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美国

证券交易委员会

华盛顿特区，20549

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形式 20-F

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(标记一)

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或

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或

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或

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委托文件编号：001-34862

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方控股有限公司

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(注册人的确切姓名载于其章程)

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不适用

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(注册人姓名英文译本)

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开曼群岛

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(注册成立或组织的司法管辖权)

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A座20号 郭公庄中街

丰台区, 北京 100070

中华人民共和国

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（主要行政办公室地址）

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戴建军，执行主席

A座20号 郭公庄中街

丰台区, 北京 100070

中华人民共和国

电话：+86-10-5631 8000

传真：+86-10-5631 8010

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(公司联系人姓名、电话、电子邮件和/或传真号码及地址)

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根据该法第12(B)节登记或将登记的证券：

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没有一

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根据该法第12(G)条登记或将登记的证券：

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根据该法第15(D)节负有报告义务的证券：

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注明截至年度报告所述期间结束时发行人所属各类资本或普通股的流通股数量：

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如果注册人是《证券法》第405条定义的知名经验丰富的发行人，则通过勾选标记进行验证

☐是☒ 不是

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如果本报告是年度报告或过渡报告，请勾选标记表明注册人是否无需根据1934年证券交易法第13或15（d）条提交报告

☐ 是的 ☒ 不是

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通过勾选标记标明注册人是否（1）在过去12个月内（或在注册人被要求提交此类报告的较短期限内）提交了1934年证券交易法第13或15（d）条要求提交的所有报告，并且（2）在过去90天内是否已遵守此类提交要求。

☐ 是 ☒ 不是

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通过勾选标记检查注册人是否已在过去12个月内（或在注册人被要求提交此类文件的较短期限内）以电子方式提交了根据S-t法规第405条（本章第229.405条）要求提交的所有交互数据文件。

☐ 是 ☒ 没有

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通过勾选标记来确定注册者是大型加速文件夹、加速文件夹还是非加速文件夹。请参阅《交易法》第120亿.2条规则中“大型加速备案人”、“加速备案人”和“新兴成长公司”的定义。

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如果一家新兴成长型公司根据美国公认会计原则编制财务报表，请通过勾选标记表明注册人是否选择不利用延长的过渡期来遵守根据《交易法》第13（a）条提供的任何新的或修订的财务会计准则。 ☐

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†“新的或修订的财务会计准则”是指财务会计准则委员会在2012年4月5日之后发布的对其会计准则编纂的任何更新。

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通过勾选标记检查注册人是否已提交报告并证明其管理层根据《萨班斯-奥克斯利法案》（15 U.S.C.）第404（b）条对其财务报告内部控制有效性的评估7262（b））由编制或发布审计报告的注册会计师事务所执行。 ☐

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如果证券是根据该法第12(B)条登记的，应用复选标记表示登记人的财务报表是否反映了对以前发布的财务报表的错误更正。☐

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通过勾选标记来验证这些错误更正是否是需要根据§240.10D-1（b）对注册人的任何高管在相关恢复期内收到的基于激励的补偿进行恢复分析的重述。 ☐

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用复选标记表示注册人在编制本文件所包括的财务报表时使用了哪种会计基础：

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如果在回答前一个问题时勾选了“其他”，请用复选标记表示登记人选择遵循哪个财务报表项目：

☐ 项目17 ☐ 项目18

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如果这是一份年度报告，请用复选标记标明注册人是否为空壳公司(如《交易法》第12B-2条所定义)。

☐ 是的 ☒不是

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(只适用于过去五年涉及破产程序的发行人)

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在根据法院确认的计划分配证券后，用复选标记表示注册人是否已提交1934年《证券交易法》第12、13或15(D)条要求提交的所有文件和报告。

☐ 是的 ☐不是

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目录

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引言

除文意另有所指外，并仅为本年度报告表格20-F的目的：

本年度报告包括截至2020年、2021年和2022年12月止年度的经审计综合收益（亏损）表、截至2020年、2021年和2022年12月31日的经审计综合资产负债表、截至2020年止年度的经审计综合股东权益表和经审计综合现金流量表，2021年和2022年。

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前瞻性陈述

本年度报告包含涉及风险和不确定因素的前瞻性陈述。除历史事实以外的所有陈述均为前瞻性陈述。这些前瞻性陈述是根据“1995年美国私人证券诉讼改革法”的“安全港”条款作出的。这些表述涉及已知和未知的风险、不确定性和其他因素，可能导致我们的实际结果、业绩或成就与前瞻性表述中明示或暗示的大不相同。

您可以通过“可能”、“将会”、“预期”、“预计将”、“预期”、“目标”、“估计”、“打算”、“计划”、“相信”、“很可能”或其他类似的表达方式来识别这些前瞻性陈述。我们的这些前瞻性陈述主要基于我们目前对未来事件和财务趋势的预期和预测，我们认为这些事件和财务趋势可能会影响我们的财务状况、经营结果、业务战略和财务需求。这些前瞻性陈述包括但不限于：

你应该仔细阅读这份年度报告和我们在这份年度报告中提到的文件，并理解我们未来的实际结果可能与我们预期的大不相同，甚至更糟。我们通过这些警告性声明来限定我们所有的前瞻性声明。本年度报告的其他部分，包括题为“风险因素”的部分，包括可能对我们的业务和财务业绩产生不利影响的其他因素。此外，我们在一个不断发展的环境中运营。新的风险因素和不确定因素不时出现，我们的管理层无法预测所有风险因素和不确定因素，也无法评估所有因素对我们业务的影响，或任何因素或因素组合可能导致实际结果与任何前瞻性陈述中包含的结果大不相同的程度。

你不应该依赖前瞻性陈述作为对未来事件的预测。除非法律要求，我们没有义务更新或修改任何前瞻性陈述，无论是由于新信息、未来事件或其他原因。

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市场和行业数据

本年度报告中使用的市场数据和某些行业预测来自内部调查、市场研究、公开信息和行业出版物。行业出版物通常指出，其中包含的信息是从据信可靠的来源获得的，但不保证此类信息的准确性和完整性。同样，内部调查、行业预测和市场研究虽然被认为是可靠的，但尚未经过独立验证，我们也不对此类信息的准确性做出任何声明。

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第I部分

项目1.董事、高级管理人员和顾问的身份

不适用。

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第二项：报价统计和预期时间表

不适用。

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第三项：关键信息

我们的控股公司结构和与可变利益实体的合同安排

房天下不是一家中国运营公司，而是一家开曼群岛控股公司，在可变利益实体中没有股权。本公司主要透过我们在中国的全资附属公司及中国的可变权益实体(包括可变权益实体及其附属公司)进行业务。中国法律法规对互联网行业的外商投资施加了限制和条件，广告行业的行政实践存在不确定性。因此，吾等透过可变权益实体经营所有业务，并依赖我们的中国附属公司、可变权益实体及其股东之间的合约安排进行可变权益实体的业务运作。2020年、2021年和2022年，可变利息实体贡献的收入分别占我们总收入的68.3%、66.5%和66.1%。在本年报中使用的“我们”、“我们”、“我们的公司”和“我们的”是指房天下及其子公司。方的美国存托凭证持有人持有我们开曼群岛控股公司房天下的股权；通过投资于方的美国存托凭证，他们不会，也可能永远不会在中国的可变权益实体中拥有直接或间接权益。可变权益实体为在中国开展业务的中国公司，其财务业绩已根据美国公认会计原则综合纳入我们的综合财务报表，以供会计之用。方是一家控股公司，没有自己的业务。我们在可变权益实体中没有任何股权。

一系列合同协议，包括独家技术咨询和服务协议、股权质押协议、经营协议、股东委托书协议、贷款协议和独家看涨期权协议(统称为“结构合同”)。见“项目7.b.大股东及关联方交易-关联方交易-结构合同“是本年度报告的一部分。由于该等合约安排，吾等行使控制合并受控实体的能力，透过我们的权力指示合并受控实体的活动对其经济表现有最重大影响，并有义务承担合并受控实体的损失或享有可能对该等实体有重大潜在影响的所有剩余利益。因此，我们将它们的结果合并到我们的财务报表中。根据美国公认会计原则进行会计处理。方及其投资者概无于该等可变权益实体拥有股权、外国直接投资或透过该等所有权或投资控制该等可变权益实体，而该等合约安排并不等同于拥有该等可变权益实体的业务的股权。关于这些合同安排的更多细节，见“项目4.关于C公司的信息。组织结构。

然而，在为我们提供对可变利益实体的控制权方面，合同安排可能不如直接所有权有效，而且我们可能会产生执行安排条款的巨额成本。此外，这些协议还没有在中国法院接受过考验。见“项目3.关键信息--D。风险因素-与我们的公司结构相关的风险-我们依赖与北京拓天宇网络技术有限公司(以下简称北京拓时)和天津嘉天夏网络技术有限公司(以下简称加天夏网络科技)、我们的全资中国子公司、它们的受控可变利益实体及其各自的股东的合同安排来进行我们的运营，这在提供运营控制方面可能不如直接所有权有效“和”-我们合并的受控实体的股东可能与我们存在潜在的利益冲突，如果任何此类利益冲突没有以有利于我们的方式得到解决，我们的业务可能会受到实质性和不利的影响。

开曼群岛控股公司Fang与可变权益实体及其股东的合约安排有关其权利地位的现行及未来中国法律、法规及规则的诠释及应用亦存在重大不确定性。目前尚不确定是否会通过与可变利益实体结构有关的任何新的中国法律或法规，或者如果通过，它们将提供什么。如果我们或任何可变利益实体被发现违反任何现有或未来的中国法律或法规，或未能获得或维持任何所需的许可或批准，中国监管当局将有广泛的酌情权采取行动处理该等违规或失败行为。见“项目3.关键信息--D。风险因素-与我们的公司结构相关的风险-如果中国政府确定为我们的业务运营建立结构的结构合同不符合适用的中国法律、规则和法规，我们可能会受到严厉的处罚或被迫重组我们的所有权结构。和“项目3.关键信息--D。风险因素--与在中国做生意有关的风险--与我们目前的公司结构、公司治理和业务运营有关的新的或修订的中国法律的采纳存在很大的不确定性。“

我们的公司结构受到与可变利益实体的合同安排相关的风险的影响。如果中国政府认为我们与可变权益实体的合同安排不符合中国对相关行业外国投资的监管限制，或者如果这些法规或现有法规的解释在未来发生变化或被不同解释，我们可能会受到严厉的惩罚或被迫放弃我们在该等业务中的权益。方圆、其中国附属公司及可变权益实体及方方的投资者面对中国政府未来可能采取的行动的不确定性，该等行动可能会影响与可变权益实体的合约安排的可执行性，从而对可变权益实体及本公司整体的财务表现造成重大影响。中国监管当局可能不允许VIE结构，这可能会导致我们的业务发生重大变化，并导致我们的证券价值大幅下降或变得一文不值。有关与我们公司结构相关的风险的详细说明，请参阅“项目3.主要信息-D”项下披露的所有风险。风险因素--与我们的公司结构相关的风险。

我们面临着与在中国做生意相关的各种风险和不确定性。我们的业务运营主要在中国进行，我们受到复杂和不断变化的中国法律法规的约束。例如，我们面临与离岸发行的监管审批、反垄断监管行动以及对网络安全和数据隐私的监督相关的风险，以及中国政府与使用可变利益实体有关的监管和声明，这些风险可能会影响我们开展某些业务、接受外国投资或在美国或其他外汇上市的能力。这些风险可能导致我们的业务和我们的美国存托凭证的价值发生重大不利变化，显著限制或完全阻碍我们向投资者提供或继续提供证券的能力，或导致此类证券的价值大幅缩水或变得一文不值。有关在中国经商的风险的详细描述，请参阅“3.D.关键信息-风险因素-在中国经商相关风险”项下披露的风险。

