 2021, respectively. No customer noradvertising agency accounted for 10% or more of the Group’s revenues. The Group’s top10 advertising agencies contributed to 32% and 40% of the Group’s revenues for the ninemonths ended September 30, 2020 and 2021, respectively.

As of December 31, 2020 and September 30, 2021, substantially all accounts receivablewere derived from the Group’s China operations. Excluding accounts receivable due fromAlibaba and other related parties, accounts receivable primarily consist of amounts duefrom advertising agencies and direct customers. Alibaba accounted for 28% and 14% ofthe Group’s net accounts receivable as of December 31, 2020 and September 30, 2021,respectively.


– IB-34 –



Concentration of risks (continued)

Concentration of foreign currency risks. The majority of the Group’s operations were inRMB. As of December 31, 2020 and September 30, 2021, the Group’s cash, cashequivalents and short-term investments balance denominated in RMB was $1,651.3million and $1,228.0 million, accounting for 47% and 45% of the Group’s total cash, cashequivalents and short-term investments balance at the respective dates. As of December31, 2020 and September 30, 2021, the Group’s aggregate net accounts receivable balance(including accounts receivable due from third parties, Alibaba and other related parties)denominated in RMB was $492.0 million and $683.7 million, respectively, accounting foralmost all of its net accounts receivable balance. As of December 31, 2020 and September30, 2021, the Group’s current liabilities balance denominated in RMB was $947.6 millionand $1,139.0 million, accounting for 99% and 98% of its total current liabilities balance.Accordingly, the Group may experience economic losses and negative impacts onearnings and equity as a result of exchange rate fluctuations of the RMB against the U.S.dollars. Moreover, the Chinese government imposes controls on the convertibility of theRMB into foreign currencies and, in certain cases, the remittance of currency out of thePRC. The Group may experience difficulties in completing the administrative proceduresnecessary to remit its RMB out of the PRC and convert it into foreign currency.

Recent accounting pronouncements

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt– Modifications and Extinguishments (Subtopic 470-50), Compensation – StockCompensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s OwnEquity (Subtopic 815-40) to clarify and reduce diversity in an issuer’s accounting formodifications or exchanges of freestanding equity-classified written call options (forexample, warrants) that remain equity classified after modification or exchange. Theamendments in this update are effective for all entities for fiscal years beginning afterDecember 15, 2021, including interim periods within those fiscal years. An entity shouldapply the amendments prospectively to modifications or exchanges occurring on or afterthe effective date of the amendments. The ASU is currently not expected to have amaterial impact on the unaudited interim condensed consolidated financial statements.


– IB-35 –


3. Cash, Cash Equivalents and Short-term Investments

Cash, cash equivalents and short-term investments consist of the following:

As of

December 31,2020

September 30,2021

(In thousands)

Cash and cash equivalents:Cash $1,814,844 $1,828,691

Short-term investments:Bank time deposits 1,515,880 665,983Wealth management products 166,168 212,504

Subtotal 1,682,048 878,487

Total cash, cash equivalents and short-terminvestments $3,496,892 $2,707,178

The carrying amounts of cash, cash equivalents and short-term investments approximatefair value. Interest income was $65.7 million and $56.9 million for the nine months endedSeptember 30, 2020 and 2021, respectively. The maturity dates for the time deposits andwealth management products were within one year.


– IB-36 –


4. Long-term Investments

Long-term investments comprised of investments in publicly traded companies, privatelyheld companies, and limited partnerships. The following sets forth the changes in theGroup’s long-term investments:

EquitySecuritiesWithoutReadily

DeterminableFair Values

EquityMethod

EquitySecurities

WithReadily

DeterminableFair Values Total

(In thousands)

Balance at December 31, 2020 $ 579,084 $311,161 $289,221 $1,179,466Investments made/transfers from

prepayments 67,957 159,584 – 227,541Income from equity method

investment, net – 17,688 – 17,688Dividend received from equity

method investments – (11,695) – (11,695)Disposal of investments (16,883) – (4,946) (21,829)Changes from measurement

alternative to consolidation(Note 6) (66,415) – – (66,415)

Reclassification of equityinvestment without readilydeterminable fair values to thosewith readily determinablefair values (142,000) – 142,000 –

Impairment on investments (102,594) – – (102,594)Fair value change through

earnings (26,810) – (6,263) (33,073)Currency translation adjustment 3,565 2,895 – 6,460

Balance at September 30, 2021 $ 295,904 $479,633 $420,012 $1,195,549

For the nine months ended September 30, 2021, the Group invested in private high-techcompanies totaling $68.0 million, which were accounted for under investments withoutreadily determinable fair values. These investments were to further expand and strengthenthe Group’s ecosystem and mainly included a further investment of $39.5 million in aleading mobile photo and video application in China during the nine months endedSeptember 30, 2021. The Group obtained control of the company operating the mobilephoto and video application through the step acquisition and recorded $27.6 million fairvalue change loss for the equity interest previously held by the Group immediately priorto the step acquisition. The impact of the transaction was reflected in the changes from


– IB-37 –



measurement alternative to consolidation. The Group also invested $159.6 million incompanies, which mainly included several investment funds and were accounted forunder equity method, for the nine months ended September 30, 2021.

The Group used measurement alternative for recording equity investments without readilydeterminable fair values at cost, less impairment, adjusted for subsequent observableprice changes. Based on ASU 2016-01, entities that elect the measurement alternative willreport changes in the carrying value of the equity investments in current earnings. Ifmeasurement alternative is used, changes in the carrying value of the equity investmentwill be recognized whenever there are observable price changes in orderly transactionsfor the identical or similar investment of the same issuer, and impairment charges will berecorded when any impairment indicators are noted and the fair value is lower than thecarrying value. The Group classifies the valuation techniques on investments that usesimilar identifiable transaction prices as Level 2 of fair value measurements.

The following table summarizes the total carrying value of the equity investmentsaccounted for under the measurement alternative as of September 30, 2021, includingcumulative upward and downward adjustments made to the initial cost basis of thesecurities. The Group recorded $130.2 million downward adjustment for the nine monthsended September 30, 2021, which included $102.6 million impairment for equityinvestments accounted for under the measurement alternative in the period. The Grouprecorded a $75.3 million full impairment for investment in Yixia Tech Co., Ltd. for thenine months ended September 30, 2021 due to its unsatisfied financial performance withno obvious upturn or potential financing solutions in the foreseeable future.

CumulativeResults

(In thousands)


Total carrying value at September 30, 2021 $ 295,904

Investments in marketable equity securities are valued using the market approach basedon the quoted prices in active markets at the reporting dates. The Group classified thevaluation techniques that use these inputs as Level 1 of fair value measurements. TheGroup recorded $6.3 million fair value loss, which was unrealized in the nine monthsended September 30, 2021, and the fair value of the marketable securities was $420.0million as of September 30, 2021.


– IB-38 –



The following table shows the carrying amount and fair value of the marketablesecurities:

Cost Basis

GrossUnrealized

Gains

GrossUnrealized

Losses Fair Value

(In thousands)

Showworld $ 81,385 $204,675 $ – $286,060Other marketable securities 15,274 – (12,113) 3,161

December 31, 2020 $ 96,659 $204,675 $(12,113) $289,221

Showworld $ 81,385 $105,384 $ – $186,769Didi $142,000 $ 91,243 $ – $233,243

September 30, 2021 $223,385 $196,627 $ – $420,012

One of the Group’s investees, Didi Global Inc. (“Didi”), a company operating a mobilitytechnology platform, completed its initial public offering and started trading on July 1,2021, China time. Therefore, investment in Didi amounting to $142.0 million wastransferred from measurement alternative to equity securities with readily determinablefair value, and a fair value change gain of $91.2 million was recorded for the nine monthsended September 30, 2021. The Group recorded a fair value change loss of $99.3 millionin Showworld for the nine months ended September 30, 2021.

5. Leases

The Group has operating leases primarily for office spaces in China. The determinationof whether an arrangement is or contains a lease is made at inception by evaluatingwhether the arrangement conveys the right to use an identified asset and whether theGroup obtains substantially all of the economic benefits from and has the ability to directthe use of the asset. Operating lease assets and liabilities are included in operating leaseright-of-use assets, operating lease liabilities, short-term, and operating lease liabilities,long-term on the Group’s unaudited interim condensed consolidated balance sheets. TheGroup has chosen to not recognize lease assets and lease liabilities for leases with a termof twelve months or less on the unaudited interim condensed consolidated balance sheets.


– IB-39 –



Operating lease right-of-use assets and operating lease liabilities are recognized based onthe present value of lease payments over the lease terms at the lease commencementdates. The Group uses its incremental borrowing rate in determining the present value oflease payments. The incremental borrowing rate is a hypothetical rate based on theGroup’s understanding of what interest the Group would pay in order to obtain aborrowing with an amount equivalent to the lease payments in a similar economicenvironment over the lease term on a collateralized basis from banks in China.

Certain lease agreements contain an option for the Group to renew a lease for a termagreed by the Group and the lessor or an option to terminate a lease earlier than thematurity dates. The Group considers these options, which may be elected at the Group’ssole discretion, in determining the lease term on a lease-by-lease basis. The Group’s leaseagreements generally do not contain any residual value guarantees or material restrictivecovenants. Certain of the Group’s leases contain free or escalating rent payment terms.The Group’s lease agreements generally contain lease and non-lease components.Non-lease components primarily include payments for maintenance and utilities. TheGroup has chosen to combine payments for non-lease components with lease paymentsand accounted them together as a single lease component. Payments under the leasearrangements are primarily fixed. However, for arrangements accounted for as a singlelease component, there may be variability in future lease payments as the amount of thenon-lease components is typically revised from one period to the next. Additionally,certain lease agreements with SINA contain variable payments, which are determinedbased on actual SINA headquarters spaces occupied by the Group and are expensed asincurred and not included in the operating lease assets and liabilities.

The components of lease cost for the nine months ended September 30, 2020 and 2021were as follows:


2020 2021

(In thousands)

Operating lease cost $3,515 $ 5,206Short-term lease cost 2,336 2,940Variable lease cost 3,349 4,041

Total lease cost $9,200 $12,187


– IB-40 –



Other information related to leases was as follows:


2020 2021

(In thousands)

Supplemental Cash Flows Information:Cash paid for amounts included in the

measurement of lease liabilities:Cash paid for operating leases $(3,922) $(5,824)Operating lease assets obtained in exchange for

operating lease liabilities $ 1,183 $ 8,301

Maturities of lease liabilities under operating leases as of September 30, 2021 were asfollows:

Twelve Months Ended September 30, (In thousands)

2022 $ 5,0012023 1,9792024 1,6172025 1,4362026 and thereafter 1,358

Total future payments for recognized leasing assets $11,391

Less: imputed interest 1,155

Total lease liabilities $10,236

As of September 30, 2021, operating leases recognized in lease liabilities have averageremaining lease terms of 3.6 years and weighted-average discount rate of 5%. As ofSeptember 30, 2021, the Group had no lease contract that has been entered into but notyet commenced.

6. Goodwill, Intangible Assets and Acquisitions

In the second quarter of 2021, the Group acquired another 51.2% equity interest of aninvestee operating a leading mobile photo and video application in China, Wutaapplication, in which the Group previously held 34.8% equity interest, with a cashconsideration of $39.5 million. The Group obtained the control and held 86% equityinterest in the investee upon completion of the transaction on May 1, 2021. An


– IB-41 –


6. Goodwill, Intangible Assets and Acquisitions (continued)

independent valuation firm was engaged by the Group to help the management determinethe fair value of assets and liabilities obtained from the transaction. The identifiableintangible assets acquired on the acquisition date included user base, domain names andoperating system of $16.5 million with estimated lives ranging from three to ten years.The intangible assets were measured at fair value upon acquisition primarily using royaltysavings method, multi-periods excess earning model and cost approach. Key assumptionsused in determining the fair value of these intangible assets include cash flow forecasts,the revenue growth rates, the discount rate, the customer attrition rate and replacementscosts.

The consideration of acquisition of the mobile app company was allocated based on thefair value of the assets acquired and the liabilities assumed as follows:

As ofMay 1, 2021

(In thousands)

Consideration $39,540Fair value of previously held equity interest 26,875Non-controlling interest 10,811

Total 77,226

Cash and short-term investments acquired 5,786Other assets acquired 6,801Identifiable intangible assets acquired 16,495Goodwill 51,034Liabilities assumed (2,890)

Total $77,226

In August, 2021, the Group acquired an E-sports team and related assets. An independentvaluation firm was engaged by the Group to help the management determine the fair valueof assets and liabilities obtained from the transaction. The identifiable intangible assetsacquired on acquisition date included game related assets of $19.3 million with estimatedlives of ten years. The intangible assets were measured at fair value upon acquisitionprimarily using royalty savings method and multi-periods excess earning method. Keyassumptions used in determining the fair value of these intangible assets include discountrate, terminal growth rate and royalty rate.


– IB-42 –



The consideration of acquisition of the E-sports team and related assets was allocatedbased on the fair value of the assets acquired and the liabilities assumed as follows:

As ofAugust 1, 2021

(In thousands)

Consideration $30,953

Identifiable intangible assets acquired 19,274Goodwill 14,745Liabilities assumed (3,066)

Total $30,953

The acquisition mentioned above resulted an immaterial impact to revenues and netincome for the nine months ended September 30, 2021. Since it did not have a materialimpact on the Group’s consolidated financial statements, pro forma disclosures have notbeen presented. Apart from what have been mentioned above, there was no acquisitionduring the nine months ended September 30, 2021.

The following sets forth the changes in the Group’s goodwill by segment:

Advertising&


services Total

(In thousands)

Balance as of December 31, 2020 $30,899 $30,813 $ 61,712Acquisition of the company operating

Wuta application 51,034 – 51,034Acquisition of an E-sports team – 14,745 14,745Currency translation adjustment 638 447 1,085

Balance as of September 30, 2021 $82,571 $46,005 $128,576

The increase of the balance in the nine months ended September 30, 2021 was mainly dueto the goodwill arising from the acquisition of the company operating Wuta applicationand the acquisition of the E-sports team and related assets.


