In May 2016, the Company and an unrelated third party, set up iSNOB Holdings Limited (“iSNOB”), each holding
80
% and
20
% ordinary shares, respectively with a fully paid registered capital of RMB
1,000
. iSNOB operates an online shopping platform since inception. On October 31, 2017, due to issuance of new Series A Preferred Shares by iSNOB to an unrelated third party investor, the Company’s equity interest in iSNOB was diluted to
18
% on a fully diluted basis and at the meantime was redesignated as redeemable preferred shares. As a result of the dilution and redesignation, the Company deconsolidated the financial results of iSNOB and accounted for its investment as an
investment. The Company used the latest financing price of iSNOB to measure the fair value of retained interest in iSNOB at the deconsolidation date and recognized a “Gain from investments, net” of RMB
13,592
in the Consolidated Statements of Operations and Comprehensive Loss.
Upon the closing of the latest financing of iSNOB in May 2018, the Company held
18,000,000
convertible and redeemable preferred shares of iSNOB, and the equity interest of the Company was diluted to
14.5
%. According to the investment agreement, the Company has the option to request iSNOB to redeem the Company’s investments at the Company’s investment cost plus the interest if iSNOB fails to consummate a qualified IPO within a
pre-agreed
period of time from the date of the Company’s investment. Therefore, the convertible and redeemable preferred shares that the Company subscribed from iSNOB are not in substance common stocks and are classified as an
debt investment and is measured at its fair value with the changes in fair value booked in other comprehensive income.
As of March 31, 2020, the Company remeasured the investment at a fair value of RMB76,841, which were determined by management with the assistance of an independent appraisal. For the year ended March 31, 2019 and 2020, the unrealized securities holding gain net of tax of RMB15,670 and RMB36,459 were reported in other comprehensive income, respectively. For the year ended March 31, 2019 and 2020, foreign currency translation gains of RMB1,470 and RMB2,004 were reported as foreign currency translation adjustments in other comprehensive income, respectively.
In October 2020, the Company entered into a share repurchase agreement with iSNOB, pursuant to which, iSNOB repurchased 73.4% of the Company’s investment at a total price of approximately US$16,000 (equivalent to RMB104,399). After this transaction, the Company still held 4,785,714 convertible and redeemable preferred shares of iSNOB, accounting for 3.35% of the total equity interests of iSNOB on a fully diluted basis. The Company recognized a “Gain from investments, net” of RMB91,184 at the excess of the total cash consideration over the cost base of the preferred shares sold of RMB13,215 in the Consolidated Statements of Operations and Comprehensive loss. The gain also included the recycled accumulated unrealized gains of RMB46,029 for the preferred shares sold that were previously recorded in other comprehensive income in equity.
As of March 31, 2021, the Company remeasured its remaining investment in iSNOB at a fair value of RMB22,595, which was determined by management with the assistance of an independent appraiser. For the year ended March 31, 2021, the unrealized securities holding gain net of tax of RMB8,714 was reported in other comprehensive income. For the year ended March 31, 2021, foreign currency translation loss of RMB3,717 was reported as foreign currency translation adjustments in other comprehensive income.
In July 2019, the Group purchased
18.1
% shareholding of Ruisha Technology with a cash consideration of RMB
7,000
and an intangible asset with a fair value of RMB
50
. According to the investment agreement, the Group has the option to request Ruisha Technology to redeem the Group’s investments at the Group’s investment cost plus the interest until the occurrence of a redemption event, which is outside the control of Ruisha. The redeemable shares of Ruisha Technology held by the Group are therefore considered not in substance common stock and classified as an
debt investment and is measured at its fair value with the changes in fair value booked in other comprehensive income. As of March 31, 2020 and 2021, the Group remeasured the investment at a fair value of RMB
7,623
and RMB
19,065
, respectively, which were determined by management with the assistance of an independent appraisal. For the years ended March 31, 2020 and 2021, the unrealized securities holding gain, net of tax of RMB
487
and RMB
9,726
were reported in other comprehensive income, respectively.
In January 2018, the Company purchased
20
% shareholding of Huzan with a cash consideration of RMB
10,000
. According to the investment agreement, the Company has the option to request Huzan to redeem the Company’s investments at the Company’s investment cost plus the interest if Huzan fails to consummate a qualified IPO within a
pre-agreed
period of time from the date of the Company’s investment, the redeemable shares of Huzan held by the Company are therefore considered not in substance common stock and classified as an
debt investment and is measured at its fair value with the changes in fair value booked in other comprehensive income.