中国政府在监管我们的业务方面的巨大权力，以及它对中国发行人进行的海外发行和外国投资的监督和控制，可能会显著限制或完全阻碍我们向投资者提供或继续提供证券的能力。实施全行业的法规，包括数据安全或反垄断相关法规，在这种性质下可能会导致此类证券的价值大幅下降。更多细节见“项目3.关键信息--D。风险因素-与在中国做生意相关的风险-中国政府对我们业务运营的重大监督可能导致我们的业务和我们美国存托凭证的价值发生重大不利变化。“

中国的法律制度产生的风险和不确定性，包括与法律执行和中国快速发展的规章制度有关的风险和不确定性，可能会导致我们的业务和美国存托凭证的价值发生重大不利变化。更多细节见“项目3.关键信息--D。风险因素-与在中国做生意有关的风险-与中国法律制度有关的不确定因素可能对我们产生不利影响“，以及”-与我们目前的公司结构、公司治理和业务运营有关的新的或修订的中国法律的解释和实施存在重大不确定性“。

我们的运营需要获得中国当局的许可

我们主要通过我们的子公司和中国的可变利益实体开展业务。我们在中国的业务受中国法律法规管辖。我们需要从各个监管部门获得适用的许可证或批准，才能提供广告和增值服务和产品。这些许可证或批准对我们的业务运营是必不可少的，通常要接受相关中国政府部门的年度审查。于本年报日期，北京搜房科技发展有限公司(“北京科技”)及北京世纪佳天霞科技发展有限公司(“北京金通科技”)均持有适用中国法律、规则及法规所规定的互联网内容提供商牌照，而北京科技及北京金通科技均持有根据适用中国法律、规则及法规所规定的经营电子公告板服务的批准。允许北京佳天侠广告有限公司(“北京广告”)、上海世纪佳天侠互联网科技发展有限公司(“上海世纪佳天下网络”)及若干其他合并受控实体按照各自营业执照上注明的经营范围提供营销服务。

根据国家广播电视总局发布的有关规定，从事互联网广播活动的公司必须获得国家广播电视总局颁发的互联网音像节目传输许可证，并按照许可证规定的范围经营。我们的一些合并受控实体提供某些互联网直播服务。已取得网络文化产品展览比赛互联网文化经营许可证、艺术文化、娱乐、科技、财经、体育、教育等专业视听节目制作互联网视听节目服务互联网视听节目传输许可证(不含采访)、一般社会组织文化活动、体育赛事等组织活动的广播服务、直播服务、广播电视节目制作经营许可证。然而，由于现有和未来法律法规的解释和实施存在不确定性，我们持有的许可证可能会被政府部门视为不足，如果我们的行为被认为违反了相关法律法规，可能会受到相关监管机构的罚款或其他监管行动。

但是，我们可能需要获得额外的许可证。具体情况请参看《第三项关键信息--D.风险因素--与本业务相关的风险--在中国互联网业务和网络广告业务复杂的监管环境下，本公司未能取得或保持适用的许可证和审批，或未通过政府年检或未获得营业执照的续展，将对本公司的业务、财务状况和经营业绩造成重大不利影响。

此外，中国政府已表示有意对在海外和/或外国投资中国的发行人进行的发行施加更多监督和控制。就吾等过往向境外投资者发行证券而言，根据中国现行法律、法规及规则，截至本年度报告日期，吾等、吾等中国附属公司及可变权益实体(I)尚未获中国证监会或中国证监会批准或完成向证监会备案，(Ii)尚未获中国证监会或中国证监会要求接受网络安全审查，及(Iii)尚未获得或尚未被证监会或中国证监会拒绝该等必要许可。根据我们中国法律顾问的建议，我们不认为我们需要就我们之前的证券发行接受CAC的网络安全审查。

2023年2月17日，证监会发布了《境内公司境外证券发行上市试行管理办法》或《境外上市试行办法》及五份配套指引，并于2023年3月31日起施行。根据《境外上市试行办法》，境外上市公司应当在后续在同一市场完成证券发行后三个工作日内向中国证监会备案，境外上市公司应当在申请异地发行上市后三个工作日内向中国证监会备案。境外上市公司通过一次或多次收购、换股、股份转让等方式收购中国境内资产，构成中国境内资产直接或间接上市的，还须向中国证监会备案。此外，境外上市公司发生下列重大事项并予以公告后，应当在三个营业日内向中国证监会报告：(一)上市公司控制权变更；(二)境外证券监督管理机构或主管机关对上市公司采取的调查、处分或其他措施；(三)变更上市地位或转移上市分部；(四)上市公司自愿或强制退市。上市公司境外发行上市后，其主营业务发生重大变化，不再需要向中国证监会备案的，应当在事发后三个工作日内向中国证监会报送境内律师事务所出具的具体报告和法律意见书。同日，证监会还召开境外上市试行办法发布新闻发布会，发布《关于境内企业境外发行上市备案管理的通知》等明确，境外上市试行办法生效日(即2023年3月31日)及之前已在境外上市的境内公司，视为现有发行人。现有发行人无需完成填报手续，涉及再融资等后续事项时，需向证监会备案。

根据《关于境内公司境外发行上市备案管理的通知》，吾等的中国律师景天律师事务所告知吾等，根据现行有效的中国法律法规，吾等无需获得中国证监会的许可或完成向中国证监会的备案。然而，由于境外上市试行办法较新，《关于境内公司境外发行上市备案管理的通知》对现有发行人的申报义务没有明确的指引或解释，我们不能保证近期退市安排是否需要向中国证监会办理申报手续。

如果(I)我们没有收到或维持任何许可、批准或完成任何报告义务，(Ii)我们无意中得出结论认为某些许可、批准已经获得或不需要，或者某些报告义务已经完成或不需要，或者(Iii)适用的法律、法规或解释发生变化，并且我们将来需要额外的许可、批准或报告义务，我们无法向您保证，我们将能够及时获得该等许可或批准或完成该报告义务，或者根本不能，即使获得了该批准，该批准也可能被撤销。任何此类情况都可能使我们受到处罚，包括罚款、暂停营业和吊销所需的执照，这可能会对我们的业务、财务状况和经营业绩产生实质性的不利影响。

更详细的信息见“项目3.关键信息--D。风险因素-与我们业务相关的风险-如果我们在中国复杂的互联网业务和网络广告业务监管环境下未能获得或保持适用的许可证和审批，或未能通过政府年度检查或获得营业执照的续展，我们的业务、财务状况和经营业绩将受到实质性和不利的影响“和”第三项。风险因素-与在中国做生意相关的风险-根据中国法律，我们的离岸发行可能需要获得中国证监会或其他中国政府机构的批准和/或报告和备案，如果需要，我们无法预测我们能否或在多长时间内能够获得批准或完成此类备案和报告义务。

《追究外国公司责任法案》

根据《外国公司问责法》，如果美国证券交易委员会确定我们提交的审计报告是由连续两年没有接受PCAOB检查的注册会计师事务所出具的，美国证券交易委员会将禁止我们的股票或美国存托凭证在美国场外交易市场交易。自截至2019年12月31日的财政年度起，我们已委任GGF CPA Limited或GGF负责综合财务报表的审计。作为在PCAOB(PCAOB ID：2729)注册的事务所，我们目前的审计师GGF CPA Ltd是一家独立注册会计师事务所，负责发布本Form 20-F年度报告中包含的审计报告。根据该法律，PCAOB将定期进行检查，以评估其是否符合适用的专业标准。GGF的审计报告包含在本报告中，总部位于广州，中国，截至本年度报告日期，GGF未被列入PCAOB确定报告中确定的公司名单。最近的事态发展给PCAOB继续对我们的独立会计师事务所GGF进行检查的能力带来了不确定性。我们的前任审计师在2018至2019财年与我们在中国的业务有关的工作没有受到PCAOB的检查。不能保证我们目前的审计师或我们聘请的任何未来审计师在我们的整个聘用期间都会接受PCAOB的全面检查，这可能会影响我们在美国继续交易的能力。相关的风险和不确定性可能导致美国存托凭证的价值大幅下降。虽然我们相信HFCAA和相关法规目前不会影响我们，但我们不能向您保证，不会对HFCAA或相关法规进行任何进一步的实施和解释，这可能会在未来对我们构成监管风险和施加限制。更多细节见“项目3.关键信息--D。风险因素-与在中国做生意相关的风险-尽管我们的独立注册会计师事务所在PCAOB注册，目前正在接受PCAOB的定期检查，但如果后来确定PCAOB无法全面检查或调查我们的审计师，投资者将被剥夺此类检查的好处，我们的美国存托凭证可能被禁止交易。

现金和资产在我们组织中的流动

房天下是一家控股公司，没有自己的业务。我们在中国的业务主要透过我们的附属公司及于中国的可变权益实体进行。因此，尽管我们有其他途径获得控股公司层面的融资，但房天下向股东支付股息和偿还其可能产生的任何债务的能力可能取决于我们中国子公司支付的股息以及我们中国合并可变权益实体支付的许可费和服务费。如果我们的任何子公司未来为自己产生债务，管理此类债务的工具可能会限制其向房天下支付股息的能力。此外，我们的中国子公司只能从根据中国会计准则和法规确定的留存收益(如果有)中向房天下支付股息。此外，我们的中国附属公司及综合可变权益实体须向若干法定储备基金拨款或可向若干酌情基金拨款，除非公司出现有偿付能力的清盘情况，否则不得作为现金股息分配。

根据中国法律及法规，我们的中国附属公司及可变权益实体在向吾等派发股息或以其他方式转移其任何净资产方面须受若干限制。外商独资企业从中国汇出的股息，也要经过国家外汇管理局指定的银行审核。受限制的金额包括吾等中国附属公司的实收资本及法定储备金，以及吾等并无法定拥有权的可变利息实体的净资产，于2020年、2021年及2022年12月31日分别为710美元万、730美元万及660美元万。此外，我们中国附属公司及可变权益实体向中国以外实体的现金转移须受中国政府货币兑换管制。因此，由于中国政府干预或对我们的控股公司、我们的子公司或中国的可变权益实体的货币兑换能力施加限制和限制，我们中国子公司或中国的可变权益实体的资金可能无法用于中国以外的资金运营或其他用途，例如向美国投资者支付股息。关于与我们在中国业务的资金流有关的风险，请参阅“项目3.关键信息-D。风险因素-与在中国经商有关的风险-我们主要依赖子公司支付的股息和其他股权分配，而对子公司向我们付款能力的任何限制都可能对我们开展业务的能力以及我们的流动性产生实质性的不利影响，“3.D.关键信息-风险因素-与在中国经商有关的风险-政府对货币兑换的控制可能会限制我们有效利用收入的能力。项目3.D.关键信息-风险因素-与在中国做生意有关的风险-我们可能因某些历史上的集团内融资交易而受到罚款和法律或行政处罚。

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从2020年到2022年，我们的某些内地中国子公司向我们的香港子公司转移了总计50400美元的万现金。这些资金的分配如下：(I)29100美元万用于偿还特定银行贷款；(Ii)8,800美元万用于偿还可转换优先票据；以及(Iii)剩余金额用于支持海外运营需要。