– IB-43 –



The following table summarizes the Group’s intangible assets arising from acquisitions:

As of December 31, 2020 As of September 30, 2021

CostAccumulatedAmortization Net Cost

AccumulatedAmortization Net

(In thousands) (In thousands)

Game related $127,238 $ (2,199) $125,039 $148,262 $(12,588) $135,674Technology 9,544 (4,417) 5,127 10,029 (5,172) 4,857Trademark and

Domain name 12,788 (1,542) 11,246 19,796 (3,595) 16,201Supplier-relationship 10,253 (4,689) 5,564 10,391 (6,336) 4,055Others 2,449 (2,449) – 13,729 (3,760) 9,969

Total $162,272 $(15,296) $146,976 $202,207 $(31,451) $170,756

The amortization expense for the nine months ended September 30, 2020 and 2021 was$2.5 million and $15.9 million, respectively. As of September 30, 2021, estimatedamortization expenses for future periods are expected as follows:

Year Ended December 31, (In thousands)

The remainder of 2021 $ 6,1662022 24,3172023 22,8252024 21,1562025 and thereafter 96,292

Total expected amortization expense $170,756

7. Stock-Based Compensation

In March 2014, the Company adopted the 2014 Share Incentive Plan (the “2014 Plan”),which included the remaining 4.6 million shares from the terminated 2010 ShareIncentive Plan, plus an additional 1.0 million shares. On January 1, 2015, shares in the2014 Plan, which has a term life of ten years, were allowed a one-time increase in theamount equal to 10% of the total number of Weibo shares issued and outstanding on afully-diluted basis as of December 31, 2014. Each share in the 2014 Plan pool allows fora grant of a restricted share unit or option share. The Company intends to use such shareincentive plan to attract and retain employee talents. Stock-based compensation related tothe grants is amortized generally over four years on a straight-line basis (generally oneyear for performance-based restricted shares).


– IB-44 –



The following table sets forth the stock-based compensation included in each of therelevant accounts:


2020 2021*

(In thousands)

Cost of revenues $ 3,909 $ 5,690Sales and marketing 6,886 10,249Product development 22,890 29,260General and administrative 14,100 16,059

Total $47,785 $61,258

* Excluded non-cash stock-based compensation of $5.2 million to SINA employees charged throughAmount due from SINA for the nine months end September 30, 2021.

The following table sets forth a summary of the number of shares available for issuance:

SharesAvailable

(In thousands)


September 30, 2021 8,701

* During the nine months ended September 30, 2021, 4.4 million restricted share units were granted underthe 2014 Plan. No options were granted for the nine months ended September 30, 2021.


– IB-45 –



Stock Options

The following table sets forth a summary of option activities under the Company’s stockoption program:

OptionsOutstanding


Price

WeightedAverage


Life

AggregateIntrinsic

Value


(Inthousands)

December 31, 2020 551 $28.85 5.8 $6,683Granted – –Exercised (102) $12.11Cancelled/expired/forfeited (54) $32.68

September 30, 2021 395 $32.68 5.9 $5,847

Vested and expected to vest as ofSeptember 30, 2021 359 $32.68 5.9 $5,316

Exercisable as of September 30,2021 85 $32.68 5.9 $1,263

The total intrinsic value of options exercised for the nine months ended September 30,2021 was $4.0 million. The intrinsic value is calculated as the difference between themarket value on the date of exercise and the exercise price of the shares. As reported bythe NASDAQ Global Selected Market, the Company’s ending stock price as of December31, 2020 and September 30, 2021 was $40.99 and $47.49, respectively. Cash receivedfrom the exercise of stock options during the nine months ended September 30, 2020 and2021 was $0.1 million and $1.2 million, respectively. As of September 30, 2021,unrecognized compensation cost (adjusted for estimated forfeitures) was $3.6 million,which was related to non-vested stock options granted to the Company’s employees anddirectors. This cost is expected to be recognized over a weighted-average period of 2.9years.


– IB-46 –



Stock Options (continued)

Information regarding stock options outstanding at September 30, 2021 is summarizedbelow:

Range of Exercise PricesOptions

Outstanding


PriceOptions

Exercisable


Price

WeightedAverage


Life

(Inthousands)


$32.68 395 $32.68 85 $32.68 5.9

Restricted Share Units

Summary of Performance-Based Restricted Share Units

The following table sets forth a summary of performance-based restricted share unitactivities:

SharesGranted


Date FairValue

(In thousands)


September 30, 2021 11 $54.17

As of September 30, 2021, there was no material unrecognized compensation cost(adjusted for estimated forfeitures), which was related to performance-based restrictedshare units granted to the Company’s employees.


– IB-47 –



Restricted Share Units (continued)

Summary of Service-Based Restricted Share Units

The following table sets forth a summary of service-based restricted share unit activities:

SharesGranted


Date FairValue

(In thousands)


September 30, 2021 6,877 $46.72

As of September 30, 2021, unrecognized compensation cost (adjusted for estimatedforfeitures) was $232.9 million, which was related to non-vested service-based restrictedshare units granted to the Company’s employees and directors. This cost is expected tobe recognized over a weighted-average period of 3.3 years. The total fair value based onthe vesting date of the restricted share units vested was$66.9 million for the nine monthsended September 30, 2021.


– IB-48 –


8. Other Balance Sheet Components

As of

September 30,2020

December 31,2020

September 30,2021

(In thousands)

Accounts receivable, net:Due from third parties $343,220 $579,502Due from Alibaba 135,321 98,262Due from other related parties 48,625 41,229

Total gross amount$527,166 $718,993

Allowance for credit losses:Balance at the beginning of the

year/period (36,594) (36,594) (35,156)Additional provision charged to expenses,

net (52,900) (53,124) (13,160)Write-off 32,670 54,562 13,033

Balance at the end of the year/period (56,824) (35,156) (35,283)

$492,010 $683,710

Prepaid expenses and other current assets:Rental and other deposits $ 1,186 $ 876Deductible value-added taxes 598 4,545Investment prepayment(1) 15,308 310Loans to and interest receivable from other

related parties (note 10)(2) 158,622 283,904Loans to and interest receivable from third

parties(2) 41,784 575,323Advertising prepayment 18,888 9,471Prepayment to outsourced service providers 3,719 3,809Amounts deposited by users(3) 45,745 51,412Content fees 3,080 199Others 7,827 14,195

$296,757 $944,044


– IB-49 –



As of

September 30,2020

December 31,2020

September 30,2021

(In thousands)

Property and equipment, net:Computers and equipment $ 165,880 $ 183,829Leasehold improvements 6,429 6,923Furniture and fixtures 2,159 2,310Others 5,077 7,150

Property and equipment, gross 179,545 200,212Accumulated depreciation (118,913) (135,816)

$ 60,632 $ 64,396

Other non-current assetsInvestment related deposits(4) $ 15,450 $ 410,741Prepayment for purchase of SINA Plaza(5) – 131,859Deferred tax assets 27,020 27,325Others 2,126 7,702

$ 44,596 $ 577,627

Accrued and other liabilities(6):Payroll and welfare $ 126,023 $ 177,235Marketing expenses 59,410 77,339Sales rebates 222,064 296,560Professional fees 3,880 7,482VAT and other tax payable 49,971 57,339Amounts due to users(3) 45,745 51,412Unpaid consideration for acquisition 10,280 6,205Unpaid consideration for investment 19,257 434Prepayment received for sale of an investee – 12,410Interest payable for convertible debt and

unsecured senior notes 923 17,063Others 19,200 29,040

$ 556,753 $ 732,519


– IB-50 –



(1) For the year ended December 31, 2020 and nine months ended September 30, 2021, the Grouprecognized $1.5 million and nil of impairment charges on investment prepayment (all fully impaired),respectively, due to the deterioration of investees’ operations resulting in their inability to refund theprepayments.

(2) Loans to related parties and third parties incurred for the nine months ended September 30, 2021 werenon-trade in nature.

(3) Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “redenvelopes” and coupons to users and purchase different types of products and services on Weibo,including those offered by the Group, such as marketing services and VIP membership, and thoseoffered by Weibo’s platform partners, such as e-commerce merchandises, financial products and virtualgifts. Amounts deposited by users primarily represent the receivable temporarily held in Weibo’saccount on a third party online payment platform for Weibo wallet users. Amounts due to users representthe balances that are payable on demand to Weibo wallet users and therefore are reflected as currentliability on the unaudited interim condensed consolidated balance sheets.

(4) As of September 30, 2021, investment related deposits primarily included $76.8 million in a micro loancompany, $79.1 million in an insurance company and $223.9 million in a game company. Thesenon-current assets will be transferred to long-term investment when the legal procedures are completed.

(5) Weibo entered into a letter of intent to purchase the office building (SINA Plaza) from SINA. As ofSeptember 30, 2021, the balance of prepayment for SINA Plaza was $131.9 million.

(6) Include amounts due to third parties, employees, related parties (Note 10) and Weibo wallet users.

9. Income Taxes

The Company is registered in the Cayman Islands and mainly operates in two taxablejurisdictions–the PRC and Hong Kong.

The Group’s income before income taxes is as follows:


2020 2021

(In thousands, exceptpercentage)

Income before income tax expenses $370,109 $ 405,011Less: Income (Loss) from non-China operations 64,479 (198,398)

Income from China operations $305,630 $ 603,409


– IB-51 –




2020 2021

(In thousands, exceptpercentage)

Income tax expenses (benefits) applicable tonon-China operations $12,358 $ (9,757)

Income tax expenses applicable to Chinaoperations 74,272 103,017

Total income tax expenses $86,630 $ 93,260

Effective tax rate for China operations 24.3% 17.1%

The Company generated the majority of its operating income from PRC operations andhas recorded income tax provision for the periods presented. The Group’s income (loss)from non-China operations mainly included stock-based compensation, fair value changesthrough earnings on investments and investment related impairment recorded by theGroup’s non-China subsidiaries. The Group’s non-China operations have recognized$12.4 million deferred tax charges from fair value change of investments during the ninemonths ended September 30, 2020, as well as a $9.8 million reversal of previouslyrecognized deferred tax charges during the nine months ended September 30, 2021.

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to tax onincome or capital gain. In addition, upon payments of dividends by the Company to itsshareholders, no Cayman Islands withholding tax is required.

Hong Kong

Weibo HK is subject to 16.5% Hong Kong profit tax on its taxable income generated fromoperations in Hong Kong. Commencing from the year of assessment 2018/2019, the firstHK$2 million of profits earned by entities incorporated in Hong Kong will be taxed athalf the current tax rate (i.e., 8.25%) while the remaining profits will continue to be taxedat the existing 16.5% tax rate.

China

Effective January 1, 2008, the Enterprise Income Tax Law (the “EIT Law”) in Chinaunifies the enterprise income tax rate for the entities incorporated in China at 25%, unlessthey are eligible for preferential tax treatment. Preferential tax treatments will be grantedto companies conducting businesses in certain encouraged sectors and to entities qualified


– IB-52 –



China (continued)

as “software enterprise”, “key software enterprise” (“KSE”) and/or “high and newtechnology enterprise” (“HNTE”). Weibo Technology, the Group’s WFOE, was qualifiedas a “software enterprise” in 2020, it will not enjoy a reduced tax rate for its “softwareenterprise” status as it has been five years since its first profitable year of 2015 and it hasalready benefited from the preferential tax treatment of “software enterprise” status from2015 to 2019. Weibo Technology was also granted the HNTE status for the fiscal yearsfrom 2017 to 2022, which entitled the qualified entity a preferential tax rate of 15% in2020 and 2021. Its qualification as a HNTE is subject to annual evaluation and athree-year review by the relevant authorities in China. In addition, certain of the Group’sother PRC entities are also qualified as a “software enterprise”, and/or HNTE, andcurrently enjoy the respective preferential tax treatments.

The EIT Law also provides that an enterprise established under the laws of a foreigncountry or region but whose “de facto management body” is located in the PRC be treatedas a resident enterprise for PRC tax purposes and consequently be subject to the PRCincome tax at the rate of 25% for its global income. The Implementing Rules of the EITLaw merely define the location of the “de facto management body” as “the place wherethe exercising, in substance, of the overall management and control of the production andbusiness operation, personnel, accounting, properties, etc., of a non-PRC company islocated.” Based on a review of surrounding facts and circumstances, the Group does notbelieve that it is likely that its operations outside of the PRC be considered a residententerprise for PRC tax purposes. However, due to limited guidance and implementationhistory of the EIT Law, should Weibo be treated as a resident enterprise for PRC taxpurposes, the Company will be subject to PRC tax on worldwide income at a uniform taxrate of 25% retroactive to January 1, 2008.

The EIT Law also imposes a withholding income tax rate of 10% on dividends distributedby a WFOE to its immediate holding company outside of China, if such immediateholding company is considered as a non-resident enterprise without any establishment orplace within China or if the received dividends have no connection with the establishmentor place of such immediate holding company within China, unless such immediateholding company’s jurisdiction of incorporation has a tax treaty with China that providesfor a different withholding arrangement. The Cayman Islands, where the Companyincorporated, does not have such tax treaty with China. According to the arrangementbetween Mainland China and Hong Kong Special Administrative Region on theAvoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006,dividends paid by a WFOE in China to its immediate holding company in Hong Kong willbe subject to withholding tax at a rate of no more than 5% (if the foreign investor ownsdirectly at least 25% of the shares of the WFOE). The State Administration of Taxationfurther promulgated Circular 601 on October 27, 2009, which provides that tax treatybenefits will be denied to “conduit” or shell companies without business substance andthat a beneficial ownership analysis will be used based on a “substance-over-form”principle to determine whether or not to grant the tax treaty benefits.