根据中国法律，房天下只能通过出资或贷款向我们的中国子公司提供资金，并且只能通过贷款向可变利益实体提供资金，但必须满足适用的政府注册和批准要求。于截至2020年、2021年及2022年12月31日止年度内，房天下并无向我们的中间控股公司、附属公司及可变利息实体提供任何贷款或出资。此外，房天下向我们中国子公司和可变权益实体的现金转移受中国政府货币兑换管制。因此，房天下持有的资金可能无法为我们的中国子公司或中国的可变权益实体的运营提供资金。见“项目3.关键信息-风险因素-与在中国做生意有关的风险-中华人民共和国关于境外控股公司向中国实体提供贷款的规定可能会影响我们利用资本或其他方式资助我们在中国的业务的能力”。

房天下目前没有计划在可预见的未来向我们的普通股支付任何现金股息。我们目前打算保留大部分(如果不是全部)可用资金和未来的任何收益，以运营和扩大我们的业务。见“项目8.财务信息--A。合并报表和其他财务信息--股利政策。“有关在我们的美国存托凭证中投资的中国和美国联邦所得税的考虑因素，请参阅“第10项。其他信息-E。税制。“

A.选定的财务数据

我们的精选综合全面收益(亏损)表数据(美国存托股份信息除外)以及截至2020年、2020年、2021年和2022年12月31日的精选综合资产负债表数据以及截至2020年12月31日、2021年和2022年的精选综合资产负债表数据均来自本年度报告中包含的经审计的综合财务报表。

您应结合我们的审计合并财务报表和相关附注阅读以下信息和“第5项。本年度报告中的运营和财务回顾与展望”。下面列出的我们的历史经营业绩并不一定表明未来任何财政期间的预期业绩。

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与可变利益实体相关的财务信息

下表列出了截至所列日期可变利益实体和其他实体的简明综合财务状况表。

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已选择 简明 合并利润表信息

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B.资本化和负债

不适用。

C.提出和使用收益的理由

不适用。

D.风险因素

风险因素摘要

对我们的美国存托凭证或普通股的投资涉及重大风险。以下是我们面临的重大风险总结，按相关标题组织。这些风险在第3项中得到了更全面的讨论。关键信息-D。危险因素

与我们的业务相关的风险

与我们的公司结构相关的风险

在中国做生意的相关风险

与我们的美国存托凭证、普通股和票据相关的风险

投资我们的美国存托凭证或票据涉及风险。在作出投资决定前，您应仔细考虑以下所述的风险，以及本年报所包括或以参考方式并入的其他资料。任何这些风险都可能对我们的业务、财务状况或经营结果产生重大不利影响。由于上述任何一种风险，我们的美国存托凭证或票据的市场或交易价格可能会下跌，您可能会损失全部或部分投资。此外，下文讨论的风险还包括前瞻性陈述，我们的实际结果可能与这些前瞻性陈述中讨论的结果大不相同。您还应阅读本年度报告标题为“前瞻性陈述”的部分。请注意，我们目前不知道的、我们目前认为无关紧要的或我们没有预料到的额外风险也可能损害我们的业务和运营。

与我们的业务相关的风险

我们未来可能会继续亏损，可能无法恢复盈利，这可能会导致我们的美国存托凭证的市场价格下降。

我们在2020、2021、2022年发生了870美元的万、1,960美元的万和7,560美元的万净亏损，这主要是由于我们收入的减少和证券公允价值变化的综合影响。我们未来实现盈利的能力取决于我们控制成本的能力，取决于我们提供产品和服务以满足市场需求和吸引新客户的能力，取决于我们产品和服务的竞争力，以及中国房地产市场的监管环境。由于与我们的业务发展和监管环境相关的众多风险和不确定性，我们不能保证我们可能在短期或长期内恢复盈利，这可能会导致我们的美国存托凭证的市场价格下降。

我们的业务可能会受到中国房地产行业波动和政府措施的实质性不利影响。

我们的房地产服务业务主要在中国进行，我们的业务在很大程度上取决于中国房地产市场的状况。特别是，我们的新房业务在2020年、2021年和2022年分别占我们总收入的66.9%、63.2%和61.4%，这取决于全国房地产相关行业和中国特定地区的增长。中国对私人住宅物业需求的增长，往往伴随着市况的波动和楼价的波动。中国房地产市场供需波动是由经济、社会、政治等多方面因素造成的。如果房地产市场的波动对房地产和家居相关产品和服务以及房地产和家居相关广告和融资的需求产生不利影响，对我们产品和服务的需求以及我们的增长和盈利水平可能会大幅下降。

中国的房地产市场通常会受到政府政策变化的影响，影响房地产和金融市场及相关领域。过去，中国政府采取了各种行政措施来遏制其认为不可持续的房地产市场增长，特别是在中国的房地产市场经历了房屋销售和价格快速而显著的增长的情况下。例如，2013年2月，国务院宣布了一些计划，以应对自2012年末以来某些城市房价的快速上涨，包括提高房价快速上涨城市的二套房购房者的最低首付和贷款利率，以及对现房销售征收20%的资本利得税。部分由于这些政策，中国的房地产市场在2014年经历了放缓，房地产开发出现下滑。2015年3月，中国政府发布了一项新政策，降低首付要求，并免除某些房主在拥有房产两年后出售的销售税。从2016年9月开始，北京和上海等一些城市再次提高了首付要求，并收紧了往往有资格获得放松规定的首套房购房者的决心。有关政府部门最近也颁布了立法，禁止向购房者提供首付融资，并在某些城市停止发放或续签房地产经纪人许可证。从2017年3月开始，北京、广州等部分城市进一步提高了二套房购房者的最低首付比例。2019年4月，中央国家机关住房公积金管理中心印发《关于调整住房公积金个人住房贷款政策进一步提升服务有关事项的通知》，调整了首付比例。根据通知，贷款申请人购买的第一套住房不是经济适用房的，首付款不得低于购买总价的30%。通知还调整了二套房贷款最高限额。首套购房贷款最高限额为120元万，适用贷款基准利率；二套房贷款最高限额为60万元，贷款利率为同期贷款基准利率的1.1倍。2020年8月，交通部会同中国人民银行制定了针对房地产企业的“三条红线”政策，意在控制中国主要房地产商的有息债务规模，促进中国房地产行业的可持续发展。三条红线政策是指：(一)房地产公司的杠杆率(不含预收款)不得超过70%；(二)房地产公司的净杠杆率不得超过100%；(三)现金与短期计息贷款的比率不得低于1.0。2020年12月28日，中国人民银行会同中国银保监会(银保监会)发布了《关于建立金融机构房地产贷款集中管理制度的通知》(《联合通知》)，自2021年1月1日起施行，以加强房地产行业的金融监管。联合通知要求，房地产贷款比例和个人住房贷款比例不得超过中国人民银行和银监会确定的房地产贷款比例上限或个人住房贷款比例上限，开发银行和政策性银行应通过必要的修改来落实这些要求。银行业金融机构房地产贷款集中度超过管理要求的，应当有调整计划，在业务调整过渡期内逐步达到管理要求。《联合通知》没有提高个人住房贷款利率，但限制了各商业银行个人住房贷款的比例，这是中国政府为抑制房地产市场，促进房地产市场平稳健康发展而采取的调控措施。2021年3月26日，银监会、财政部、中国人民银行联合发布了《关于防止商业贷款违规流入房地产市场的通知》，要求银监会、财政部、中国人民银行加强对商业贷款违规流入房地产市场的监督检查，健全违规投诉机制，及时分享和联合调查此类违规行为的线索。有关部门还应将企业贷款违规流入房地产市场等相关问题作为各项检查的重要内容，依法严格履行相关义务，加强联合惩戒，及时将企业和个人相关行政处罚信息纳入征信系统。2021年7月13日，财政部等七部门联合发布了《关于继续整顿和规范房地产市场秩序的通知》，禁止套利或协助套利商业贷款、消费贷款等非住房贷款用于购房。2021年10月23日，中国全国人民代表大会授权国务院在选定的地区启动为期五年的房产税改革试点，要求住宅和非住宅物业的所有者(不包括农村家庭)缴纳房产税。国务院有权决定房产税在哪里、如何实施和管理。

除了专门旨在控制中国房地产市场增长的政府政策外，我们的业务、财务状况和经营业绩也可能受到其他宏观经济和监管措施的负面影响。以下领域的任何未来政策都可能导致房屋销售和价格下降，这反过来可能会影响对我们服务的需求，并对我们的业务、财务状况和运营业绩产生负面影响：

我们的业务在很大程度上依赖于我们的营销服务收入，房地产和家居相关行业的参与者可能会选择其他广告媒体，而不是在线广告或其他在线广告商，这可能会导致我们的收入下降。

我们所有的营销服务收入都是通过我们的网站和移动应用程序产生的，我们预计我们收入的很大一部分将继续来自营销服务。2020年、2021年和2022年，营销服务分别占我们收入的43.9%、44.5%和46.2%，成为我们最大的收入来源。特别是，我们的新家业务分别在2020年、2021年和2022年贡献了我们几乎所有的营销服务收入。我们的新家业务主要是向住宅房地产开发商及其销售代理销售营销服务，他们正在推广新开发的物业出售。

虽然中国的网络营销行业一直在增长，但中国房地产行业的广告商通常依赖传统形式的广告媒体，如报纸、杂志和户外广告。如果我们无法留住和发展我们的广告客户基础，包括房地产开发商，我们的业务可能不会像我们预期的那样快速增长。此外，如果广告商不认为我们的营销服务有效或我们的用户结构不理想，他们可能不会继续与我们做生意。

我们继续创造和维持营销服务收入的能力取决于许多因素，其中许多因素是我们无法控制的，包括：

如果我们无法保持竞争力并为广告商提供价值，他们可能会停止向我们投放广告，这将对我们的业务、财务状况和运营业绩产生重大不利影响。

如果我们不能继续从我们的主要客户群，包括房地产开发商、代理商、经纪人和物业业主和经理那里获得上市，我们的业务、财务状况和经营业绩可能会受到重大和不利的影响。

我们很大一部分收入来自上市服务。2020年、2021年和2022年，上市服务收入分别约占我们总收入的22.0%、19.7%和16.3%。上市服务业务的成功取决于我们能否说服房地产开发商、房地产经纪人、经纪人、开发商以及物业所有者和经理在我们的网站和移动应用程序上列出他们的房产。我们相信，拥有来自这类房地产专业人士的大量高质量房源会吸引用户访问我们的网站和移动应用程序，从而增强我们对广告商和其他房地产市场参与者的吸引力。然而，我们几乎所有的上市协议都是非排他性的。我们的上市客户可能会停止使用我们的上市服务，并可能选择使用我们的一个或多个竞争对手的服务，或寻求其他上市方式，如房地产杂志或报纸。如果大量房地产清单的所有者，如大型开发商、大型经纪人或关键房地产市场的业主，选择不与我们续签现有协议，我们的网站和移动应用程序对用户的吸引力可能会降低。如果我们的网站和移动应用程序上的用户流量减少，广告商和其他房地产市场参与者可能会停止使用我们的服务或不愿为我们的服务付费。在这种情况下，我们的竞争地位可能会大大削弱，我们的业务、财务状况和经营业绩可能会受到重大不利影响。

我们未来的增长在一定程度上取决于我们在CIH分离后继续经营保留业务的能力。

2019年6月11日，我们通过将我们拥有的CIH的所有普通股分红给我们的股权持有人，完成了对我们全资子公司CIH的剥离，相关业务包括(1)某些信息和分析服务，最初作为我们增值服务的一部分运营，以及(2)某些市场服务，最初作为我们上市服务的一部分运营。在剥离联昌国际后，我们保留了经营房地产互联网门户网站的业务，主要专注于服务住宅物业行业，而联昌国际的战略重点是服务于中国的商业地产行业，使每家公司能够更有效地追求自己独特的经营重点和战略。见“项目7.b.大股东和关联方交易-关联方交易-与CIH分离有关的分离和分配相关协议。

我们能否继续增长保留的业务取决于我们有效管理和开发这些服务的能力。如果我们不能成功地向我们的员工保证我们在分离和分配后的前景，我们的员工可能会寻找其他工作，这可能会对我们的业务运营造成实质性的不利影响。如果我们不能留住我们的人才或在他们离开时替换他们，我们可能无法继续发展，这可能会导致我们的美国存托凭证价格下跌。

我们很大一部分收入来自中国的几个主要城市中心，特别是北京、上海、广州、深圳、重庆和武汉，由于我们的收入集中在这些主要城市地区，我们面临着市场风险。

我们很大一部分收入来自中国的几个主要城市中心，包括北京、上海、成都、重庆、武汉、广州、天津和深圳。2022年，我们从这八个城市中心创造了4,080美元的万收入，占我们总收入的50.7%。我们预计，这八个城市中心将继续成为我们所有收入类别中重要的地区收入来源。如果这些主要城市中心中的任何一个遭遇对房地产行业或在线广告产生负面影响的事件，如严重的经济低迷或收缩、自然灾害或由于政府不利政策或其他原因导致增长放缓，对我们服务的需求可能会大幅下降，我们的业务和收入增长前景可能会受到实质性和不利的影响。

我们可能无法成功地与当前或未来的竞争对手竞争，这可能会显著减少我们的市场份额，并对我们的业务、财务状况和运营结果产生实质性的不利影响。

我们在每一项主要业务活动中都面临着来自其他公司的竞争。特别是，中国的在线房地产互联网服务市场竞争日益激烈。例如，在线市场58同城收购了位于中国的在线房地产销售和租赁服务提供商安居客，这加剧了我们市场的竞争。建立基于互联网的企业的进入门槛很低，因此允许新进入者迅速涌现。由于中国的在线房地产互联网服务行业相对较新且不断发展，随着行业的成熟，我们现在或未来的竞争对手可能能够更好地定位自己来竞争。我们还面临来自其他媒体公司的竞争，这些公司提供在线广告、在线上市和类似服务。这些竞争对手中的任何一个都可能提供在性能、价格、范围、创造力或其他优势方面比我们提供的产品和服务具有显著优势的产品和服务。这些产品和服务可能比我们提供的服务获得更大的市场接受度，从而削弱我们的品牌。中国在线房地产互联网服务行业的竞争加剧，可能会使我们难以留住现有客户和吸引新客户，并可能导致我们的费用降低。此外，我们目前的竞争对手包括中国提供房地产互联网服务的主要门户网站，如新浪、58同城、科网和腾讯控股的房屋网。这些网站可能比我们拥有更多的知名品牌、更大的访问量和更广泛的互联网分销渠道。

此外，我们已经并可能继续面临来自专注于区域的网站和移动应用程序(提供区域房地产列表和本地化服务)以及其他新兴渠道(包括社交网络平台)的激烈竞争。我们目前或未来的任何竞争对手也可能从规模更大、历史悠久、资金雄厚的公司获得投资，或与之建立其他商业或战略关系，并获得比我们更多的财务、营销和内容许可和开发资源。此外，我们的一些竞争对手得到了地方政府的支持，这可能会使我们在与他们在当地市场竞争时处于劣势。我们不能向您保证，我们将能够成功地与我们目前或未来的竞争对手竞争。中国房地产互联网服务市场的任何竞争失败都将对我们的业务、财务状况和经营业绩产生实质性的不利影响。

如果不能保持和提高我们网站和移动应用的品牌知名度，可能会导致现有客户和合格人员的流失。

我们相信，保持和提升我们作为中国领先的房地产互联网公司的品牌名称是我们战略的关键部分。2014年7月，我们将主要网站的地址从Www.soufun.com 到 Www.fang.com。“方”在中文中的意思是“家”。在更改网址的同时，我们还推出了新的移动应用程序，品牌为“房天下”(房天下在中文中，这可以大致翻译为“世界的家园”在英文中)。2016年9月，我们将公司名称更名为房天下。我们相信，这个新的简化地址将使中国用户更容易记忆和访问，从而提高我们的品牌认知度。除了通过直销队伍推广我们的网站和品牌外，我们还打算继续寻求其他方式来提高品牌知名度，包括发布房地产研究报告、活动赞助、门户协作安排以及广告和营销活动。我们不能向您保证，我们的努力将成功地保持或提高我们的品牌知名度。如果我们的品牌提升战略不成功，或者如果其他品牌在我们运营的一个或多个城市的市场认知度超过我们的品牌，我们可能无法吸引或留住现有用户、客户或合格人员，这可能会大幅减少我们的收入和盈利能力。

第三方未经授权使用我们的知识产权，以及为保护我们的知识产权而产生的费用，可能会对我们的业务、财务状况、运营结果、声誉和竞争优势产生重大不利影响。

我们的版权、商标、商业秘密、域名和其他知识产权对我们的业务非常重要。未经授权使用这些知识产权，无论是我们拥有的还是授权给我们的，都可能对我们的业务、财务状况、运营结果、声誉和竞争优势产生重大不利影响。我们依靠知识产权法和与我们的关键员工以及我们的某些客户、合作者和其他人的合同安排来保护我们的知识产权。我们采取的保护知识产权的措施可能不够充分，而且监管未经授权使用我们的知识产权的行为既困难又昂贵。

此外，中国对互联网相关行业知识产权的有效性、可执行性和保护范围尚不确定，仍在不断演变，可能涉及重大风险。中国的法律和执法程序还不完善，对知识产权的保护程度不如美国和其他司法管辖区的法律和执法程序。此外，未来可能需要诉讼来执行我们的知识产权，这可能会导致大量成本和我们的资源被转移，并对我们的业务、财务状况和运营结果产生实质性的不利影响。如果我们不能充分保护我们拥有或使用的知识产权，我们可能会失去这些权利，我们的业务、增长前景和盈利能力可能会受到影响。

中国对互联网行业的监管，包括对互联网上发布的信息的审查，可能会对我们的业务产生实质性的不利影响。

中国制定了管理互联网接入和传播新闻、信息或其他内容的法律法规，以及通过互联网提供的产品和服务万亿。在过去，中国政府禁止通过互联网传播它认为违反适用的中国法律、规则和法规的信息。特别是，根据国务院颁布的规定，工信部、新闻出版广电总局(原国家新闻出版局)、文化部禁止互联网内容提供者和互联网出版商在互联网上发布或展示下列内容：(一)反对中华人民共和国宪法的基本原则；(二)危害国家安全、泄露国家秘密、颠覆国家政权、破坏国家统一；(三)散布谣言、扰乱社会秩序、扰乱社会稳定；(四)宣传淫秽、色情、赌博、暴力、谋杀、恐惧、煽动犯罪的；(五)侮辱、诽谤第三人或者侵犯第三人合法权利的。

如果我们通过我们合并的受控实体提供的任何互联网内容被中国政府视为违反任何此类内容限制，我们将无法继续提供此类内容，并可能受到惩罚，包括没收非法收入、罚款、暂停业务和吊销所需的许可证，这可能对我们的业务、财务状况和经营业绩产生重大不利影响。我们还可能对我们的客户或附属公司的任何非法行为或我们分发的被认为不适当的内容承担潜在的责任。可能很难确定可能导致对我们承担责任的内容类型，如果我们被发现负有责任，我们可能会被迫停止在中国运营我们的网站和移动应用程序。

如果我们在中国复杂的互联网业务和网络广告业务的监管环境下未能获得或保持适用的许可证和审批，或者未能通过政府年度检查或获得营业执照的续展，将对我们的业务、财务状况和经营业绩造成重大不利影响。

中国的互联网和在线广告行业仍处于相对早期的发展阶段，受到中国政府的高度监管。中国政府的各个监管机构，如国务院、工信部、国家工商总局、国家广播电视总局(或国家广播电视总局，前身为国家新闻出版广电总局或国家广电总局)和公安部，有权发布和实施有关互联网和广告业各个方面的法规。此外，可能会通过新的法律、规则和条例，或者可能发布对现有法律、规则和条例的新解释，以解决不时出现的问题。因此，在解释和实施适用于互联网和在线广告行业的任何现行和未来的中国法律、规则和法规方面存在重大不确定性。

我们需要从各个监管部门获得适用的许可证或批准，才能提供广告和增值服务和产品。这些许可证或批准对我们的业务运营是必不可少的，通常要接受相关中国政府部门的年度审查。例如，北京搜房科技发展有限公司(“北京科技”)和北京世纪佳天霞科技发展有限公司(“北京金通科技”)均持有适用中国法律、法规所要求的互联网内容提供商许可证；北京科技和北京金通科技均持有根据适用中国法律、法规及法规所要求的经营电子公告板服务的批准。允许北京广告、上海世纪JTX网络及若干其他合并受控实体按照各自营业执照所列的经营范围提供营销服务。

根据国家广播电视总局发布的有关规定，从事互联网广播活动的公司必须获得国家广播电视总局颁发的互联网音像节目传输许可证，并按照许可证规定的范围经营。我们的一些合并受控实体提供某些互联网直播服务。已取得网络文化产品展览比赛互联网文化经营许可证、艺术文化、娱乐、科技、财经、体育、教育等专业视听节目制作互联网视听节目服务互联网视听节目传输许可证(不含采访)、一般社会组织文化活动、体育赛事等组织活动的广播服务、直播服务、广播电视节目制作经营许可证。然而，由于现有和未来法律法规的解释和实施存在不确定性，我们持有的许可证可能会被政府部门视为不足，如果我们的行为被认为违反了相关法律法规，可能会受到相关监管机构的罚款或其他监管行动。

然而，我们的一些合并的受控实体可能需要获得额外的许可证。例如，由于我们的网站和移动应用程序包括在线住宅社区，允许访问者在我们的网站和移动应用程序上发布信息，包括视频、其他网站和移动应用程序或微博或在线论坛中的数据，以便与其他用户讨论，因此在我们的网站和移动应用程序上发布此类信息可能被视为提供互联网发布服务，因此需要获得互联网发布许可证。同样，如果我们或第三方发布可能被视为新闻信息的信息，在我们的网站和移动应用程序上发布此类信息可能被视为互联网新闻信息服务，因此需要互联网新闻信息许可证。像许多其他类似情况的企业经营者一样，我们一直在没有这种许可证的情况下经营我们的企业。

此外，在北京怡然居客申请该牌照期间，本公司若干附属公司持有的其他服务许可证(包括房地产服务许可证)已经到期，而本公司位于上海、南宁和天津的子公司持有的某些融资担保许可证已被注销或正在注销中。

根据适用的中国法律、规则和法规，未能获得和/或保持营业执照、互联网出版物许可证和/或互联网新闻信息服务许可证可能会使实体受到各种处罚，包括没收收入、对进行该等活动的实体的业务运营施加罚款和/或限制，或停止其运营。尽管我们的相关综合受控实体并未直接从互联网出版服务或互联网新闻信息服务获得任何收入，但我们不能向您保证中国监管当局不会施加任何此类处罚。我们合并后的受控实体的业务运作出现任何此类中断，都可能对我们的业务、财务状况和运营结果产生重大不利影响。