– IB-53 –



China (continued)

The operations of the Group’s WFOE in China are invested and held by Weibo HK. If theCompany is regarded as a non-resident enterprise and Weibo HK is regarded as a residententerprise, then Weibo HK may be required to pay a 10% withholding tax on anydividends payable to the Company. If Weibo HK is regarded as a non-resident enterprise,then Weibo Technology may be required to pay a 5% withholding tax for any dividendspayable to Weibo HK. However, it is still unclear at this stage whether Circular 601applies to dividends from Weibo Technology paid to Weibo HK. If Weibo HK were notconsidered as “beneficial owners” of any dividends from Weibo Technology, thedividends payable to Weibo HK would be subject to a withholding tax of 10%. Thecurrent policy approved by the Company’s board of directors allows the Group todistribute PRC earnings offshore only if the Group does not have to pay a dividend tax.As of September 30, 2021, the Group did not record any withholding tax for its PRCsubsidiaries.

According to the relevant laws and regulations in the PRC, enterprises engaging inresearch and development activities were entitled to claim 150% of their research anddevelopment expenses incurred as tax deductible expenses when determining theirassessable profits for that year (the “R&D Deduction”). The State TaxationAdministration of the PRC announced in September 2018 that enterprises engaging inresearch and development activities would be entitled to claim 175% of their research anddevelopment expenses as R&D Deduction from January 1, 2018 to December 31, 2020.


– IB-54 –



Composition of income tax expenses

The following table sets forth current and deferred portion of income tax expenses of theGroup:


2020 2021

(In thousands)

Deferred tax provisions (benefits) $11,682 $ (11,546)Current income tax expenses 74,948 104,806

Income tax expenses $86,630 $ 93,260

Deferred tax assets and liabilities

The following table sets forth the significant components of deferred tax assets andliabilities for the Group:

As of

December 31,2020

September 30,2021

(In thousands)

Deferred tax assets:Net operating loss carry forwards $ 8,872 $ 8,991Valuation allowance (8,872) (8,991)Depreciation, investment-related impairment,

accounts receivable, accrued and otherliabilities 107,892 109,338

Valuation allowance (80,872) (82,013)

Net deferred tax assets (included in other non-current assets) $ 27,020 $ 27,325

Deferred tax liabilities:Acquired intangible assets $ 30,999 $ 36,768Depreciation 1,435 1,454Investment gain 25,496 15,857Others 369 374

Total deferred tax liabilities $ 58,299 $ 54,453


– IB-55 –



Deferred tax assets and liabilities (continued)

Valuation allowance is provided against deferred tax assets when the Group determinesthat it is more likely than not that the deferred tax assets will not be utilized in the future.In making such determination, the Group considered factors including (i) future reversalsof existing taxable temporary differences; (ii) future taxable income exclusive ofreversing temporary differences and carry forwards; and (iii) tax planning strategies. Thevaluation allowance on deferred tax assets as of December 31, 2020 and September 30,2021 was $89.7 million and $91.0 million, respectively. The valuation allowanceprimarily consists of bad debt expenses and investment impairment charges/fair valuechange of investments. Historically, deferred tax assets were valued using the statutoryrate of 25% for China operations. Net operating loss carry forwards for China operationsas of December 31, 2020 will expire, if unused, in the years ending December 31, 2021through December 31, 2025.

Uncertain tax position

Except for the lag recognition of preferential tax treatment of KSE status, research anddevelopment super deduction and stock based related deduction, the Group did not recordany liability or decrease in deferred tax asset related to uncertain tax positions as ofDecember 31, 2020 and September 30, 2021, and thus, no interest and penalties relatedto uncertain tax positions were recorded.

For the nine months ended September 30, 2021, based on interactions with the taxauthorities, the Group received additional guidance regarding certain areas withheightened requirements, and updated its estimate of related tax benefit amount that isexpected to be sustained upon settlement with tax authorities. Additional $27.9 milliontax liability related to uncertain tax positions was recognized for the nine months endedSeptember 30, 2021, which is based on the updated estimate of the largest amount of taxbenefit that is greater than 50% likely to be realized upon settlement with the taxauthorities. It is possible that the estimate and ultimate resolution of these uncertain taxpositions may further change based on further interactions with the tax authorities.

In general, the PRC tax authorities have up to five years to review a company’s tax filings.Accordingly, tax filings of the Company’s PRC subsidiaries and VIEs for tax years 2016through 2020 remain subject to the review by the relevant PRC tax authorities.


– IB-56 –


10. Related Party Transactions

The following sets forth significant related parties and their relationships with theCompany:

Company Name Relationship with the Company

SINA Parent and affiliates under common control.

Alibaba Strategic partner and significant shareholder of the Company.

During the nine months ended September 30, 2020 and 2021, the Group entered in to aseries of one-year loan agreements with SINA pursuant to which SINA is entitled toborrow from the Group to facilitate SINA’s business operations. SINA has withdrawn atotal of $443.6 million and $481.2 million from the Group and repaid $146.7 million and$547.7 million to the Group during the nine months ended September 30, 2020 and 2021,respectively. As of December 31, 2020 and September 30, 2021, the loans to and interestreceivable from SINA were $547.9 million and $487.9 million, respectively.

The following sets forth significant related party transactions with the Group:


2020 2021

(In thousands)

Transactions with SINARevenue billed through SINA $29,233 $46,374Revenue from services provided to SINA 15,541 21,199

Total $44,774 $67,573

Costs and expenses allocated from SINA(1) $29,126 $28,796Interest income on loans to SINA $ 8,647 $13,985

Transactions with AlibabaAdvertising and marketing revenues from Alibaba

– as an advertiser $92,468 $94,068Advertising and marketing revenues from Alibaba

– as an agent $20,438 $40,824Services provided by Alibaba $39,634 $33,462

(1) Costs and expenses allocated from SINA represented the charges for certain services provided bySINA’s affiliates and charged to the Group using actual cost allocation based on proportional utilization(Note 1). In addition to the allocated costs and expenses, SINA also billed $32.9 million and $35.5million for other costs and expenses incurred by Weibo but paid by SINA for the nine months endedSeptember 30, 2020 and 2021, respectively. During the nine months ended September 30, 2020 and2021, Weibo allocated $5.7 million and $2.2 million to SINA for costs and expenses related to certainof SINA’s activities for which Weibo made the payments, respectively.


– IB-57 –





2020 2021

(In thousands)

Transactions with SINAAdvertising and marketing revenues $34,149 $58,178Value-added services revenues 10,625 9,395

Total $44,774 $67,573

The following sets forth related party outstanding balance:

As of

December 31,2020

September 30,2021

(In thousands)

Amount due from SINA(2) $548,900 $515,534Accounts receivable due from Alibaba $135,321 $ 98,262

Loans to and interest receivable(3)(4)

– Company A (an investee in e-commercebusiness) $ 79,762 $ –

– Company B (an investee providing social andnew media marketing services) 21,771 15,082

– Company C (an investee providing onlinebrokerage services) 41,205 231,304

– Others 15,884 37,518

Total $158,622 $283,904

(2) The Group uses amount due from/to SINA to settle balances arising from cost and expenses allocatedfrom SINA based on proportional utilization, other expenditures incurred by Weibo business but paid bySINA, transactions with third-party customers and suppliers settled through SINA, as well as businesstransactions between Weibo and SINA. As of December 31, 2020 and September 30, 2021, the amountdue from SINA also included loans to and interest receivable from SINA of $547.9 million and $487.9million at an annual interest rate ranging from 1.0% to 4.5% of maturity within one year, respectively.

(3) The annual interest rates of the loans were ranging from 3.5% to 10.0% (interest free for Company B)and the maturities of all loans were within one year at both dates.

(4) The Group assessed the collectability of outstanding loans at least on annual basis or wheneverimpairment indicators noted. For the nine months ended September 30, 2020 and 2021, the Grouprecognized $50.2 million and nil impairment charges on loans to and interest receivable from otherrelated parties, respectively.


– IB-58 –



Other related parties mainly include investee companies on which SINA or Weibo hassignificant influence. These investees are generally high-tech companies operating indifferent internet-related business. For the nine months ended September 30, 2020 and2021, advertising and marketing revenues generated from other related parties were $33.4million and $38.7 million, value-added services revenues generated from other relatedparties were $1.8 million and $1.7 million, and cost and expenses were $30.1 million and$29.1 million respectively. As of December 31, 2020 and September 30, 2021, otherrelated parties accounted for outstanding balances of net accounts receivable of $42.5million and $41.2 million, accounts payable of $30.8 million and $19.7 million, andaccrued and other liabilities of $4.8million and $6.3 million, respectively.

11. Employee Benefit Plans

China Contribution Plan

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries in China participate in agovernment-mandated, multi-employer, defined contribution plan, pursuant to whichcertain retirement, medical, housing and other welfare benefits are provided toemployees. Chinese labor laws require the entities incorporated in China to pay to thelocal labor and welfare authorities a monthly contribution at a stated contribution ratebased on the monthly basic compensation of qualified employees. The local labor bureauis responsible for meeting all retirement benefit obligations. The Group has no furthercommitments beyond its monthly contribution. For the nine months ended September 30,2020 and 2021, the Group’s total contribution was $34.3 million and $58.4 million,respectively.

12. Net Income per Share

Basic net income per share is computed using the weighted average number of theordinary shares outstanding during the period. Options and RSUs are not consideredoutstanding in the computation of basic earnings per share (“EPS”). Diluted EPS iscomputed using the weighted average number of ordinary shares and potential ordinaryshares outstanding during the period under the treasury stock method. For the nine monthsended September 30, 2020 and 2021, options to purchase ordinary shares and RSUs of 0.6million and 1.6 million were recognized as dilutive factors and included in the calculationof diluted net income per share, respectively. For the nine months ended September 30,2020 and 2021, options and RSUs which were anti-dilutive and excluded from thecalculation of diluted net income per share were 1.0 million and 0.1 million, respectively.For the nine months ended September 30, 2020 and 2021, 6.8 million shares convertiblefrom the convertible debt were anti-dilutive and excluded from the calculation of dilutednet income per share for both of the periods.


– IB-59 –



The following table sets forth the computation of basic and diluted net income per sharefor the periods presented:


2020 2021

(In thousands, except per sharedata)

Basic net income per share calculation:Numerator:

Net income attributable to Weibo’sshareholders $284,322 $312,586

Denominator:Weighted average ordinary shares outstanding 226,728 228,185

Basic net income per share attributable to Weibo’sshareholders $ 1.25 $ 1.37

Diluted net income per share calculation:Numerator:

Net income attributable to Weibo’sshareholders for calculating diluted netincome per share $284,322 $312,586

Denominator:Weighted average ordinary shares outstanding 226,728 228,185Effects of dilutive securities

Stock options 73 85Unvested restricted share units 551 1,495

Shares used in computing diluted net incomeper share attributable to Weibo’s shareholders 227,352 229,765

Diluted net income per share attributable toWeibo’s shareholders $ 1.25 $ 1.36


– IB-60 –


13. Segment Information

The Group currently operates and manages its business in two principal businesssegments globally–advertising and marketing services and value-added services.Information regarding the business segments provided to the Group’s chief operatingdecision makers (“CODM”), its Chief Executive Officer, is at the revenue level and theGroup currently does not allocate operating costs and expenses or assets to its segments,as its CODM does not use such information to allocate resources or evaluate theperformance of the operating segments. As substantially all of the Group’s revenues arederived from the PRC and substantially all of the Group’s long-lived assets are locatedwithin the PRC, no geographical information is presented.

The following is a summary of the Group’s revenues:

Revenues

Advertising&


services Total

(In thousands)

Nine months ended September 30, 2020 $1,032,678 $143,843 $1,176,521

Nine months ended September 30, 2021 $1,429,969 $210,827 $1,640,796

14. Profit Appropriation and Restricted Net Assets

The Company’s subsidiaries, VIEs and VIEs’ subsidiaries in China are required to makeappropriations to certain non-distributable reserve funds. In accordance with the lawsapplicable to WFOEs in China, its subsidiaries have to make appropriations from theirafter-tax profit (as determined under Generally Accepted Accounting Principles in thePRC (“PRC GAAP”)) to non-distributable reserve funds including (i) general reservefund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. General reservefund is at least 10% of the after-tax profits calculated in accordance with the PRC GAAP.Appropriation is not required if the reserve fund has reached 50% of the registered capitalof the respective company. The appropriation of the other two reserve funds is at theGroup’s discretion. At the same time, the Company’s VIEs, in accordance with the ChinaCompany Laws, must make appropriations from their after-tax profit (as determinedunder the PRC GAAP) to non-distributable reserve funds including (i) statutory surplusfund, and (ii) discretionary surplus fund. Statutory surplus fund is at least 10% of theafter-tax profits calculated in accordance with the PRC GAAP. Appropriation is notrequired if the reserve fund has reached 50% of the registered capital of the respectivecompany.

General reserve fund and statutory surplus fund are restricted for set off against losses,expansion of production and operation or increase in registered capital of the respectivecompanies. These reserves are not transferable to the Company in the form of cashdividends, loans or advances. These reserves are therefore not available for distributionexcept in liquidation.


– IB-61 –


14. Profit Appropriation and Restricted Net Assets (continued)

As of December 31, 2020 and September 30, 2021 the Group’s PRC subsidiaries accruedapproximately $127.2 million and $127.0 million in the general reserve/statutory surplusfunds, respectively.

Under the PRC laws and regulations, the subsidiaries, VIEs and VIEs’ subsidiariesincorporated in the PRC are restricted in their ability to transfer a portion of their netassets to the Group either in the form of dividends, loans or advances of the consolidatednet assets. Even though the Group currently does not require any such dividends, loansor advances from the PRC subsidiaries, VIEs and VIEs’ subsidiaries for working capitaland other funding purposes, the Group may in the future require additional cash resourcesfrom the PRC subsidiaries, VIEs and VIEs’ subsidiaries due to changes in businessconditions, to fund future acquisitions and development, or merely declare and paydividends to or distribution to its shareholders. Net assets subject to restriction for theGroup amounted to $449.9 million, or 13.5% of the Group’s total consolidated net assetsas of September 30, 2021.