意外的网络中断或安全漏洞，包括黑客攻击或计算机病毒攻击，可能会导致服务延迟或中断，导致我们的网站和移动应用程序的使用和性能下降，并损害我们的声誉和品牌。

我们的业务在很大程度上依赖于中国互联网基础设施的性能和可靠性、我们服务提供商网络上带宽和服务器的持续可访问性以及我们技术平台的持续性能、可靠性和可用性。如果我们的计算机和硬件系统不能保持令人满意的性能、可靠性、安全性和可用性，可能会对我们的声誉以及我们吸引和维持客户和游客流量的能力造成重大损害。与我们的网络基础设施相关的主要风险包括：

计算机病毒和黑客攻击可能会导致延迟或其他服务中断，并可能导致我们的硬件、软件系统和数据库受到重大破坏、我们的业务活动中断(例如，我们的电子邮件和其他通信系统)、安全漏洞和机密或敏感信息的无意泄露、计算机病毒的无意传播以及通过使用拒绝服务或类似攻击访问我们的网站和移动应用程序。此外，计算机病毒的不经意传播可能会使我们面临重大的损失或诉讼风险，并可能承担责任。我们的所有服务器和路由器，包括备份服务器，目前都由北京的第三方服务提供商托管，我们网站和移动应用程序上的所有信息都会定期备份。在我们的备份之间发生的任何黑客攻击、安全漏洞或其他系统中断或故障都可能扰乱我们的业务，或导致我们丢失并无法恢复房地产列表、联系信息和其他重要客户信息等数据。

我们也没有为与我们的系统相关的损失提供保险，也没有业务中断保险。此外，我们的财产保险保单的低承保限额可能不足以补偿我们的所有损失，特别是可能发生的任何业务和声誉损失。为了改善我们的业绩并防止我们的服务中断，我们可能不得不进行大量投资，以部署额外的服务器，或者创建我们的网站和移动应用程序的一个或多个副本来反映我们的在线资源，这两种情况中的任何一种都可能增加我们的支出，减少我们的净收入。

与我们网站相关的安全漏洞可能会使我们面临潜在的责任并损害我们的声誉。

确保通过公共网络安全地传输机密信息对于维护客户和用户的信心至关重要。我们现有的安全措施可能不足以保护这些机密信息。此外，计算机和网络系统很容易受到计算机黑客的入侵。安全漏洞可能会使我们面临诉讼，并可能因未能保护机密客户信息而承担责任，并可能损害我们的声誉，降低我们吸引客户和用户的能力。任何未来的安全漏洞，如果有的话，可能会对我们的业务、财务状况和运营结果造成实质性的不利影响。

我们被要求遵守中华人民共和国和其他与隐私和网络安全相关的适用法律。不当使用或披露数据可能会对我们的业务和前景产生重大和不利的影响。

我们的业务生成并处理大量数据。我们面临着处理和保护大量数据的固有风险。特别是，我们面临着与我们平台上的交易和其他活动的数据有关的一些挑战，包括：

总的来说，我们预计数据安全和数据保护合规将受到国内和全球监管机构的更多关注和关注，并在未来吸引持续或更大的公众审查和关注，这可能会增加我们的合规成本，并使我们面临与数据安全和保护相关的更高风险和挑战。如果我们无法管理这些风险，我们可能会受到惩罚，包括罚款、暂停营业和吊销所需的许可证，我们的声誉和运营结果可能会受到实质性和不利的影响。

中国关于数据安全和数据保护的监管和执法制度正在演变，可能会有不同的解释或重大变化。此外，中国不同的监管机构，包括全国人民代表大会常务委员会、工业和信息化部或工信部、CAC、公安部和SAMR，都以不同的标准和应用执行了数据隐私和保护法律法规。见“项目4.关于公司的信息--b.业务概述--监管。以下是中国最近在这一领域的某些监管活动的例子：

数据安全

个人信息和隐私

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许多与数据有关的立法相对较新，其中的某些概念仍有待监管机构的解释。如果我们拥有的任何数据属于需要更严格审查的数据类别，我们可能需要采取更严格的措施来保护和管理这些数据。网络安全审查措施和网络数据安全管理条例仍不清楚这些要求是否适用于已经在美国上市的公司，如我们。在现阶段，我们无法预测这些措施和法规的影响，我们将密切监测和评估规则制定过程中的任何发展。如果随后的立法要求我们这样的发行者批准网络安全审查和其他具体行动，我们将面临不确定性，即我们是否能及时或根本完成这些额外程序，这可能会使我们受到政府的执法行动和调查、罚款、处罚、暂停我们的不合规运营或将我们的应用程序从应用程序商店中移除，并对我们的业务和运营结果产生实质性和不利影响。截至本年度报告之日，我们尚未参与CAC在此基础上对网络安全审查进行的任何正式调查。

一般而言，遵守现有的中国法律和法规，以及中国监管机构未来可能颁布的与数据安全和个人信息保护相关的额外法律和法规，可能会花费高昂并导致我们的额外费用，并使我们受到负面宣传，这可能会损害我们的声誉和业务运营。在实践中如何执行和解释这些法律和条例也存在不确定性。

此外，世界各地的监管当局已经通过或正在考虑一些关于数据保护的立法和监管建议。这些立法和监管建议如果被采纳，以及其不确定的解释和应用，除了可能被罚款外，还可能导致一项命令，要求我们改变我们的数据做法和政策，这可能会对我们的业务和运营结果产生不利影响。2018年5月25日生效的欧盟一般数据保护条例，包括对接收或处理欧洲经济区居民个人数据的公司的运营要求。这项规定确立了适用于个人数据处理的新要求，赋予个人新的数据保护权，并对严重违反数据的行为施加惩罚。根据这一条例，个人也有权获得金融或非金融损失的赔偿。虽然我们不在欧洲经济区开展任何业务，但如果欧洲经济区的居民访问我们的网站或我们的移动平台并输入受保护的信息，我们可能会受到此规定的约束。

我们业务的成功运营取决于中国互联网基础设施和电信网络的性能和可靠性。

我们的业务取决于中国的互联网基础设施的性能和可靠性。基本上所有的互联网接入都是通过国家控制的电信运营商在工信部的行政控制和监管监督下保持的。此外，中国的国家网络通过中国政府控制的国际网关连接到互联网。这些国际网关通常是国内用户连接互联网的唯一渠道。我们不能向你保证，中国将发展更复杂的互联网基础设施。如果中国的互联网基础设施出现中断、故障或其他问题，我们可能无法接入替代网络。此外，中国的互联网基础设施可能无法支持与互联网使用量持续增长相关的需求。

我们还依赖中国电信公司(“中国电信”)和中国联合网络通信集团有限公司(“中国联通”)主要通过本地电信线路和互联网数据中心来托管我们的服务器，为我们提供数据通信能力。如果中国电信和中国联通的固定电信网络出现中断、故障或其他问题，或者如果中国电信或中国联通无法提供此类服务，我们无法获得替代服务。任何计划外的服务中断都可能扰乱我们的运营，损害我们的声誉，并导致我们的收入下降。此外，我们无法控制中国电信和中国联通提供服务的成本。如果我们为电信和互联网服务支付的价格大幅上升，我们的毛利率可能会大幅下降。此外，如果互联网接入费或向互联网用户收取的其他费用增加，我们的用户流量可能会减少，这反过来可能会导致我们的收入下降。

You should not rely on our quarterly operating results as an indication of our future performance because our quarterly financial results are subject to fluctuations.

The real estate sector in China is characterized by seasonal fluctuations, which may cause our revenues to fluctuate significantly from quarter to quarter. The first quarter of each year generally contributes the smallest portion of our annual revenues due to reduced advertising and marketing activity of our customers in the PRC real estate industry during and around the Chinese Lunar New Year holiday, which generally occurs in January or February of each year. Furthermore, as we are substantially dependent on sales of listing and marketing, our quarterly revenues and results of operations are likely to be affected by:

As a result, you should not rely on our quarter-to-quarter comparisons of our results of operations as indicators of likely future performance.

Failure to continue to develop and expand our content, service offerings and features, and to develop or incorporate the technologies that support them, could jeopardize our competitive position.

As an Internet portal company, we participate in an industry characterized by rapidly changing technology and new products and services. To remain competitive, we must continue to develop and expand our content and service offerings. We must also continue to enhance and improve the user interface, functionality and features of our websites and mobile apps. These efforts may require us to develop internally, or to license, increasingly complex technologies. In addition, many of our competitors are continually introducing new Internet-related products, services and technologies, which will require us to update or modify our own technology to keep pace. Developing and integrating new products, services and technologies into our existing businesses could be expensive and time-consuming. Furthermore, such new features, functions and services may not achieve market acceptance or serve to enhance our brand loyalty. We may not succeed in incorporating new Internet technologies, or, in order to do so, we may incur substantial expenses. If we fail to develop and introduce or acquire new features, functions, services or technologies effectively and on a timely basis, we may not continue to attract new users and may be unable to retain our existing users, which could affect our marketability as a popular advertising and listing media. If we are not successful in incorporating new Internet technologies, our future profitability and revenue growth could be materially and adversely affected.

Our revenues and profitability could suffer if we are unable to successfully implement our growth strategies or manage our growth effectively.

We intend to prioritize our operations in major cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, and Wuhan. We also plan to expand into new sectors. We intend to improve our open platform business by introducing a number of cloud products empowered by our big data capabilities. However, some of our growth strategies relate to new services and technologies for which there are no established markets in China or relate to services, technologies, or new businesses in which we have limited or no experience. We do not have experience providing these services and may not select the right third parties to partner with or establish or maintain some business relationship with them at commercially reasonable terms. Moreover, due to the breadth and diversity of the PRC real estate market and the PRC microfinance market as well as other industries and sectors we plan to expand into, our business model may not be successful in new and untested markets as demand and preferences may vary significantly by region. As a result, we may not be able to leverage our experience to enter into businesses with respect to new products or services. We cannot assure you that we will be able to successfully grow our business in our existing cities. There can be no assurance that we will be able to deliver new services and technologies on a commercially viable basis or in a timely manner, or at all. If we are unable to successfully implement our growth strategies, our revenues and profitability may not grow as we expect, and our competitiveness may be materially and adversely affected.

Increases in the volume of our website traffic as a result of our expansion into new business could also strain the capacity of our existing computer systems, which could lead to slower response times or system failures. This would cause the number of real estate search inquiries, advertising impressions, other revenue producing offerings and our informational offerings to decline, any of which could significantly reduce our revenue growth and our brand loyalty. We may need to incur additional costs to upgrade our computer systems in order to accommodate increased demand if our systems cannot handle current or higher volumes of traffic. Mismanagement of any of our services in new or existing markets or the deterioration of the quality of our services could significantly damage our brand names and reputation and adversely impact our ability to attract and retain customers and visitor traffic.

Our growth plans place a significant demand on our management, systems and other resources. In addition to training and managing a growing workforce, we will need to continue to develop and improve our financial and management controls and our reporting systems and procedures. We cannot assure you that we will be able to efficiently or effectively manage the growth of our operations, and any failure to do so may limit our future growth and have a material adverse effect on our business, financial condition and results of operations.

We rely on the creditworthiness of our borrowers, which may limit our ability to recover from a defaulting borrower.

We launched our financial services focusing on the provision of loans to home buyers and other borrowers in 2015. A significant portion of our loan portfolio consists of secured loans. As of December 31, 2022, 17.4% of our outstanding loans receivable were unsecured. We have implemented credit evaluation procedures to enable us to select borrowers based on their creditworthiness. However, we do not have significant experience with assessing creditworthiness and loan underwriting and, as a result, our evaluation may not be reliable. We also do not have experience in collecting loans in default or working with borrowers to resolve payment difficulties with their loans. Our ability to recover payments from defaulting borrowers of unsecured loans may be more limited than those secured by collateral or mortgage. For our secured loans, the value of collateral securing our loans is subject to change, and may fall below the outstanding amount of the loans and thus be insufficient to cover our loss in the event of a customer default.

Our borrowers’ ability to repay our loans is affected by a number of factors, including economic development in the regions where these borrowers reside or operate, market conditions in the industries where these borrowers conduct business, development of these borrowers’ businesses, borrowers’ employment situations and, in particular, as well as the conditions of the real estate market in China. If our borrowers default, we may apply to enforce our claims against the defaulting borrowers and their assets, including the collateral pledged to us, through court proceedings. However, the procedures for enforcing the assets and liquidating or otherwise realizing the value of the assets may be protracted or ultimately unsuccessful, and the enforcement process may be difficult for various reasons. As a result, if our borrowers default for any reason, our business, results of operations and financial condition may be materially and adversely affected.

Our financial services are subject to various regulatory restrictions.

We obtained approvals to engage in the microfinancing business from government authorities of four cities, including Beihai (the obtained approval of which has been transferred to Nanning in 2021), Shanghai, Chongqing and Tianjin. Pursuant to Notice on Regulating the “Cash Loan” Business, issued by Office of the Leading Group for the Special Campaign against Internet Financial Risks and the Office of the Leading Group for the Special Campaign against Peer-to-peer Lending Risks on December 1, 2017, or Notice on Regulating Cash Loan, internet microfinance businesses is strictly regulated. According to the Notice on Regulating Cash Loan, among other requirements, microfinance companies are required to suspend distribution of internet microloans that are not supported by specific scenarios and no specific purpose, gradually reduce the outstanding loan balance within the prescribed time limit and complete rectifications within the prescribed time limit.

According to the Guiding Opinions on the Pilot Operation of Microfinance Companies, or the Guiding Opinions jointly issued by the China Banking Regulatory Commission and the PBOC on May 4, 2008, microfinance companies are limited liability companies or joint stock companies established with the capital contribution from natural persons, legal persons and other organizations, which do not accept public deposits and engage in the microfinance business. To set up a microfinance company, an applicant shall submit a formal application to the competent administrative departments at the provincial level. Upon approval, the applicant shall apply to the local branch of the SAIC to obtain a business license for the microfinance company. In addition, the applicant shall complete certain filings with the local police department, the local office of the China Banking Regulatory Commission and the local branch of the PBOC. According to the Guiding Opinions, a provincial government may launch pilot programs for microfinance companies within prefectural regions of the province only after it designates a department (finance office or other relevant institutions) to be in charge of supervision and administration of microfinance companies and is willing to be responsible for risk management and disposals with respect to microfinance companies. Consequently, microfinance companies are primarily regulated locally by provincial governments under rules and regulations promulgated by the provincial governments.

In November 2009, the provincial government of the Guangxi Zhuang Autonomous Region issued the Management Measures of Microfinance Companies in Guangxi Zhuang Autonomous Region. In 2014, we obtained approvals to engage in the microfinancing business from government authorities of Beihai city, Guangxi Zhuang Autonomous Region. Pursuant to the Management Measures of Microfinance Companies in Guangxi Zhuang Autonomous Region, Beihai Tian Xia Dai Microfinance Co., Ltd. (“Beihai Tian Xia Dai Microfinance”) with microfinancing approvals cannot conduct microfinancing business outside Beihai city. In 2021, Beihai Tian Xia Dai Microfinance relocated to Nanning city, Guangxi Zhuang Autonomous Region, and it also changed its name to Nanning Tian Xia Dai Microfinance Co., Ltd. as well as obtained the approvals to change the geographic scope of its microfinancing business from Beihai to Nanning from government authorities. However, if Nanning Tian Xia Dai Microfinance Co., Ltd. provides loans outside Nanning, and as a result, it may face the risk of being rectified by the relevant authorities.

Changes in the interest rates and spread could negatively affect the revenue generated from our financial services.

Our financial services generate revenue primarily from interest income. The interest rates we charge the borrowers are linked to the PBOC benchmark rate, which may fluctuate significantly due to changes in the PRC government’s monetary policies. If we are required to lower the interest rates we charge our borrowers to reflect the decrease in the PBOC benchmark interest, the interest earned from our loans will decline. Furthermore, we may face fierce price competition, and as a result we may also lower our interest rates. Either case could negatively affect the revenue generated from our financial services.

The members of our senior management team have played an important role in the growth and development of our business, and if we are unable to continue to retain their services, our business, financial condition and results of operations could be materially and adversely affected.

Our future success is significantly dependent upon the continued services of our senior management. To date, we have relied heavily on the expertise and experience of senior management personnel in our business operations, including their extensive knowledge of the PRC real estate market, their strong reputation in the PRC real estate industry, and their relationships with our employees, relevant regulatory authorities and many of our customers. If our senior management personnel are unable or unwilling to continue in their present positions, we may not be able to locate suitable or qualified replacements and may incur additional expenses to identify their successors. In addition, if our senior management personnel joins a competitor or forms a competing company, we may lose our customers, and our collaboration arrangements may be disrupted, which would have a material adverse effect on our business, financial condition and results of operations. We do not maintain key-man insurance for our senior management personnel.

Failure to attract and retain qualified personnel could jeopardize our competitive position.

As our industry is characterized by high demand and intense competition for talent, we may need to offer higher compensation and other benefits in order to attract and retain quality sales, technical and other operational personnel in the future. We have from time to time in the past experienced, and we expect in the future to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. We cannot assure you we will be able to attract or retain the quality personnel that we need to achieve our business objectives. If we fail to successfully attract new personnel or retain and motivate our current personnel, we may lose competitiveness and our business, financial condition and results of operations could be materially and adversely affected.

We may be subject to intellectual property infringement or misappropriation claims by third parties, which may force us to incur substantial legal expenses and, if determined adversely against us, could materially disrupt our business.

We cannot be certain that our services and information provided on our websites and mobile apps do not or will not infringe patents, copyrights or other intellectual property rights held by third parties. From time to time, we may be subject to legal proceedings and claims alleging infringement of patents, trademarks or copyrights, or misappropriation of creative ideas or formats, or other infringement of proprietary intellectual property rights.

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We have applied to register in China the Chinese and English dual-language “SouFun” trademark as well as “SouFun” in English and “搜房” (“SouFun” in Chinese) individually, and have successfully registered such trademarks in some industry categories, but our applications for certain other industry categories conflict with existing registrations or applications for similar trademarks by another PRC company in such industry categories, which have resulted in litigations. In April 2014, the Higher People’s Court of Beijing Municipality reversed a lower court’s judgment in favor of us and ordered the PRC Trademark Review and Adjudication Board of SAIC to reconsider another PRC company’s trademark application for “SOFANG” that it had previously rejected. In April 2015, the Supreme People’s Court of the PRC accepted our application for retrial over the judgment of the Higher People’s Court of Beijing Municipality but ultimately denied our application. Nevertheless, in 2015, we obtained new trademarks “Fang.com” in English and “房天下” (“Fang Tian Xia” in Chinese) and began to market our services under these new brands in connection with the transformation of our business model. We therefore do not currently expect our business would be materially and adversely affected even if we lose the right to use the trademark relating to “SouFun” in certain limited industry categories.

Moreover, we have previously been involved in disputes arising from alleged infringement of third parties’ copyrights on our websites and mobile apps, such as the use of photos or articles to which we did not have the rights, which led to judgments against us. We could be subject to similar claims, suits or judgments in the future if we post information to which we do not have the rights. Any such claims, regardless of merits, may involve us in time-consuming and costly litigation or investigation and divert significant management and staff resources. If we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property and may also be ordered to pay fines or monetary damages. As a result, we would be required to enter into expensive royalty or licensing arrangements or to develop alternative technologies, business methods, content or other intellectual property. We expect that the likelihood of such claims may increase as the number of competitors in our markets grows and as related patents and trademarks are registered and copyrights are obtained by such competitors. In addition, as we have expanded, and may continue to expand, our business into new geographical markets, we may be exposed to such claims in jurisdictions other than China and the scope of intellectual property protection in these overseas jurisdictions may be different from or greater than that in China. The intellectual property laws in overseas jurisdictions may also impose more stringent compliance requirements and cause more potential damages or penalties than those in China. Such claims in overseas jurisdictions, if successful, could require us to pay significant compensatory and punitive damage awards as well as expose us to costly and time-consuming litigation or investigations, all of which could materially disrupt our business and have a material adverse effect on our growth and profitability.

We are exposed to potential liability for information on our websites and mobile apps and for products and services sold through our websites and mobile apps and we may incur significant costs and damage to our reputation as a result of defending against such potential liability.

We provide third-party content on our websites and mobile apps such as real estate listings, links to third-party websites, advertisements and content provided by customers and users of our community-oriented services. We could be exposed to liability with respect to such third-party information. Among other things, we may face assertions that, by directly or indirectly providing such third-party content or links to other websites, we should be liable for defamation, negligence, copyright or trademark infringement, or other actions by parties providing such content or operating those websites. We may also face assertions that content on our websites, including statistics or other data we compile internally, or information contained in websites linked to our websites and mobile apps contains false information, errors or omissions, and users and our customers could seek damages for losses incurred as a result of their reliance upon or otherwise relating to incorrect information. We may also be subject to fines and other sanctions by the government for such incorrect information, misleading information and other information prohibited by the PRC laws and regulations. Moreover, our relevant consolidated controlled entities, as Internet advertising service providers, are obligated under PRC laws and regulations to monitor the advertising content shown on our websites and mobile apps for compliance with applicable law. Violation of applicable law may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the offending advertisements and orders to publish advertisements correcting the misleading information. In case of serious violations, the PRC authorities may revoke the offending entities’ advertising licenses and/or business licenses. In addition, our websites and mobile apps could be used as a platform for fraudulent transactions and third-party products and services sold through our websites and mobile apps may be defective. The measures we take to guard against liability for third-party content, information, products and services may not be adequate to exonerate us from relevant civil and other liabilities.

Any such claims, with or without merit, could be time-consuming to defend and result in litigation and significant diversion of management’s attention and resources. Even if these claims do not result in liability to us, we could incur significant costs in investigating and defending against these claims and suffer damage to our reputation.

Potential acquisitions and office, training facility and land purchases, which form part of our strategy, may disrupt our ability to manage our business effectively, including our ability to successfully integrate acquired businesses into our existing operations.

Potential acquisitions form part of our strategy to further expand and operate our business. Acquisitions and the subsequent integration of new companies or businesses will require significant attention from our management, in particular to ensure that the acquisition does not disrupt any existing collaborations, or affect our users’ opinion and perception of our services and customer support. In addition, our management will need to ensure that the acquired business is effectively integrated into our existing operations.