15. Fair Value Measurement

The following table summarizes, for assets measured at fair value on a recurring basis, therespective fair value and the classification by level of input within the fair value hierarchyas of December 31, 2020 and September 30, 2021:


Total




(Level 2)


Inputs (Level 3)

(In thousands)

As of December 31, 2020:Bank time deposits* $1,515,880 $ – $1,515,880 $–Wealth management products* 166,168 – 166,168 –Equity securities with readily

determinable market value ** 289,221 289,221 – –

Total $1,971,269 $289,221 $1,682,048 $–

As of September 30, 2021:Bank time deposits* $ 665,983 $ – $ 665,983 $–Wealth management products* 212,504 – 212,504 –Equity securities with readily

determinable market value ** 420,012 420,012 – –

Total $1,298,499 $420,012 $ 878,487 $–


– IB-62 –



* Included in short-term investments on the Group’s unaudited interim condensed consolidated balancesheets.

** Included in long-term investments on the Group’s unaudited interim condensed consolidated balancesheets.

Recurring

The Group measures short-term investments and equity securities with readilydeterminable fair values on a recurring basis. The fair value of the Group’s equitysecurities with readily determinable fair values are determined based on the quotedmarket price (Level 1). The fair value of the Group’s short-term investments aredetermined based on the quoted market price for similar products (Level 2).

Non-recurring

For those equity investments without readily determinable fair value, the Group measuresthem at market value when observable price changes are identified or impairment chargesare recognized. The market values of the Group’s privately held investments as disclosedare determined based on the discounted cash flow model using the discount curve ofmarket interest rates or based on the similar transaction price in the market directly. TheGroup classifies the valuation techniques on those investments that use similaridentifiable transaction prices as Level 2 of fair value measurements.

The Group measures equity method investments at fair value on a non-recurring basisonly if an impairment charge is recognized. Certain privately held investments weremeasured using significant unobservable inputs (Level 3) and written down from theirrespective carrying values to fair values, considering the investees’ financialperformance, assumptions about future growth, and future financing plan, withimpairment charges incurred and recorded in earnings for the period then ended. For thenine months ended September 30, 2020 and 2021, $64.7 million and $102.6 millionimpairment charges were recorded for those equity investments without readilydeterminable fair values.

The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets andoperating lease assets, are measured at fair value only if they were determined to beimpaired. In accordance with the Group’s policy to perform an impairment assessment ofits goodwill on an annual basis as of the balance sheet date or when facts andcircumstances warrant a review, the Group performed an impairment assessment on itsgoodwill by reporting unit annually. The Group recognized no impairment charge ofgoodwill arising from previous acquisitions for the nine months ended September 30,2020 and 2021, respectively.


– IB-63 –



Non-recurring (continued)

The carrying amount of cash and cash equivalents, short-term investments, accountsreceivable due from third parties, accounts receivable due from Alibaba, accountsreceivable due from other related parties, amount due from SINA, accounts payable,accrued and other liabilities approximates fair value because of their short-term nature.

16. Convertible Debt and Unsecured Senior Notes

In October 2017, the Company issued $900 million in aggregate principal amount of1.25% coupon interest convertible senior notes due on November 15, 2022 (“2022Notes”) at par. The Notes may be converted into Weibo’s American depositary shares(“ADSs”), each representing one Class A ordinary share of the Company, at the option ofthe holders, which is equivalent to an initial conversion price of approximately $133.27per ADS, subject to adjustment. The conversion rate may be adjusted under certaincircumstances, such as distribution of dividends and stock splits. In addition, upon amake-whole fundamental change prior to the maturity date of the notes, the Companywill, under certain circumstances, increase the applicable conversion rate for a holder thatelects to convert his/her notes in connection with such make-whole fundamental change.

The net proceeds received by the Company from the issuance of the 2022 Notes were$879.3 million, net of issuance cost of $20.7 million. The Company pays cash interest atan annual rate of 1.25%, payable semiannually in arrears on May 15 and November 15of each year, beginning May 15, 2018. The issuance costs of the 2022 Notes are beingamortized to interest expenses over the contractual life. The 2022 Notes related interestexpenses were $11.5 million for both of the nine months ended September 30, 2020 and2021.

In July 2019, the Company issued $800 million in aggregate principal amount ofunsecured senior notes due on July 5, 2024 (“2024 Notes”), unless previously repurchasedor redeemed in accordance with the terms prior to maturity. The 2024 Notes were issuedat par value and bear an annual interest rate of 3.50%, payable semiannually in arrears onJanuary 5 and July 5 of each year, beginning on January 5, 2020. The net proceeds to theCompany from the issuance of the 2024 Notes were $793.3 million, net of issuance costof $6.7 million. The issuance costs of the 2024 Notes are being amortized to interestexpenses over the contractual life. The 2024 Notes related interest expenses were $22.0million for both of the nine months ended September 30, 2020 and 2021.

In July 2020, the Company issued $750 million in aggregate principal amount ofunsecured senior notes due on July 8, 2030 (“2030 Notes”), unless previously repurchasedor redeemed in accordance with the terms prior to maturity. The 2030 Notes bear anannual interest rate of 3.375%, payable semiannually in arrears on January 8 and July 8of each year, beginning on January 8, 2021. The net proceeds to the Company from theissuance of the 2030 Notes were $740.3 million, net of issuance cost of $9.7 million. Theissuance costs of the 2030 Notes are being amortized to interest expenses over thecontractual life. For the nine months ended September 30, 2020 and 2021, the Grouprecognized $6.1 million and $19.7 million interest expenses from the 2030 Notes.


– IB-64 –


17. Commitments and Contingencies

Operating lease commitments include the commitments under the lease agreements forthe Group’s office premises. The Group leases its office facilities under non-cancelableoperating leases with various expiration dates. For the nine months ended September 30,2020 and 2021, the Group recorded $9.2 million and $12.2 million lease expense,respectively. Based on the current rental lease agreements, future minimum leasepayments commitments as of September 30, 2021 were as follows:

Operating leasecommitments Total

Less thanOne Year

One toThreeYears

Three toFive Years

More thanFive Years

(In thousands)

As of September 30,2021 $11,391 $5,001 $3,596 $2,661 $133

Purchase commitments mainly include minimum commitments for marketing activitiesand internet connection. Purchase commitments as of September 30, 2021 were asfollows:

Purchasecommitments Total

Less thanOne Year

One toThreeYears

Three toFive Years

More thanFive Years

(In thousands)

As of September 30,2021 $620,620 $588,994 $29,613 $2,006 $7

2022 Notes represent the future maximum commitments relating to the principal amountand interests in connection with the issuance of $900 million in aggregate principalamount of 1.25% coupon interest convertible senior notes, which will mature onNovember 15, 2022. 2024 Notes represent future maximum commitment relating to theprincipal amount and interests in connection with the issuance of $800 million inaggregate principal amount of unsecured senior notes bearing an annual interest rate of3.50%, which will mature on July 5, 2024. 2030 Notes represent future maximumcommitment relating to the principal amount and interests in connection with the issuanceof $750 million in aggregate principal amount of unsecured senior notes bearing anannual interest rate of 3.375%, which will mature on July 8, 2030.

Other commitments TotalLess thanOne Year

One toThreeYears

Three toFive Years

More thanFive Years

(In thousands)

2022 Notes $ 916,867 $11,250 $ 905,617 $ – $ –2024 Notes 884,000 28,000 856,000 – –2030 Notes 977,812 25,312 50,625 50,625 851,250

Total $2,778,679 $64,562 $1,812,242 $50,625 $851,250


– IB-65 –


17. Commitments and Contingencies (continued)

There are uncertainties regarding the legal basis of the Group’s ability to operate anInternet business in China. Although China has implemented a wide range of market-oriented economic reforms, the telecommunication, information and media industriesremain highly regulated. Not only are such restrictions currently in place, the existingregulations are unclear as to which specific segments of these industries companies withforeign investors, including the Company, may operate. Therefore, the Group may berequired to limit the scope of its operations in China, and this could have a materialadverse effect on its financial position, results of operations and cash flows.

There are no claims, lawsuits, investigations or proceedings, including unasserted claimsthat are probable to be assessed, that have in the recent past had, or to the Group’sknowledge, are reasonably possible to have, a material impact on the Group’s financialstatements.

18. Redeemable Non-controlling Interests

In the fourth quarter of 2020, the Group entered into a series of share purchaseagreements with then existing shareholders of Shanghai Jiamian Information TechnologyCo., Ltd. (“JM Tech”) to acquire the majority of the company’s equity interest. The Groupagreed to redeem the non-controlling interests held by founders and CEO of the companyunder certain circumstances during the following years subsequent to the acquisition. TheGroup determined that the non-controlling interest with redemption rights should beclassified as redeemable non-controlling interest since they are contingently redeemableupon the occurrence of certain conditional events, which are not solely within the controlof the Group.

The redeemable non-controlling interests is recognized at fair value on the acquisitiondate. The Group records accretion on the redeemable non-controlling interest to theredemption value over the period from the date of the acquisition to the date of earliestredemption. The accretion using the effective interest method, is recorded as deemeddividends to preferred shareholders, which reduce retained earnings and equity classifiednon-controlling interests, and earnings available to common shareholders in calculatingbasic and diluted earnings per share.

The process of adjusting redeemable non-controlling interests to its redemption value (the“Mezzanine Adjustment”) should be performed after attribution of the subsidiary’s netincome or loss pursuant to ASC 810, Consolidation. The carrying amount of redeemablenon-controlling interests will equal the higher of the amount resulting from application ofASC 810 or the amount resulting from the Mezzanine Adjustment. As the expectedredemption value is less than the carrying value of redeemable non-controlling interests,there is nil mezzanine adjustment recognized for the nine months ended September 30,2021.


– IB-66 –


18. Redeemable Non-controlling Interests (continued)

Pursuant to the agreements between the Group and the founders who are also employeesof JM Tech, the founders are required to be in employment during the following two yearstill December 31, 2022 to be entitled to their proportionate share in JM Tech’s existingand future retained earnings during the period. Such entitlement will automatically beforfeited upon the termination of their employment during the period. The Companyconsidered this arrangement as certain economic interests associated with the founders’non-controlling interest in JM Tech till December 31, 2022. Therefore, the Companyrecognized compensation costs for the founders’ share of JM Tech’s retained earningswith the credit increasing non-controlling interest and redeemable non-controllinginterest. During the nine months ended September 30, 2021, $18.4 million compensationcosts were recognized, of which $15.6 million was recorded to increase redeemablenon-controlling interest.

19. Subsequent events

From September 30, 2021 to the date of publication of this report, there was nosubsequent event which had a material impact on the Group.


– IB-67 –

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLEASSETS

The following unaudited pro forma adjusted net tangible assets prepared in accordancewith Rule 4.29 of the Listing Rules are set out below for the purpose of illustrating theeffect of the Global Offering on the audited consolidated net tangible assets attributableto shareholders of the Company as at June 30, 2021 as if the Global Offering had takenplace on that date.

The unaudited pro forma adjusted net tangible assets has been prepared for illustrativepurposes only and because of its hypothetical nature, it may not give a true picture of theconsolidated net tangible assets attributable to shareholders of the Company as at June 30,2021 or at any future dates following the completion of the Global Offering. Theunaudited pro forma adjusted net tangible assets is based on the audited consolidated nettangible assets attributable to the shareholders of the Company as at June 30, 2021, asshown in the Accountant’s Report of the Group, the text of which is set out in AppendixIA to this document, and adjusted as described below.

Auditedconsolidatednet tangible

assetsattributable toshareholders ofthe Companyas at June 30,

2021(1)

Estimatednet proceeds

from theGlobal

Offering(2)

Unaudited proforma adjusted

net tangibleassets

attributable toshareholders ofthe Company

Unauditedpro forma


assets perShare

Unauditedpro forma


assets perADS

Unauditedpro forma


assets perShare

Unauditedpro forma


assets perADS

USD’000 USD’000 USD’000 USD(3) USD(4) HK$(5) HK$(5)

Based on an OfferPrice ofHK$388.00 perShare � � � � � � 2,788,516 257,239 3,045,755 13.03 13.03 101.51 101.51

Notes:

(1) The audited consolidated net tangible assets attributable to shareholders of the Company as at June 30,2021 is calculated based on the audited consolidated net assets attributable to shareholders of theCompany as at June 30, 2021 of US$3,010,038,000 as set out in Appendix IA, with adjustments forgoodwill attributable to shareholders of the Company as at June 30, 2021 of US$98,008,000 (excludesnon-controlling interests of US$15,596,000) and net intangible assets attributable to shareholders of theCompany as at June 30, 2021 of US$123,514,000 (excludes non-controlling interests ofUS$33,663,000).

(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$388.00 perShare, after deduction of the underwriting fees and other related expenses payable by the Group, butdoes not take into account 11,674,008 Class A ordinary shares issued and reserved for future issuanceupon the exercising or vesting of awards granted under the Share Incentive Plans, any conversion ofClass B ordinary shares into Class A ordinary shares upon exercise of the Over-allotment Option, andany issuance or repurchase of Shares and/or ADSs by the Company.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

– II-1 –

(3) The unaudited pro forma adjusted net tangible assets per Share is arrived at after the adjustmentsreferred to in the preceding paragraphs and on the basis that 233,781,368 Shares were in issue assumingthat the Global Offering had been completed on June 30, 2021 but does not take into account 11,674,008Class A ordinary shares issued and reserved for future issuance upon the exercising or vesting of awardsgranted under the Share Incentive Plans, any conversion of Class B ordinary shares into Class A ordinaryshares upon exercise of the Over-allotment Option, and any issuance or repurchase of Shares and/orADSs by the Company.

(4) The unaudited pro forma adjusted net tangible assets per ADS is arrived at after the adjustments referredto in the preceding paragraphs and on the basis that one ADS represent one Share.

(5) For the purpose of this unaudited pro forma adjusted net tangible assets, the amounts stated in USD areconverted into Hong Kong dollars at a rate of USD1.00 to HK$7.7915. No representation is made thatUSD amounts have been, could have been or may be converted to Hong Kong dollars, or vice versa, atthat rate.