The diversion of our management’s attention and any difficulties encountered in integration could have a material adverse effect on our ability to manage our business. In addition, acquisitions could expose us to potential risks, including:

In addition, in connection with our business expansion, we have acquired office space and training facilities as well as commercial land and may continue to do so in the future if suitable opportunities arise. For more details on our recent office, training facility and land acquisitions, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results” and “Item 4.B. Information on the Company—Business Overview—Facilities” in this annual report. Acquisition of property has inherent risks, including the fluctuation of property value, which could potentially lead to potential asset write-off if the value of such properties were to substantially decrease.

If we fail to achieve and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud, which could result in harm to our business, loss of investor confidence in our financial reporting and a lower trading price of our ADSs or notes.

Effective internal controls are necessary for us to provide accurate and timely financial reports and effectively prevent fraud. We discovered in 2022 and in the past, and may in the future discover, areas of our internal controls involving deficiencies, significant deficiencies or material weaknesses that have required or will require improvements in our procedures on the preparation, review, approval and disclosure of financial reports.

In the course of preparing and auditing our consolidated financial statements for the year ended December 31, 2022, we and our independent registered public accounting firm, respectively, identified one material weakness in our internal control over financial reporting as of December 31, 2022. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The material weakness identified is that we did not have sufficient financial reporting and accounting personnel to formalize, design, implement and operate key controls over financial reporting process in order to report financial information in accordance with U.S. GAAP and SEC reporting requirements. To remedy our identified material weakness subsequent to December 31, 2022, we plan to undertake steps to strengthen our internal control over financial reporting, including: (1) hiring more qualified resources including financial director and financial controller, equipped with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework, (2) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel, (3) establishing effective oversight and clarifying reporting requirements for non-recurring and complex transactions to ensure consolidated financial statements and related disclosures are accurate, complete and in compliance with SEC reporting requirements, and (4) upgrading our operating and accounting systems to prevent systematic errors.

Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

A lack of effective internal control over financial reporting could result in the loss of investor confidence in the reliability of our financial statements and negatively impact the trading price of our ADSs. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time or as necessary to correct deficiencies or weaknesses in our controls, we may not be able to provide accurate financial statements, which could cause us to fail to meet our reporting obligations or provide accurate financial statements, and cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our ADSs.

Certain of our leased property interests may be defective and we may be forced to relocate operations affected by such defects, which could cause significant disruption to our business.

As of December 31, 2022, we had leased properties in approximately 51 cities in China in addition to our principal executive offices in Beijing, China. A number of these leased properties, all of which were used as offices, contained defects in the leasehold interests. Such defects included the lack of proper title or right to lease and the landlords’ failure to duly register the leases with the relevant PRC government authority. A number of lease agreements were not renewed timely.

In situations where a tenant lacks evidence of the landlord’s title or right to lease, the relevant lease agreement may not be valid or enforceable under PRC laws, rules and regulations, and may also be subject to challenge by third parties. In addition, under PRC laws, rules and regulations, the failure to register the lease agreement will not affect its effectiveness between the tenant and the landlord, however, such lease agreement may be subject to challenge by and unenforceable against a third party who leases the same property from the landlord and has duly registered the lease with the competent PRC government authority. Furthermore, the landlord and the tenant may be subject to administrative fines for such failure to register the lease.

We have taken steps to renew lease agreements and cause our landlords to procure valid evidence as to the title or right to lease, as well as to complete the lease registration procedures. However, we cannot assure you that such defects will be cured in a timely manner or at all. Our business may be interrupted and additional relocation costs may be incurred if we are required to relocate operations affected by such defects. Moreover, if our lease agreements are challenged by third parties, it could result in diversion of management attention and cause us to incur costs associated with defending such actions, even if such challenges are ultimately determined in our favor.

We have limited business insurance coverage in China.

The insurance industry in China is still at an early stage of development and PRC insurance companies offer only limited business insurance products. As a result, we do not have any business disruption insurance or litigation insurance coverage for our operations in China. Any business disruption, litigation or natural disaster may cause us to incur substantial costs and result in the diversion of our resources, as well as significantly disrupt our operations, and have a material adverse effect on our business, financial position and results of operations.

Certain of our loans may be declared immediately repayable.

Certain of our consolidated controlled entities obtained from a PRC commercial bank loans in the aggregated principal amount of approximately RMB235 million (US$34 million) as of December 31, 2022. According to loan agreement, if the borrowers fail to maintain certain financial indicators, the bank will be entitled to declare the loans immediately repayable. Even though we obtained a waiver from the lender indicating that the lender permanently gave up its right to demand payment as a result of the violation as of December 31, 2022, we would be in default at the December 31, 2022 balance sheet date and it is probable that we will be unable to comply with all provisions of the debt agreement for a period of one year from the balance sheet date. As of the date of this annual report, the bank has not indicated its intention for us to immediately repay such loans; however, we cannot assure you that the bank would not change its position and declare such loans immediately repayable in the future, which may adversely affect our liquidity position.

We may be subject to liabilities as a result of the separation and distribution.

We have entered into various business, financing and other contracts in the ordinary course of business. Some of the contracts require us to notify or seek prior consent from the counterparties in connection with material changes to our business operations or corporate structure. We believe that we have carried out our contractual obligations and are not otherwise in material default or violation of those contracts. However, if any contractual counterparties find us in default or violation due to failure to notify them or seek their prior consent in connection with the separation of CIH or otherwise, they may terminate their business relationship with us, declare any repayment obligations immediately due and/or pursue legal actions against us, which may materially and adversely affect our business operations, financial condition and results of operations.

CIH and we may fail to perform under certain transaction agreements that are executed as part of the separation and distribution, and we may not have necessary systems and services in place when these transaction agreements expire.

In connection with the separation and distribution, CIH and we have entered into several agreements, including separation and distribution agreement and related ancillary agreements. The separation and distribution agreement and related ancillary agreements determine, among other things, the allocation of business, assets and liabilities between us and CIH following the separation and distribution for those respective areas and include any necessary indemnifications related to liabilities and obligations. CIH and we have also entered into a business cooperation agreement, which establishes a business cooperation between us and CIH in connection with the listing service business for an initial term of ten years commencing from its signing date. See “Item 4.B. Information on the Company—Business Overview—Separation of CIH” and “Item 7.B. Major Shareholders and Related Party Transactions—Related Party Transactions—Separation and Distribution Related Agreements in connection with the Separation of CIH—Separation and Distribution Agreement” for details of the agreements between CIH and us in connection with the separation and distribution. If CIH is unable to satisfy its obligations under these agreements, we could incur operational difficulties or losses that could have a material and adverse effect on our business, financial condition and results of operations.

Potential indemnification liabilities owing to CIH pursuant to the separation and distribution agreement could materially and adversely affect our business, financial condition and results of operations.

The separation and distribution agreement provides for, among other things, indemnification obligations generally designed to make us financially responsible for, among others, certain liabilities associated with our business, certain guarantee, indemnification and tax liabilities, as well as any breach by us of the separation and distribution agreement and related ancillary agreements as well as any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in any disclosure document that describes the separation or the distribution or us and our subsidiaries or primarily relates to the transactions contemplated by the separation and distribution agreement, subject to certain exceptions. If we are required to indemnify CIH under the circumstances set forth in the separation and distribution agreement, we may be subject to substantial liabilities. See “Item 7.B. Major Shareholders and Related Party Transactions—Related Party Transactions—Separation and Distribution Related Agreements in connection with the Separation of CIH—Separation and Distribution Agreement.”

Third party claims, shareholders litigation or government investigations to which we may be subject or in which we may be involved may significantly increase our expenses and adversely affect our stock price.

We may be or may be expected to be a party to various third-party claims, lawsuits, shareholders litigation or government investigations from time to time. For example, in February 2019, we were served with a subpoena from a court in Beijing, in which a third party claimed that a contract we entered into was invalid. Pursuant to such contract, we received certain assets from a debtor’s nominee to discharge its indebtedness. The debtor subsequently alleged that such contract was invalid because the transfer price of such assets was below the fair market value. We vigorously contested the allegation and the received a judgment in our favor. Such third party appealed to a higher court, and the case was was closed in 2021 with the higher court upholding the judgment from the first instance trial, which was in our favor. Any lawsuits or government investigations, whether actual or threatened, in which we may be involved, whether as plaintiff or defendant, could cost us a significant amount of time and money, could distract management’s attention away from operating our business, could result in negative publicity and could adversely affect our stock price. In addition, if any claims are determined against us or if a settlement requires us to pay a large monetary amount or take other action that materially restricts or impedes our operations, our profitability could be significantly reduced and our financial position could be adversely affected. Our insurance may not be sufficient to cover any losses we incur in connection with litigation claims.

Our leads generation business has a limited operating history, which makes it difficult to evaluate its value.

In late 2017, we launched our real estate consumer mining services, or our leads generation services, which, we believe, has experienced consistent growth since its launch. However, the historical growth of our leads generation business may not be indicative of its future performance, and we cannot assure you that any significant growth of the past will be sustainable or achievable at all in the future. The growth prospects of our leads generation business involve risks and uncertainties that fast-growing businesses with a limited operating history in our industry may encounter. We cannot assure you that we will be able to effectively manage the growth of our leads generation. If the market for such services does not develop as we expect or if we fail to address the needs of this dynamic market, the growth prospects of our leads generation business will be materially and adversely affected.

We may not be able to ensure the conversion rate of the leads we generate from our leads generation services.

The acceptance and popularity of our leads generation services is premised on the conversion rate of the leads we generate into deal successes. We strive to provide the best content and services to attract potential consumers and secure quality leads for our customers. However, the successful conversion of a business lead into a paying customer also implicates many other factors, such as the sales capacity and product quality of our customers, the macro economy downturn, and a shift in policy affecting the real estate related sectors, most of which are beyond our control. If the conversion rate of the leads we generate is not to the satisfaction of our customers, the need for such services may diminish or vanish, which would harm our business, financial condition and results of operations.

Any catastrophe, including natural catastrophes and outbreaks of health pandemics, such as the COVID-19 pandemic, and other extraordinary events, could disrupt our business operation.

The occurrence of unforeseen or catastrophic events, including extreme weather events and other natural disasters, man-made disasters, or the emergence of epidemics or pandemics, depending on their scale, may cause different degrees of damage to the national and local economies and could cause a disruption in our operations and have a material adverse effect on our financial condition and results of operations. Natural disaster, health pandemic, or other event beyond our control may give rise to server interruptions, breakdowns, system failures or Internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide products or services.

Our business operations could also be disrupted if any of our employees has contracted or is suspected of contracting any contagious disease or condition, such as COVID-19, Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, Severe Acute Respiratory Syndrome, or SARS, or other epidemics, since it could require our employees to be quarantined and/or our offices to be closed down and disinfected. In addition, our business, results of operations and financial condition could be adversely affected to the extent that any of these epidemics harms the Chinese economy, China’s real estate industry and business operations of our customers in general.

A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect our business and our financial condition.

The global macroeconomic environment was facing numerous challenges. The growth rate of the Chinese economy had already been slowing since 2010. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies which had been adopted by the central banks and financial authorities of some of the world’s leading economies, including problems that may arise from the unwinding of those policies. The Federal Reserve has cut interest rates in the United States. The Russia-Ukraine conflict has caused, and continues to intensify, significant geopolitical tensions in Europe and across the world. This conflict and the imposition of broad economic sanctions on Russia could raise energy prices and disrupt global markets. Unrest, terrorist threats and the potential for war in the Middle East and elsewhere may increase market volatility across the globe. There have also been concerns about the relationship between China and other countries, including the surrounding Asian countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.