(6) No adjustment has been made to reflect any trading result or other transactions of the Group entered intosubsequent to June 30, 2021.


– II-2 –

B. REPORT FROM THE REPORTING ACCOUNTANT ON UNAUDITED PROFORMA FINANCIAL INFORMATION

The following is the text of a report received from PricewaterhouseCoopers, CertifiedPublic Accountants, Hong Kong, for the purpose of incorporation in this document.

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THECOMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

To the Directors of Weibo Corporation

We have completed our assurance engagement to report on the compilation of unaudited proforma financial information of Weibo Corporation (the “Company”) and its subsidiaries(collectively the “Group”) by the directors of the Company (the “Directors”) for illustrativepurposes only. The unaudited pro forma financial information consists of the unaudited proforma statement of adjusted consolidated net tangible assets of the Group as at June 30, 2021,and related notes (the “Unaudited Pro Forma Financial Information”) as set out on pages II-1to II-2 of the Company’s prospectus dated November 29, 2021, in connection with the proposedglobal offering of the shares of the Company (the “Prospectus”). The applicable criteria on thebasis of which the Directors have compiled the Unaudited Pro Forma Financial Information aredescribed on pages II-1 to II-2 of the Prospectus.

The Unaudited Pro Forma Financial Information has been compiled by the Directors toillustrate the impact of the proposed global offering on the Group’s financial position as at June30, 2021 as if the proposed global offering had taken place at June 30, 2021. As part of thisprocess, information about the Group’s financial position has been extracted by the Directorsfrom the Group’s financial information for the period ended June 30, 2021, on which anaccountant’s report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information inaccordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited (the “Listing Rules”) and with reference to AccountingGuideline 7, Preparation of Pro Forma Financial Information for Inclusion in InvestmentCirculars (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants(“HKICPA”).

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethicsfor Professional Accountants issued by the HKICPA, which is founded on fundamentalprinciples of integrity, objectivity, professional competence and due care, confidentiality andprofessional behaviour.


– II-3 –

Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA andaccordingly maintains a comprehensive system of quality control including documentedpolicies and procedures regarding compliance with ethical requirements, professionalstandards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the ListingRules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. Wedo not accept any responsibility for any reports previously given by us on any financialinformation used in the compilation of the Unaudited Pro Forma Financial Information beyondthat owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on AssuranceEngagements 3420, Assurance Engagements to Report on the Compilation of Pro FormaFinancial Information Included in a Prospectus, issued by the HKICPA. This standard requiresthat the reporting accountant plans and performs procedures to obtain reasonable assuranceabout whether the Directors have compiled the Unaudited Pro Forma Financial Information inaccordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by theHKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reportsor opinions on any historical financial information used in compiling the Unaudited Pro FormaFinancial Information, nor have we, in the course of this engagement, performed an audit orreview of the financial information used in compiling the Unaudited Pro Forma FinancialInformation.

The purpose of unaudited pro forma financial information included in a prospectus is solely toillustrate the impact of a significant event or transaction on unadjusted financial informationof the entity as if the event had occurred or the transaction had been undertaken at an earlierdate selected for purposes of the illustration. Accordingly, we do not provide any assurance thatthe actual outcome of the proposed global offering at June 30, 2021 would have been aspresented.

A reasonable assurance engagement to report on whether the unaudited pro forma financialinformation has been properly compiled on the basis of the applicable criteria involvesperforming procedures to assess whether the applicable criteria used by the directors in thecompilation of the unaudited pro forma financial information provide a reasonable basis forpresenting the significant effects directly attributable to the event or transaction, and to obtainsufficient appropriate evidence about whether:

• The related pro forma adjustments give appropriate effect to those criteria; and

• The unaudited pro forma financial information reflects the proper application of thoseadjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgment, having regard to thereporting accountant’s understanding of the nature of the company, the event or transaction inrespect of which the unaudited pro forma financial information has been compiled, and otherrelevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro formafinancial information.


– II-4 –

We believe that the evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Our work has not been carried out in accordance with auditing standards or other standards andpractices generally accepted in the United States of America or auditing standards of the PublicCompany Accounting Oversight Board (United States) or standards and practices of anyprofessional body in any other overseas jurisdiction and accordingly should not be relied uponas if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by theDirectors on the basis stated;

(b) such basis is consistent with the accounting policies of the Group; and

(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma FinancialInformation as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

PricewaterhouseCoopersCertified Public AccountantsHong Kong, November 29, 2021


– II-5 –

SUMMARY OF THE CONSTITUTION OF OUR COMPANY

Notwithstanding the current provisions of the Articles, the Company undertakes to put forthcertain resolutions at the next general meeting to revise the Articles to comply with theapplicable articles requirements under Chapter 19C of the Hong Kong Listing Rules that arenot currently met by the Articles. For further details, please see “Waivers and Exemptions —Shareholder Protection Requirements”.

1 Memorandum of Association

The Memorandum of Association of the Company was conditionally adopted on March 28,2014 and effective on April 17, 2014 and states, inter alia, that the liability of the members ofthe Company is limited, that the objects for which the Company is established are unrestrictedand the Company shall have full power and authority to carry out any object not prohibited bythe Companies Act or any other law of the Cayman Islands.

The Memorandum of Association is available on display at the websites specified in AppendixV in the section headed “Documents available on display”.

2 Articles of Association

The Articles of Association of the Company were conditionally adopted on March 28, 2014 andeffective on April 17, 2014 and include provisions to the following effect:

2.1 Ordinary Class A ordinary shares

The Company’s ordinary shares are divided into Class A ordinary shares and Class B ordinaryshares. Holders of Class A ordinary shares and Class B ordinary shares will have the samerights except for voting and conversion rights. Ordinary shares are issued in registered form.Shareholders who are non-residents of the Cayman Islands may freely hold and vote theirshares.

Each Class B ordinary share is convertible into one Class A ordinary share at any time by theholder thereof. Each Class B ordinary share shall automatically and immediately be convertedinto one Class A ordinary share if at any time SINA Corporation and its Affiliates (as definedin the Articles of Association) in the aggregate hold less than five percent (5%) of the issuedClass B ordinary shares in the capital of the Company, and no Class B ordinary shares shallbe issued by the Company thereafter.

Upon any sale, transfer, assignment or disposition of Class B ordinary shares by a holderthereof to any person or entity who is not an Affiliate (as defined in the Articles of Association)of such holder, such Class B ordinary share shall be automatically and immediately convertedinto an equal number of Class A ordinary shares.

Class A ordinary shares are not convertible into Class B ordinary shares under anycircumstances.

APPENDIX III SUMMARY OF OUR CONSTITUTIONAND CAYMAN COMPANY LAW

– III-1 –

2.2 Dividends

The holders of ordinary shares are entitled to such dividends as may be declared by the Boardof Directors. In addition, shareholders may by ordinary resolution declare a dividend, but nodividend may exceed the amount recommended by the directors. Under Cayman Islands law,dividends may be declared and paid only out of funds legally available therefor, namely out ofeither profit or the Company’s share premium account, and provided further that a dividendmay not be paid if this would result in the Company being unable to pay its debts as they falldue in the ordinary course of business.

Dividends received by each Class B ordinary share and Class A ordinary share in any dividenddistribution shall be the same.

Any dividend unclaimed after a period of six years from the date of declaration of suchdividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to theCompany.

2.3 Voting Rights

Holders of Class A ordinary shares and Class B ordinary shares vote together as a single classon all matters submitted to a vote of the shareholders, except as may otherwise be required bylaw or provided for in the Memorandum and Articles of Association. In respect of mattersrequiring shareholders’ vote, on a show of hands, each shareholder is entitled to one vote foreach ordinary shares registered in his name on the register of members of the Company or, ona poll, each Class A ordinary share is entitled to one vote, and each Class B ordinary share isentitled to three votes. Voting at any shareholders’ meeting is by show of hands unless a pollis demanded. A poll may be demanded by the chairman of such meeting or any shareholderpresent in person or by proxy with a right to attend and vote at such meeting.

An ordinary resolution to be passed by the shareholders requires the affirmative vote of asimple majority of the votes cast by those shareholders entitled to vote who are present inperson or by proxy at a general meeting. Holders of the ordinary shares may, among otherthings, divide or consolidate their shares by ordinary resolution. A special resolution requiresthe affirmative vote of no less than two-thirds of the votes cast by those shareholders entitledto vote who are present in person or by proxy at a general meeting. A special resolution willbe required for important matters such as a change of name or making changes to theMemorandum and Articles of Association. Both ordinary resolutions and special resolutionsmay also be passed by a unanimous written resolution signed by all the shareholders of theCompany, as permitted by the Companies Act and the Memorandum and Articles ofAssociation.

2.4 Transfer of Shares

Subject to applicable securities laws and the Articles, including, without limitation, theprovisions in the case of transfer of Class B ordinary shares as set out in paragraph 2.1 above,any of the shareholders may transfer all or any of his or her ordinary shares by an instrumentof transfer in writing and in the usual or common form or any other form approved by theBoard of Directors.


– III-2 –

However, the Board of Directors may, in its absolute discretion, decline to register any transferof any ordinary share which is not fully paid up or on which the Company has a lien. The Boardof Directors may also decline to register any transfer of any ordinary share unless:

(a) the instrument of transfer is lodged with the Company, accompanied by the certificate forthe ordinary shares to which it relates and such other evidence as the Board of Directorsmay reasonably require to show the right of the transferor to make the transfer;

(b) the instrument of transfer is in respect of only one class of shares;

(c) the instrument of transfer is properly stamped (in circumstances where stamping isrequired);

(d) in the case of a transfer to joint holders, the number of joint holders to which the shareis to be transferred does not exceed four; and

(e) the shares concerned are free of any lien in favour of the Company.

If the directors refuse to register a transfer they are required, within two months after the dateon which the instrument of transfer was lodged with the Company, send to each of thetransferor and the transferee notice of such refusal.

2.5 Liquidation

On a winding up of the Company, if the assets available for distribution among the shareholdersshall be more than sufficient to repay the whole of the capital paid up at the commencementof the winding up, the excess will be distributed amongst the shareholders in proportion to thecapital paid up at the commencement of the winding up on the shares held by themrespectively. If the assets available for distribution are insufficient to repay all of the paid-upcapital, such assets will be distributed so that, as nearly as may be, the losses are borne by theshareholders in proportion to the capital paid up, or which ought to have been paid up, at thecommencement of the winding up on the shares held by them respectively.

2.6 Redemption, Repurchase and Surrender of Shares

The Company may issue shares on terms that such shares are subject to redemption, at theoption of the Company or at the option of the holders thereof, on such terms and in suchmanner as may be determined, before the issue of such shares, by the Board of Directors or bya special resolution of the shareholders. The Company may also repurchase any of theCompany’s shares provided that the manner and terms of such purchase have been approvedby the Board of Directors. Under the Companies Act, the redemption or repurchase of any sharemay be paid out of the Company’s profits or out of the proceeds of a fresh issue of shares madefor the purpose of such redemption or repurchase, or out of capital (including share premiumaccount and capital redemption reserve) if the Company can, immediately following suchpayment, pay its debts as they fall due in the ordinary course of business. In addition, underthe Companies Act no such share may be redeemed or repurchased (a) unless it is fully paidup, (b) if such redemption or repurchase would result in there being no shares outstanding, or(c) if the Company has commenced liquidation. In addition, the Company may accept thesurrender of any fully paid share for no consideration.


– III-3 –

2.7 Variation of Rights of Shares

The rights attaching to any class of shares may, subject to any rights or restrictions for the timebeing attached to any class, be varied or abrogated with the consent in writing of the holdersof not less than two-thirds in nominal value of the issued shares of that class, or with thesanction of a special resolution passed at a separate meeting of the holders of the shares of thatclass.

2.8 General Meetings of Shareholders

Shareholders’ general meetings may be held in such place within or outside the Cayman Islandsas the Board of Directors considers appropriate. The quorum for a shareholders’ generalmeeting is a member or members (or in the case of a member being a corporation, by its dulyauthorized representative) together holding (or representing by proxy) at the date of therelevant meeting not less than one-third of the voting power of then outstanding shares of theCompany’s ordinary shares that are entitled to vote at such meeting.

As a Cayman Islands exempted company, the Company is not obliged by the Companies Actto call shareholders’ annual general meetings. The Memorandum and Articles of Associationprovide that we shall in each year hold a general meeting as our annual general meeting.

Shareholders’ annual general meetings and any other general meetings of the shareholders maybe convened by the Board of Directors. The Board of Directors shall give not less than 14 days’notice of a shareholders’ meeting to all shareholders other than such as, under the provisionshereof or the terms of issue of the shares they hold, are not entitled to receive such notice fromthe Company. The Board of Directors may fix any date as the record date for determining theshareholders entitled to receive notice of and to vote at any general meeting of the Companybut, unless so fixed, as regards the entitlement to receive notice of a meeting or notice of anyother matter, the record date shall be the date of despatch of the notice and, as regards theentitlement to vote at a meeting, and any adjournment thereof, the record date shall be the dateof the original meeting.

Cayman Islands law provides shareholders with only limited rights to requisition a generalmeeting, and does not provide shareholders with any right to put any proposal before a generalmeeting. However, these rights may be provided in a company’s articles of association. TheMemorandum and Articles of Association allow any two or more shareholders holding sharesrepresenting in aggregate not less than one-third of the total voting rights in the paid up capitalof the Company to requisition an extraordinary general meeting, in which case the directors areobliged to call such meeting; however, the Memorandum and Articles of Association do notprovide the shareholders with any right to put any proposals before annual general meetings orextraordinary general meetings.

2.9 Appointment and Removal of Directors

The Articles of Association provide that the Shareholders of the Company may from time totime by ordinary resolution fix, increase or reduce the number of Directors but the number ofDirectors shall not be less than two.


– III-4 –

The Articles of Association provide that the Company may by ordinary resolution appoint anyperson to be a Director or remove any Director. In addition, the Board may, by the affirmativevote of a simple majority of the remaining Directors present and voting at a Board meeting,appoint any person as a Director to fill a casual vacancy or as an addition to the existing Board.Any Director so appointed shall hold office only until the next following annual generalmeeting of the Company and shall then be eligible for re-election at that meeting.

There is no shareholding qualification for Directors nor is there any specific age limit forDirectors.

The office of a Director shall be vacated:

(a) if the Director gives notice in writing to the Company that such Director resigns the officeof Director;

(b) if an order is made by any competent court or official on the grounds that he is or maybe suffering from mental disorder or is otherwise incapable of managing his affairs andthe Board resolves that his office be vacated;

(c) if, without leave, he is absent from meetings of the Board for a continuous period of12 months, and the Board resolves that his office be vacated;

(d) if he becomes bankrupt or has a receiving order made against him or suspends paymentor compounds with his creditors generally;

(e) if he ceases to be or is prohibited from being a Director by law or by virtue of anyprovisions in the Articles;

(f) if he shall be removed from office by notice in writing served upon him signed by not lessthan three-fourths in number (or, if that is not a round number, the nearest lower roundnumber) of the Directors (including himself) then in office; or

(g) if he shall be removed from office by an ordinary resolution of the Shareholders of theCompany.

2.10 Proceedings of the Board

The quorum necessary for the transaction of the business of the Directors shall be a majorityof the Directors then in office.

The Directors may meet together (whether within or outside the Cayman Islands) for thedespatch of business, adjourn and otherwise regulate their meetings and proceedings as theythink fit. Questions arising at any meeting shall be decided by a majority of votes. In the caseof an equality of votes, the chairman of the meeting shall have a second or casting vote.


– III-5 –

2.11 Changes in Share Capital

The Company may by ordinary resolution:

(a) increase the capital by such sum, to be divided into shares of such amounts, as theresolution shall prescribe;

(b) consolidate and divide all or any of its share capital into shares or larger amount than itsexisting shares;

(c) cancel any shares which at the date of the passing of the resolution have not been takenor agreed to be taken by any person, and diminish the amount of its share capital by theamount of the shares so cancelled subject to the provisions of the Companies Act; and

(d) sub-divide its shares or any of them into shares of smaller amount than is fixed by theMemorandum, subject to the provisions of the Companies Act, and so that the resolutionwhereby any share is sub-divided may determine that, as between the holders of theshares resulting from such sub-division, one or more of the shares may have any suchpreferred or other special rights, over, or may have such deferred rights or be subject toany such restrictions as compared with the others as the Company has power to attach tounissued or new shares.

2.12 Directors’ Power to Issue Class A ordinary shares

Subject to the provisions in the Memorandum and the Articles and to any direction that maybe given by the Company in a general meeting, the Directors may, in their absolute discretionand without approval of the existing shareholders, issue shares, grant rights over existingshares or issue other securities in one or more series as they deem necessary and appropriateand determine designations, powers, preferences, privileges and other rights, includingdividend rights, conversion rights, terms of redemption and liquidation preferences, any or allof which may be greater than the powers and rights associated with the shares held by existingshareholders, at such times and on such other terms as the Directors think proper.

2.13 Directors Borrowing Powers

The Board may exercise all the powers of the Company to raise or borrow money or to securethe payment of any sum or sums of money for the purposes of the Company and to mortgageor charge its undertaking, property and assets (present and future) and uncalled capital or anypart thereof.

2.14 Disclosure of Interest in Contracts with the Company or any of our Subsidiaries

A Director who to his knowledge is in any way, whether directly or indirectly, interested in acontract or arrangement or proposed contract or arrangement with the Company shall declarethe nature of his interest at a meeting of the Board. A general notice given to the Directors byany Director to the effect that he is a member of any specified company or firm and is to beregarded as interested in any contract or arrangement which may thereafter be made with thatcompany or firm or he is to be regarded as interested in any contract or arrangement which maythereafter be made with a specified person who is connected with him shall be deemed asufficient declaration of interest in relation to any such contract or arrangement.


– III-6 –

Following a declaration being made as aforementioned and subject to any separate requirementfor audit committee approval under applicable law or the listing rules of the Designated StockExchange (as defined in the Articles), and unless disqualified by the chairman of the relevantBoard meeting, a Director may vote in respect of any contract or proposed contract orarrangement in which such Director is interested and may be counted in the quorum at suchmeeting.

2.15 Remuneration of Directors

The remuneration of the Directors may be determined by the Directors or by ordinaryresolution.

The Directors shall be entitled to be paid their travelling, hotel and other expenses properlyincurred by them in going to, attending and returning from meetings of the Directors, orcommittee of the Directors, or general meetings of the Company, or otherwise in connectionwith the business of the Company, or to receive such fixed allowance in respect thereof as maybe determined by the Directors from time to time, or a combination partly of one such methodand partly the other.

2.16 Restriction on Ownership of Securities

There are no provisions in the Articles of Association relating to restrictions on ownership ofthe Company’s shares or securities.

SUMMARY OF CAYMAN ISLANDS COMPANY LAW AND TAXATION

1 Introduction

The Companies Act is derived, to a large extent, from the older Companies Acts of England,although there are significant differences between the Companies Act and the currentCompanies Act of England. Set out below is a summary of certain provisions of the CompaniesAct, although this does not purport to contain all applicable qualifications and exceptions orto be a complete review of all matters of corporate law and taxation which may differ fromequivalent provisions in jurisdictions with which interested parties may be more familiar.

2 Incorporation

The Company was incorporated in the Cayman Islands as an exempted company with limitedliability on April 8, 2015 under the Companies Act. As such, its operations must be conductedmainly outside the Cayman Islands. The Company is required to file an annual return each yearwith the Registrar of Companies of the Cayman Islands and pay a fee which is based on thesize of its authorised share capital.

3 Share Capital

The Companies Act permits a company to issue ordinary shares, preference shares, redeemableshares or any combination thereof.


– III-7 –

The Companies Act provides that where a company issues shares at a premium, whether forcash or otherwise, a sum equal to the aggregate amount of the value of the premia on thoseshares shall be transferred to an account called the “share premium account”. At the option ofa company, these provisions may not apply to premia on shares of that company allottedpursuant to any arrangement in consideration of the acquisition or cancellation of shares in anyother company and issued at a premium. The Companies Act provides that the share premiumaccount may be applied by a company, subject to the provisions, if any, of its memorandum andarticles of association, in such manner as the company may from time to time determineincluding, but without limitation:

(a) paying distributions or dividends to members;

(b) paying up unissued shares of the company to be issued to members as fully paid bonusshares;

(c) in the redemption and repurchase of shares (subject to the provisions of section 37 of theCompanies Act);

(d) writing-off the preliminary expenses of the company;

(e) writing-off the expenses of, or the commission paid or discount allowed on, any issue ofshares or debentures of the company; and

(f) providing for the premium payable on redemption or purchase of any shares or debenturesof the company.

No distribution or dividend may be paid to members out of the share premium account unlessimmediately following the date on which the distribution or dividend is proposed to be paid thecompany will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Act provides that, subject to confirmation by the Grand Court of the CaymanIslands, a company limited by shares or a company limited by guarantee and having a sharecapital may, if so authorised by its articles of association, by special resolution reduce its sharecapital in any way.

Subject to the detailed provisions of the Companies Act, a company limited by shares or acompany limited by guarantee and having a share capital may, if so authorised by its articlesof association, issue shares which are to be redeemed or are liable to be redeemed at the optionof the company or a shareholder. In addition, such a company may, if authorised to do so byits articles of association, purchase its own shares, including any redeemable shares. Themanner of such a purchase must be authorised either by the articles of association or by anordinary resolution of the company. The articles of association may provide that the manner ofpurchase may be determined by the directors of the company. At no time may a companyredeem or purchase its shares unless they are fully paid. A company may not redeem orpurchase any of its shares if, as a result of the redemption or purchase, there would no longerbe any member of the company holding shares. A payment out of capital by a company for theredemption or purchase of its own shares is not lawful unless immediately following the dateon which the payment is proposed to be made, the company shall be able to pay its debts asthey fall due in the ordinary course of business.


– III-8 –

There is no statutory restriction in the Cayman Islands on the provision of financial assistanceby a company for the purchase of, or subscription for, its own or its holding company’s shares.Accordingly, a company may provide financial assistance if the directors of the companyconsider, in discharging their duties of care and to act in good faith, for a proper purpose andin the interests of the company, that such assistance can properly be given. Such assistanceshould be on an arm’s-length basis.

4 Dividends and Distributions

With the exception of section 34 of the Companies Act, there are no statutory provisionsrelating to the payment of dividends. Based upon English case law which is likely to bepersuasive in the Cayman Islands in this area, dividends may be paid only out of profits. Inaddition, section 34 of the Companies Act permits, subject to a solvency test and theprovisions, if any, of the company’s memorandum and articles of association, the payment ofdividends and distributions out of the share premium account (see paragraph Summary of theConstitution of Our Company — 2 Articles of Association — 2.2 Dividends above for details).

5 Shareholders’ Suits

The Cayman Islands courts can be expected to follow English case law precedents. The rule inFoss v. Harbottle (and the exceptions thereto which permit a minority shareholder tocommence a class action against or derivative actions in the name of the company to challenge(a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraudagainst the minority where the wrongdoers are themselves in control of the company, and (c) anaction which requires a resolution with a qualified (or special) majority which has not beenobtained) has been applied and followed by the courts in the Cayman Islands.

6 Protection of Minorities

In the case of a company (not being a bank) having a share capital divided into shares, theGrand Court of the Cayman Islands may, on the application of members holding not less thanone-fifth of the shares of the company in issue, appoint an inspector to examine into the affairsof the company and to report thereon in such manner as the Grand Court shall direct.

Any shareholder of a company may petition the Grand Court of the Cayman Islands which maymake a winding up order if the court is of the opinion that it is just and equitable that thecompany should be wound up.

Claims against a company by its shareholders must, as a general rule, be based on the generallaws of contract or tort applicable in the Cayman Islands or their individual rights asshareholders as established by the company’s memorandum and articles of association.

The English common law rule that the majority will not be permitted to commit a fraud on theminority has been applied and followed by the courts of the Cayman Islands.

7 Disposal of Assets

The Companies Act contains no specific restrictions on the powers of directors to dispose ofassets of a company. As a matter of general law, in the exercise of those powers, the directorsmust discharge their duties of care and to act in good faith, for a proper purpose and in theinterests of the company.


– III-9 –

8 Accounting and Auditing Requirements

The Companies Act requires that a company shall cause to be kept proper books of accountwith respect to:

(a) all sums of money received and expended by the company and the matters in respect ofwhich the receipt and expenditure takes place;

(b) all sales and purchases of goods by the company; and

(c) the assets and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as arenecessary to give a true and fair view of the state of the company’s affairs and to explain itstransactions.

9 Register of Members

An exempted company may, subject to the provisions of its articles of association, maintain itsprincipal register of members and any branch registers at such locations, whether within orwithout the Cayman Islands, as its directors may from time to time think fit. There is norequirement under the Companies Act for an exempted company to make any returns ofmembers to the Registrar of Companies of the Cayman Islands. The names and addresses of themembers are, accordingly, not a matter of public record and are not available for publicinspection.

10 Inspection of Books and Records

Members of a company will have no general right under the Companies Act to inspect or obtaincopies of the register of members or corporate records of the company. They will, however,have such rights as may be set out in the company’s articles of association.

11 Special Resolutions

The Companies Act provides that a resolution is a special resolution when it has been passedby a majority of at least two-thirds of such members as, being entitled to do so, vote in personor, where proxies are allowed, by proxy at a general meeting of which notice specifying theintention to propose the resolution as a special resolution has been duly given, except that acompany may in its articles of association specify that the required majority shall be a numbergreater than two-thirds, and may additionally so provide that such majority (being not less thantwo-thirds) may differ as between matters required to be approved by a special resolution.Written resolutions signed by all the members entitled to vote for the time being of thecompany may take effect as special resolutions if this is authorised by the articles ofassociation of the company.

12 Subsidiary Owning Class A ordinary shares in Parent

The Companies Act does not prohibit a Cayman Islands company acquiring and holding sharesin its parent company provided its objects so permit. The directors of any subsidiary makingsuch acquisition must discharge their duties of care and to act in good faith, for a properpurpose and in the interests of the subsidiary.


– III-10 –

13 Mergers and Consolidations

The Companies Act permits mergers and consolidations between Cayman Islands companiesand between Cayman Islands companies and non-Cayman Islands companies. For thesepurposes, (a) “merger” means the merging of two or more constituent companies and thevesting of their undertaking, property and liabilities in one of such companies as the survivingcompany, and (b) “consolidation” means the combination of two or more constituentcompanies into a consolidated company and the vesting of the undertaking, property andliabilities of such companies to the consolidated company. In order to effect such a merger orconsolidation, the directors of each constituent company must approve a written plan of mergeror consolidation, which must then be authorised by (a) a special resolution of each constituentcompany and (b) such other authorisation, if any, as may be specified in such constituentcompany’s articles of association. The written plan of merger or consolidation must be filedwith the Registrar of Companies of the Cayman Islands together with a declaration as to thesolvency of the consolidated or surviving company, a list of the assets and liabilities of eachconstituent company and an undertaking that a copy of the certificate of merger orconsolidation will be given to the members and creditors of each constituent company and thatnotification of the merger or consolidation will be published in the Cayman Islands Gazette.Dissenting shareholders have the right to be paid the fair value of their shares (which, if notagreed between the parties, will be determined by the Cayman Islands court) if they follow therequired procedures, subject to certain exceptions. Court approval is not required for a mergeror consolidation which is effected in compliance with these statutory procedures.

14 Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved bya majority in number representing 75% in value of shareholders or creditors, depending on thecircumstances, as are present at a meeting called for such purpose and thereafter sanctioned bythe Grand Court of the Cayman Islands. Whilst a dissenting shareholder would have the rightto express to the Grand Court his view that the transaction for which approval is sought wouldnot provide the shareholders with a fair value for their shares, the Grand Court is unlikely todisapprove the transaction on that ground alone in the absence of evidence of fraud or bad faithon behalf of management and if the transaction were approved and consummated the dissentingshareholder would have no rights comparable to the appraisal rights (i.e. the right to receivepayment in cash for the judicially determined value of his shares) ordinarily available, forexample, to dissenting shareholders of United States corporations.

15 Take-overs

Where an offer is made by a company for the shares of another company and, within fourmonths of the offer, the holders of not less than 90% of the shares which are the subject of theoffer accept, the offeror may at any time within two months after the expiration of the said fourmonths, by notice require the dissenting shareholders to transfer their shares on the terms ofthe offer. A dissenting shareholder may apply to the Grand Court of the Cayman Islands withinone month of the notice objecting to the transfer. The burden is on the dissenting shareholderto show that the Grand Court should exercise its discretion, which it will be unlikely to dounless there is evidence of fraud or bad faith or collusion as between the offeror and the holdersof the shares who have accepted the offer as a means of unfairly forcing out minorityshareholders.


– III-11 –

16 Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association mayprovide for indemnification of officers and directors, except to the extent any such provisionmay be held by the Cayman Islands courts to be contrary to public policy (e.g. for purportingto provide indemnification against the consequences of committing a crime).

17 Liquidation

A company may be placed in liquidation compulsorily by an order of the court, or voluntarily(a) by a special resolution of its members if the company is solvent, or (b) by an ordinaryresolution of its members if the company is insolvent. The liquidator’s duties are to collect theassets of the company (including the amount (if any) due from the contributories(shareholders)), settle the list of creditors and discharge the company’s liability to them,rateably if insufficient assets exist to discharge the liabilities in full, and to settle the list ofcontributories and divide the surplus assets (if any) amongst them in accordance with the rightsattaching to the shares.

18 Stamp Duty on Transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islandscompanies except those which hold interests in land in the Cayman Islands.

19 Taxation

Pursuant to section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, theCompany may obtain an undertaking from the Financial Secretary of the Cayman Islands:

(a) that no law which is enacted in the Cayman Islands imposing any tax to be levied onprofits, income, gains or appreciations shall apply to the Company or its operations; and

(b) in addition, that no tax to be levied on profits, income, gains or appreciations or whichis in the nature of estate duty or inheritance tax shall be payable:

(i) on or in respect of the shares, debentures or other obligations of the Company; or

(ii) by way of the withholding in whole or in part of any relevant payment as definedin section 6(3) of the Tax Concessions Act (As Revised).

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits,income, gains or appreciations and there is no taxation in the nature of inheritance tax or estateduty. There are no other taxes likely to be material to the Company levied by the Governmentof the Cayman Islands save certain stamp duties which may be applicable, from time to time,on certain instruments executed in or brought within the jurisdiction of the Cayman Islands.The Cayman Islands are not party to any double tax treaties that are applicable to any paymentsmade by or to the Company.

20 Exchange Control

There are no exchange control regulations or currency restrictions in the Cayman Islands.


– III-12 –

21 General

Maples and Calder (Hong Kong) LLP, the Company’s legal advisers on Cayman Islands law,have sent to the Company a letter of advice summarising aspects of Cayman Islands companylaw. This letter, together with a copy of the Companies Act, is available on display as referredto in the section headed “Documents available on display” in Appendix V. Any person wishingto have a detailed summary of Cayman Islands company law or advice on the differencesbetween it and the laws of any jurisdiction with which he/she is more familiar is recommendedto seek independent legal advice.


– III-13 –

FURTHER INFORMATION ABOUT US

Our incorporation

Our Company was incorporated in the Cayman Islands under the Cayman Companies Act asan exempted company with limited liability on June 7, 2010. We have registered with theRegistrar of Companies in Hong Kong as a non-Hong Kong company under Part 16 of theCompanies Ordinance with an address at Level 54, Hopewell Centre, 183 Queen’s Road East,Hong Kong. Ho Wing Tsz Wendy has been appointed as our authorized representative for theacceptance of service of process and notices in Hong Kong.

As we were incorporated in the Cayman Islands, our corporate structure and Memorandum andArticles of Association are subject to the relevant laws and regulations of the Cayman Islands.A summary of the relevant laws and regulations of the Cayman Islands and of the Memorandumand Articles of Association is set out in “Summary of Our Constitution and Cayman CompanyLaw” in Appendix III.

Changes in our share capital

As at September 30, 2021, we had an authorized share capital of US$600,000, divided into2,400,000,000 shares of a nominal or par value of US$0.00025, of which (i) 1,800,000,000,shall be designated as Class A ordinary shares, (ii) 200,000,000 shall be designated as ClassB ordinary shares, and (iii) 400,000,000 undesignated and our issued share capital was127,312,831 Class A ordinary shares and 101,778,958 Class B ordinary shares.

The following tables set out the changes in the share capital of our Company during the periodspresented in this document:

Fiscal year ended December 31, 2018

Class AOrdinary

Share

Class BOrdinary

ShareShareholders’

Equity

(US$)

Balances as at January 1, 2018 120,926,916 101,778,958 55,676.47Exercise and vesting of

share-based awards 2,131,677 — 532.92Balances as at December 31, 2018 123,058,593 101,778,958 56,209.39


Class AOrdinary

Share

Class BOrdinary


Equity

(US$)



APPENDIX IV STATUTORY AND GENERAL INFORMATION

– IV-1 –


Class AOrdinary

Share

Class BOrdinary


Equity

(US$)



Nine months ended September 30, 2021

Class AOrdinary

Share

Class BOrdinary


Equity

(US$)


share-based awards 1,404,206 – 351.05Balances as at September 30, 2021 127,312,831 101,778,958 57,272.95

Changes in the share capital of our Major Subsidiaries

The following sets out the changes in the share capital of our subsidiaries during the three yearsimmediately preceding the date of this document:

• On March 19, 2020, the registered capital of Beijing Weimeng Technology Co., Ltd. (北京微夢創科網絡技術有限公司) was increased from RMB555.0 million to RMB560.6million.

• On February 17, 2020, the registered capital of Beijing Weimeng Chuangke InvestmentManagement Co., Ltd. (北京微夢創科創業投資管理有限公司) was increased fromRMB10 million to RMB30 million.

SHARE INCENTIVE PLANS

For information on our Company’s share incentive plans, see “Directors and SeniorManagement — Compensation”.


– IV-2 –

FURTHER INFORMATION ABOUT OUR BUSINESS

Summary of material contracts

The following contracts (not being contracts entered into in the ordinary course of business)were entered into by our Group within the two years preceding the date of this document andare material:

(a) a loan agreement dated February 17, 2020 between Weibo Internet Technology (China)Co., Ltd. (微夢創科網絡科技(中國)有限公司, “Weibo Technology”) and Yunli Liu (劉運利), a shareholder of Beijing Weimeng Chuangke Investment Management Co., Ltd. (北京微夢創科創業投資管理有限公司, “Weimeng Chuangke”), pursuant to which WeiboTechnology has granted an interest-free long term loan of RMB10 million to Yunli Liu (劉運利), with the purpose of providing funds necessary for Yunli Liu (劉運利) to makecapital injections into Weimeng Chuangke for holding 50% equity interests of WeimengChuangke;

(b) an equity transfer agreement dated February 17, 2020 between Weibo Technology andYunli Liu (劉運利), pursuant to which Yunli Liu (劉運利) granted Weibo Technology aright to request at any time the transfer of all or part of Yunli Liu (劉運利)’s 50% equityinterests in Weimeng Chuangke at a total price of RMB15 million;

(c) a loan repayment agreement dated February 17, 2020 between Weibo Technology andYunli Liu (劉運利), pursuant to which the consideration payable to Yunli Liu (劉運利) byWeibo Technology for the transfer of all or part of Yunli Liu (劉運利)’s 50% equityinterests in Weimeng Chuangke to Weibo Technology under the equity transfer agreementas summarized in paragraph (b) above offsets all or part of Yunli Liu (劉運利)’s loanrepayment obligations owed to Weibo Technology under the loan agreement assummarized in paragraph (a) above;

(d) an equity pledge agreement dated February 17, 2020 between Weibo Technology andYunli Liu (劉運利), pursuant to which Yunli Liu (劉運利) agreed to pledge to WeiboTechnology all of Yunli Liu (劉運利)’s 50% equity interests of Weimeng Chuangke tosecure the performance of Yunli Liu (劉運利)’s obligations under the loan agreement assummarized in paragraph (a) above and the equity transfer agreement as summarized inparagraph (b) above;

(e) a power of attorney dated February 17, 2020 executed by Yunli Liu (劉運利) in favour ofWeibo Technology, pursuant to which Yunli Liu (劉運利) agreed to authorize WeiboTechnology to exercise all the voting rights in respect of Yunli Liu (劉運利)’s 50% equityinterests in Weimeng Chuangke at its shareholders’ meetings;

(f) a loan agreement dated February 17, 2020 between Weibo Technology and Wei Wang (王巍), a shareholder of Weimeng Chuangke, pursuant to which Weibo Technology hasgranted an interest-free long term loan of RMB10 million to Wei Wang (王巍), with thepurpose of providing funds necessary for Wei Wang (王巍) to make capital injections intoWeimeng Chuangke for holding 50% equity interests of Weimeng Chuangke;

(g) an equity transfer agreement dated February 17, 2020 between Weibo Technology andWei Wang (王巍), pursuant to which Wei Wang (王巍) granted Weibo Technology a rightto request at any time the transfer of all or part of Wei Wang (王巍)’s 50% equity interestsof Weimeng Chuangke at a total price of RMB15 million;


– IV-3 –

(h) a loan repayment agreement dated February 17, 2020 between Weibo Technology and WeiWang (王巍), pursuant to which the consideration payable to Wei Wang (王巍) by WeiboTechnology for the transfer of all or part of Wei Wang (王巍)’s 50% equity interests inWeimeng Chuangke to Weibo Technology under the equity transfer agreement assummarized in paragraph (g) above offsets all or part of Wei Wang (王巍)’s loanrepayment obligations owed to Weibo Technology under the loan agreement assummarized in paragraph (f) above;

(i) an equity pledge agreement dated February 17, 2020 between Weibo Technology and WeiWang (王巍), pursuant to which Wei Wang (王巍) agreed to pledge to Weibo Technologyall of Wei Wang (王巍)’s 50% equity interests of Weimeng Chuangke to secure theperformance of Wei Wang (王巍)’s obligations under the loan agreement as summarizedin paragraph (f) above and the equity transfer agreement as summarized in paragraph (g)above;

(j) a power of attorney dated February 17, 2020 executed by Wei Wang (王巍) in favour ofWeibo Technology, pursuant to which Wei Wang (王巍) agreed to authorize WeiboTechnology to exercise all the voting rights in respect of Wei Wang (王巍)’s 50% equityinterest in Weimeng Chuangke at its shareholders’ meetings;

(k) an exclusive technical assistance agreement dated February 17, 2020 between WeiboTechnology and Weimeng Chuangke, pursuant to which Weimeng Chuangke hasappointed Weibo Technology as its exclusive provider of technical assistance, includingbut not limited to technology transfer, technology licensing, technology service andprovision of equipment, required for any of Weimeng Chuangke’s businesses, inconsideration of service fees;

(l) an exclusive sales agency agreement dated February 17, 2020 between Weibo Technologyand Weimeng Chuangke, pursuant to which Weimeng Chuangke has appointed WeiboTechnology as its exclusive sales agent for all the products and services provided byWeimeng Chuangke, in consideration of agency fees;

(m) a trademark license agreement dated February 17, 2020 between Weibo Technology andWeimeng Chuangke, pursuant to which Weibo Technology has granted WeimengChuangke licenses to use the trademarks of Weibo Technology in consideration of licensefees; and

(n) the Hong Kong Underwriting Agreement.


– IV-4 –

Summary of the contractual arrangement

As described in “History and Corporate Structure — Corporate Structure — ContractualArrangements”, our Company or its Major Subsidiaries entered into the following contracts inrelation to the contractual arrangements that are material to our Group:

(a) a trademark license agreement dated October 11, 2010 between Weibo Technology andWeimeng, pursuant to which Weibo Technology has granted Weimeng trademark licensesto use the trademarks held by or licensed to Weibo Technology in consideration of thelicense fees paid by Weimeng;

(b) an exclusive technical services agreement dated October 11, 2010 between WeiboTechnology and Weimeng, pursuant to which Weimeng has granted Weibo Technology theexclusive right to provide technical services required for any of Weimeng’s businesses, inconsideration of fees paid by Weimeng;

(c) an exclusive sales agency agreement dated October 11, 2010 between Weibo Technologyand Weimeng, pursuant to which Weimeng has granted Weibo Technology the exclusiveright to distribute, sell and provide agency services for all the products and servicesprovided by Weimeng;

(d) a loan agreement dated January 19, 2018 between Weibo Technology and Wei Zheng (鄭偉), a shareholder of Weimeng, pursuant to which Weibo Technology has granted aninterest-free loan of RMB0.1 billion to Wei Zheng (鄭偉), with the sole purpose ofproviding funds necessary for Wei Zheng (鄭偉) to make capital injections into Weimeng;

(e) an equity pledge agreement dated January 19, 2018 between Weibo Technology and WeiZheng (鄭偉), pursuant to which Wei Zheng (鄭偉) agreed to pledge to Weibo Technologyall the rights of Wei Zheng (鄭偉)’s 20% equity interests of Weimeng to secure theperformance of Wei Zheng (鄭偉)’s loan repayment obligations under the loan agreement;

(f) a power of attorney dated January 19, 2018 executed by Wei Zheng (鄭偉), a shareholderof Weimeng, in favour of and accepted by Weibo Technology, pursuant to which WeiZheng (鄭偉) agreed to authorize Weibo Technology or its designated person(s), as WeiZheng (鄭偉)’s attorney-in-fact, to exercise all the voting rights in respect of Wei Zheng(鄭偉)’s equity interests in Weimeng at its shareholders’ meetings;

(g) an equity transfer agreement dated January 19, 2018 between Weibo Technology and WeiZheng (鄭偉), a shareholder of Weimeng, pursuant to which Wei Zheng (鄭偉) grantedWeibo Technology an option to purchase Wei Zheng (鄭偉)’s 20% equity interests ofWeimeng at a purchase price specified under the agreement;

(h) shareholders resolutions dated December 12, 2015 passed by Zenghui Cao (曹增輝), WeiWang (王巍), Yunli Liu (劉運利) and Wei Zheng (鄭偉), the shareholders of Weimengholding 100% equity interests of Weimeng at the time, resolving that, shareholders ofWeimeng agreed to (i) continue the performance of Weimeng’s obligations under thetrademark license agreement, the exclusive technical services agreement and theexclusive sales agency agreement respectively between Weibo Technology and Weimengon October 11, 2010; (ii) allow the shareholders of Weimeng to transfer their respectiveequity interests in Weimeng to Weibo Technology at any time determined by WeiboTechnology and waive their respective rights of first refusal regarding the equity intereststo be transferred; (iii) transfer any of their equity interests in Weimeng to any party otherthan Weibo Technology or an entity designated by Weibo Technology only with the


– IV-5 –

approval of all the shareholders of Weimeng; (iv) pledge all of their equity interests inWeimeng to Weibo Technology; (v) appoint Weibo Technology as their attorney-in-fact toexercise all the voting rights in respect of their equity interests in Weimeng at itsshareholders’ meetings; and (vi) enter into the equity transfer agreement, the equitypledge agreement and the power of attorney between Weibo Technology and therespective shareholders of Weimeng; and

(i) an undertaking letter dated January 19, 2018 issued to Weibo Technology by Zenghui Cao(曹增輝), Wei Wang (王巍), Yunli Liu (劉運利) and Wei Zheng (鄭偉), the shareholdersof Weimeng, pursuant to which, among others, the shareholders undertake to strictlyperform their obligations under their agreements with Weibo Technology, including butnot limited to the loan agreements, the powers of attorney, the equity transfer agreements,the loan repayment agreements and the equity pledge agreements.

For further details of the above, please see copies of the contractual arrangements, which arepublished on our website (http://ir.weibo.com) pursuant to the Hong Kong Stock Exchange’sGuidance Letter HKEX-GL94-18 and Listing Decision HKEX-LD43-3.

Our intellectual property rights

We regard our trademarks, copyrights, patents, domain names, know-how, proprietarytechnologies, and similar intellectual property as critical to our success, and we rely oncopyright, trademark and patent law and confidentiality, invention assignment and non-compete agreements with our employees and others to protect our proprietary rights. As of June30, 2021, we held 193 issued patents and 302 software copyrights inside of China and 365trademarks inside and outside of China, a number of which we consider material to ourbusiness and future development, including our registered trademarks for and “ ”and domain names for weibo.com, weibo.cn and weibo.com.cn. In addition, as of June 30,2021, we had submitted 218 patent applications and 244 trademark applications forregistration.

FURTHER INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS

Disclosure of interests

See “Major Shareholders” for disclosure of interests of directors and executive officers.

Director service contracts and remuneration

We have entered into employment agreements with each of our executive officers. See“Directors and Senior Management — Compensation — Employment agreements”.

Our officers are elected by and serve at the discretion of the board of directors. Our directorsare not subject to a term of office and hold office until such time as they resign or are removedfrom office by ordinary resolution or the unanimous written resolution of all shareholders.

We grant share-based awards to our independent directors under the Share Incentive Plans. See“Directors and Senior Management — Compensation — Share Incentive Plans”.


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Disclosures relating to our directors and experts

Save as disclosed in the sections headed “History and Corporate Structure — CorporateStructure — Contractual Arrangements” and “Related Party Transactions”, and to the bestknowledge of our Company:

(a) none of our directors nor any of the persons listed in “— Other Information —Qualification of experts” below is materially interested in the promotion of, or in anyassets which have been, within the two years immediately preceding the issue of thisdocument, acquired or disposed of by or leased to our subsidiaries and our consolidatedaffiliated entities, or are proposed to be acquired or disposed of by or leased to oursubsidiaries and our consolidated affiliated entities.

(b) none of our directors nor any of the persons listed in “— Other Information —Qualification of experts” below is materially interested in any contract or arrangementwith us subsisting at the date of this document which is unusual in its nature or conditionsor which is significant in relation to our business as a whole.

(c) none of the persons listed in “— Other Information — Qualification of experts” below hasany shareholding in us or any of our Major Subsidiaries or has the right (whether legallyenforceable or not) to subscribe for or to nominate persons to subscribe for securities inus or any of our Major Subsidiaries.

OTHER INFORMATION

Estate duty

Our directors have been advised that no material liability for estate duty is likely to fall on ourCompany or any of our subsidiaries.

Litigation

See “Business — Legal Proceedings and Compliance” for further information.

Joint Sponsors

The Joint Sponsors have applied on behalf of our Company to the Listing Committee for thelisting of, and permission to deal in, the Class A ordinary shares in issue, the Class A ordinaryshares to be issued pursuant to the Global Offering (including the additional Class A ordinaryshares that may be converted from Class B ordinary shares pursuant to the exercise of theOver-allotment Option), and the Class A ordinary shares to be issued pursuant to the ShareIncentive Plans, including pursuant to the exercise of options, the vesting of or vested butoutstanding RSUs, or other awards that have been or may be granted from time to time and theClass A ordinary shares to be issued after the conversion of our Class B ordinary shares intoClass A ordinary shares. All necessary arrangements have been made to enable the Class Aordinary shares to be admitted into CCASS.

Goldman Sachs (Asia) L.L.C., Credit Suisse (Hong Kong) Limited, CLSA Capital MarketsLimited and China International Capital Corporation Hong Kong Securities Limited satisfy theindependence criteria applicable to sponsors set out in Rule 3A.07 of the Hong Kong ListingRules.

The sponsor fee payable to each of the Joint Sponsors is US$500,000 and is payable by ourCompany.


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No material adverse change

Our directors confirm that there has been no material adverse change in our financial or tradingposition since June 30, 2021 (being the date to which our latest audited consolidated financialstatements were prepared).

Qualification of experts

The following are the qualifications of the experts (as defined under the Hong Kong ListingRules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance) who havegiven opinions or advice which are contained in this document:

Name Qualification

Goldman Sachs (Asia) L.L.C. A licensed corporation under the SFO for type 1(dealing in securities), type 2 (dealing in futurescontracts), type 4 (advising on securities), type 5(advising on futures contracts), type 6 (advising oncorporate finance) and type 9 (asset management) ofthe regulated activities as defined under the SFO.

Credit Suisse (Hong Kong)Limited

A licensed corporation under the SFO for type 1(dealing in securities), type 2 (dealing in futurescontracts), type 4 (advising on securities), type 5(advising on futures contracts), type 6 (advising oncorporate finance) and type 9 (asset management) ofthe regulated activities as defined under the SFO.

CLSA Capital Markets Limited A licensed corporation under the SFO for type 4(advising on securities) and type 6 (advising oncorporate finance) of the regulated activities as definedunder the SFO.

China International CapitalCorporation Hong KongSecurities Limited

A licensed corporation under the SFO for type 1(dealing in securities), type 2 (dealing in futurescontracts), type 4 (advising on securities), type 5(advising on futures contracts) and type 6 (advising oncorporate finance) of the regulated activities as definedunder the SFO.

PricewaterhouseCoopers Certified Public Accountants under ProfessionalAccountant Ordinance (Cap. 50) and Registered PublicInterest Entity Auditor under Financial ReportingCouncil Ordinance (Cap. 588)

TransAsia Lawyers Legal adviser to Company as to PRC law

Haiwen & Partners Legal adviser to the Joint Sponsors and theUnderwriters as to PRC law

Maples and Calder (Hong Kong)LLP

Legal adviser to Company as to Cayman Islands law

China Insights ConsultancyLimited

Industry consultant


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Consents of experts

Each of the experts above has given and has not withdrawn its consent to the issue of thisdocument with the inclusion of its report and/or letter and/or legal opinion (as the case may be)and references to its name included in the form and context in which it respectively appears.

None of the experts named above has any shareholding interests in our Company or any of oursubsidiaries or the right (whether legally enforceable or not) to subscribe for or to nominatepersons to subscribe for securities in our Company or any of our subsidiaries.

Preliminary Expenses

Our Company did not incur any material preliminary expenses.

Promoter

Our Company has no promoter for the purpose of the Hong Kong Listing Rules. Within the twoyears immediately preceding the date of this document, no cash, securities or other benefit hasbeen paid, allotted or given nor are any proposed to be paid, allotted or given to any promotersin connection with the Global Offering and the related transactions described in this document.

Binding effect

This document shall have the effect, if an application is made in pursuance of this document,of rendering all persons concerned bound by all of the provisions (other than the penalprovisions) of Sections 44A and 44B of the Companies (Winding Up and MiscellaneousProvisions) Ordinance insofar as applicable.

Bilingual document

The English language and Chinese language versions of this document are being publishedseparately, in reliance upon the exemption provided by Section 4 of the Companies (Exemptionof Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of theLaws of Hong Kong).

Particulars of the Selling Shareholder

The Selling Shareholder, SINA Corporation, with its registered address located at MapleCorporate Service Limited, Ugland House, P.O. Box 309, Grand Cayman, KY1-1104, CaymanIslands, is a wholly owned subsidiary of Sina Group Holding Company Limited, which is awholly owned subsidiary of New Wave MMXV Limited, a business company incorporated inthe BVI and controlled by Mr. Charles Chao. SINA Corporation is the parent company and acontrolling shareholder of the Company. The number of Sale Shares to be offered by the SellingShareholder under the Global Offering is 5,500,000 Shares.

For further details, please see the section headed “Relationship with Our ControllingShareholders”.


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Miscellaneous

Save as disclosed in the “— Changes in our share capital” and “— Changes in the share capitalof our Major Subsidiaries” above, the “Financial Information” section and the Accountant’sReport in Appendix IA to this document, or otherwise waived or exempted from disclosurepursuant to the waivers and exemptions disclosed in this document (see “Waivers andExemptions”), within the two years immediately preceding the date of this document:

(a) to the best of our knowledge, neither we nor any of our Major Subsidiaries has issued oragreed to issue any share or loan capital fully or partly paid up either for cash or for aconsideration other than cash;

(b) no share or loan capital of our Company is under option or is agreed conditionally orunconditionally to be put under option;

(c) no commissions, discounts, brokerage or other special terms have been granted inconnection with the issue or sale of any share capital or debentures of our Company orany of our Major Subsidiaries;

(d) no founder, management or deferred Class A ordinary shares of our Company or any ofour Major Subsidiaries has been issued or agreed to be issued; and

(e) there is no arrangement under which future dividends are waived or agreed to be waived.

Our branch register of members will be maintained in Hong Kong by our Hong Kong ShareRegistrar, Computershare Hong Kong Investor Services Limited. Unless the directorsotherwise agree, all transfers and other documents of title of Class A ordinary shares must belodged for registration with and registered by our share register in Hong Kong and may not belodged in the Cayman Islands. All necessary arrangements have been made to enable the ClassA ordinary shares to be admitted to CCASS.

Our directors confirm that:

(a) there has not been any interruption in our business that may have or has had a materialadverse effect on our financial position in the 12 months immediately preceding the dateof this document; and

(b) save for the 2022 Notes, 2024 Notes and 2030 Notes, we and our Major Subsidiaries haveno outstanding debentures or convertible debt securities.

The English version of this document shall prevail over the Chinese version.


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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES

The following documents, among others, were delivered to the Registrar of Companies in HongKong for registration together with this document:

(a) a copy of the GREEN Application Form;

(b) a copy of each of the material contracts referred to in “Statutory and General Information— Further Information About Our Business — Summary of material contracts” inAppendix IV;

(c) the written consents referred to in “Statutory and General Information — OtherInformation — Consents of experts” in Appendix IV; and

(d) the statement of particulars of the Selling Shareholder.

DOCUMENTS AVAILABLE ON DISPLAY

Copies of the following documents will be published on the websites of the Hong Kong StockExchange at www.hkexnews.hk and our Company at http://ir.weibo.com/ for 14 days from thedate of this document (both dates inclusive):

(a) the Memorandum and Articles of Association;

(b) our audited consolidated financial statements for the years ended December 31, 2018,2019 and 2020 and the six months ended June 30, 2021;

(c) the Accountant’s Report from PricewaterhouseCoopers, the text of which are set out inAppendix IA;

(d) the report on review of interim financial information from PricewaterhouseCoopers, thetext of which is set out in Appendix IB;

(e) the report on the unaudited pro forma financial information fromPricewaterhouseCoopers, the text of which are set out in Appendix II;

(f) the legal opinion issued by TransAsia Lawyers, our PRC Legal Adviser on certain aspectsof our Group;

(g) the legal opinion issued by Haiwen & Partners, the PRC Legal Adviser to the JointSponsors and Underwriters, on certain aspects of our Group;

(h) the letter of advice prepared by Maples and Calder (Hong Kong) LLP, our Cayman Islandslegal adviser, summarizing certain aspects of the Cayman Companies Act referred to inAppendix III;

(i) the report issued by China Insights Consultancy Limited, a summary of which is set forthin “Industry Overview”;

(j) the material contracts referred to in “Statutory and General Information — FurtherInformation About Our Business — Summary of material contracts” in Appendix IV;

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OFCOMPANIES AND AVAILABLE ON DISPLAY

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(k) the written consents referred to in “Statutory and General Information — OtherInformation — Consents of experts” in Appendix IV;

(l) the Cayman Companies Act; and

(m) the statement of particulars of the Selling Shareholder.

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OFCOMPANIES AND AVAILABLE ON DISPLAY

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