Risks related to our corporate structure

If the PRC government determines that the structure contracts that establish the structure for our business operations do not comply with applicable PRC laws, rules and regulations, we could be subject to severe penalties or be forced to restructure our ownership structure.

As we are a Cayman Islands company and our PRC subsidiaries and their branch companies in China are treated as foreign-invested enterprises under applicable PRC laws, we are subject to ownership limitations as well as special approval requirements on foreign investment. Due to legal restrictions on foreign ownership and investment in, among other areas, value-added telecommunication services, we, similar to all other entities with foreign-incorporated holding company structures operating in our industry in China, operate our Internet businesses and other related business in China through our wholly-owned PRC subsidiaries and our consolidated controlled entities. Our wholly-owned PRC subsidiaries, our consolidated controlled entities (excluding their subsidiaries) and their respective shareholders have entered into a series of contractual arrangements, which consist of exclusive technical consultancy and service agreements, equity pledge agreements, operating agreements, shareholders’ proxy agreements, loan agreements and exclusive call option agreements (collectively, the “Structure Contracts”). See “Item 7.B. Major Shareholders and Related Party Transactions—Related Party Transactions—Structure Contracts” of this annual report. As a result of these contractual arrangements, we exercise the ability to control the consolidated controlled entities through our power to direct the activities of consolidated controlled entities that most significantly impact their economic performance, and the obligation to absorb losses of or the right to all the residual benefits of the consolidated controlled entities that could potentially be significant to these entities. Accordingly, we consolidate their results in our financial statements. Our consolidated controlled entities hold the licenses and approvals that are essential to the operation of our Internet content distribution business. As certain agreements with our customers for Internet content distribution were entered into directly with our PRC subsidiaries and not our consolidated controlled entities, there can be no assurance that the PRC government will not deem our Internet content distribution to be in violation of applicable PRC laws, rules and regulations.

On July 13, 2006, MIIT publicly released the Notice on Strengthening the Administration of Foreign Investment in Operating Value-Added Telecommunications Business (the “MIIT Notice”), which reiterates certain provisions under China’s Administrative Rules on Foreign-Invested Telecommunications Enterprises prohibiting, among others, the renting, transferring or sale of a telecommunications license to foreign investors in any form. Under the MIIT Notice, holders of valued-added telecommunications business operating licenses, or their shareholders, must also directly own the domain names and trademarks used by such license holders in their daily operations. To comply with this requirement under the MIIT Notice, we have assigned all registered trademarks, trademark applications and domain names relating to “SouFun,” “Jia Tian Xia,” “Fang.com” and “Fang Tian Xia” to the relevant majority-owned subsidiary or consolidated controlled entities in order to maintain their respective ICP licenses to operate as value-added telecommunication service providers. Due to a lack of interpretative materials from the authorities, we cannot assure you that MIIT will not consider our corporate structure and the contractual arrangements as a kind of foreign investment in telecommunication services, in which case we may be found in violation of the MIIT Notice.

On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it took effect on January 1, 2020. For further details of the Foreign Investment Law, please see “—Substantial uncertainties exist with respect to the adoption of new or revised PRC laws relating to our corporate structure, corporate governance and business operations.”

If the past or current ownership structures, Structure Contracts and businesses of our company, our PRC subsidiaries and our consolidated controlled entities are found to be in violation of any existing or future PRC laws, rules or regulations, MIIT and other relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

We cannot assure you that the relevant PRC regulatory authorities will not require that we amend our Structure Contracts to comply with the MIIT Notice or that we can restructure our ownership structure without material disruption to our business. In addition, new PRC laws, rules and regulations may be introduced to impose additional requirements that may be applicable to our corporate structure and contractual arrangements. The imposition of any of these penalties and the effect of any new PRC laws, rules and regulations applicable to our corporate structure and contractual arrangements could materially disrupt our ability to conduct our business and have a material adverse effect on our financial condition and results of operations.

We cannot assure you that we will be able to enforce the Structure Contracts. Although we believe we are in compliance with current PRC regulations, we cannot assure you that the PRC government would agree that these contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws and regulations governing the validity of these contractual arrangements are open to varying interpretations and the relevant government authorities have broad discretion in interpreting these laws and regulations.

Substantial uncertainties exist with respect to the adoption of new or revised PRC laws relating to our corporate structure, corporate governance and business operations.

On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which became effective on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation, and failure to take timely and appropriate measures to cope with the regulatory-compliance challenges could result in material and adverse effect on us. For instance, though the Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment, it contains a catch-all provision under the definition of “foreign investment”, which includes investments made by foreign investors in China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated by the Stale Council to provide for contractual arrangements as a form of foreign investment, at which time it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment in the PRC and if yes, how our contractual arrangements should be dealt with. In addition, if future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. In the worst-case scenario, we may be required to unwind our existing contractual arrangements and/or dispose of the relevant business operations, which could have a material adverse effect on our current corporate structure, our listing service business and results of operations.

We may lose the ability to utilize assets held by our consolidated controlled entities that are important to the operation of our business if any of these entities goes bankrupt or becomes subject to a dissolution or liquidation proceeding.

Our wholly-owned PRC subsidiaries are considered foreign-invested enterprises in China and are, therefore, not permitted under PRC law to hold the ICP licenses and to operate the online advertising businesses that are critical to our operations. As a result, our consolidated controlled entities are the holders of the ICP licenses required for operating our websites and our advertising business in China. We do not have any direct or indirect shareholding interests in these consolidated controlled entities. They are instead held directly or indirectly by Mr. Mo, our founder and executive chairman, together with Mr. Jiangong Dai, our former director and former chief executive officer, or Mr. Jianning Dai, our general manager for asset management. Mr. Jiangong Dai and Mr. Jianning Dai are nephews of Mr. Mo. Each of Mr. Mo, Mr. Jiangong Dai and Mr. Jianning Dai is a PRC citizen. Through the Structure Contracts, we exercise management, financial and voting control over these consolidated controlled entities through our rights to all the residual benefits of the consolidated controlled entities and our obligation to fund losses of the consolidated controlled entities and also have a contractual right, to the extent permitted by PRC laws, rules and regulations, to acquire the equity interests in these entities. Consequently, if any of these consolidated controlled entities goes bankrupt and all or part of its assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. If any of our consolidated controlled entities undergoes a voluntary or involuntary liquidation proceeding, the shareholders or unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

Contractual or other arrangements among our affiliates may be subject to scrutiny by PRC tax authorities, and a finding that we or our affiliates owe additional taxes could substantially reduce our profitability and the value of your investment.

As a result of the Structure Contracts, we are entitled to substantially all of the economic benefits of ownership of the consolidated controlled entities and also bear substantially all of the economic risks associated with consolidated controlled entities. If the PRC tax authorities determine that the economic terms, including pricing, of our arrangements with our consolidated controlled entities were not determined on an arm’s length basis, we could be subject to significant additional tax liabilities. In particular, the PRC tax authorities may perform a transfer pricing adjustment, which could result in a reduction, for PRC tax purposes, of deductions recorded by our consolidated controlled entities. Such a reduction could increase the tax liabilities of our consolidated controlled entities without reducing the tax liabilities of our PRC subsidiaries. This increased tax liability could further result in late payment fees and other penalties to our consolidated controlled entities for underpaid taxes. Any of these events could materially reduce our net income.

Contractual arrangements, including voting proxies, with our consolidated controlled entities for our Internet content distribution and marketing businesses may not be as effective in providing operational control as direct or indirect ownership.

Since the applicable PRC laws, rules and regulations restrict foreign ownership in the Internet content distribution and marketing businesses, we conduct our Internet content distribution and advertising businesses and derive related revenues through the Structure Contracts with our consolidated controlled entities. As we have no direct or indirect ownership interest in our consolidated controlled entities, these Structure Contracts, including the voting proxies granted to us, may not be as effective in providing us with control over these companies as direct or indirect ownership. If we were the controlling shareholders of these companies with direct or indirect ownership, we would be able to exercise our rights as shareholders to effect changes in the board of directors, which in turn could effect change, subject to any applicable fiduciary obligations, at the management level. However, if any of our consolidated controlled entities or their shareholders fail to perform their obligations under these contractual arrangements, or if they were otherwise to act in bad faith towards us, we may be forced to (1) incur substantial costs and resources to enforce such arrangements, including the voting proxies, and (2) rely on legal remedies available under PRC law, including exercising our call option right over the equity interests in our consolidated controlled entities, seeking specific performance or injunctive relief, and claiming monetary damages.

Furthermore, pursuant to the equity interest pledge agreements between certain of our PRC subsidiaries and the individual shareholders of our consolidated controlled entities, each individual shareholder of our consolidated controlled entity agrees to pledge his equity interests in the consolidated controlled entities to our subsidiaries to secure the relevant consolidated controlled entities’ performance of their obligations under the exclusive technical consultancy and service agreements of the Structure Contracts. The equity interest pledges of shareholders of consolidated controlled entities under these equity pledge agreements have been registered with the relevant local branch of SAIC. The equity interest pledge agreements with the consolidated controlled entities’ individual shareholders provide that the pledged equity interest shall constitute security for consulting and service fees under the exclusive technical consultancy and service agreements. The scope of pledge is not limited by the amount of the registered capital of that consolidated controlled entity. However, it is possible that a PRC court may take the position that the amount listed on the equity pledge registration forms represents the full amount of the collateral that has been registered and perfected. If this is the case, the obligations that are supposed to be secured in the equity interest pledge agreements in excess of the amount listed on the equity pledge registration forms could be determined by the PRC court as unsecured debt, which takes last priority among creditors. Such a decision could materially and adversely affect our liquidity and our ability to fund and expand our business.

In anticipation of our originally proposed acquisition of a controlling stake in Chongqing Wanli New Energy Co., Ltd., a PRC company listed on the Shanghai Stock Exchange (stock code: 600847) (“Wanli”) and the sale of a portion of our equity interest in five wholly-owned subsidiaries that operate as our service platforms for online advertising business to Wanli (which was terminated in February 2017), in December 2015, we underwent an internal restructuring, whereby we terminated all of our previous structure contracts and caused Beijing Zhong Zhi Shi Zheng and Jia Tian Xia Network, our wholly-owned PRC subsidiaries, to enter into a series of structure contracts in 2016, or the 2016 Structure Contracts, with our consolidated controlled entities, with terms and conditions substantially similar to those of our previous structure contracts. In February 2017, we terminated the transaction with Wanli in light of substantial regulatory uncertainties in China. Among the 2016 Structure Contracts, Beijing Zhong Zhi Shi Zheng entered into a series of contractual arrangements with certain of our consolidated controlled entities and their nominee shareholders. In anticipation of the separation and distribution in relation to CIH, which is the parent company of Beijing Zhong Zhi Shi Zheng, we terminated the foregoing contractual arrangements between our group and these entities on May 15, 2018, and subsequently caused Beijing Tuo Shi Huan Yu Network Technology Co., Ltd. (“Beijing TuoShi”), our wholly-owned PRC subsidiary, to enter into a new series of contractual arrangements with these consolidated controlled entities in 2018, with terms and conditions substantially similar to the 2016 Structure Contracts. In 2019, we entered into supplemental agreements, pursuant to which Mr. Jiangong Dai transferred all his rights, obligations and responsibilities under certain Structure Contracts to Mr. Jianning Dai. In 2018, we entered into new series of Exclusive Call Option Agreements with certain of our PRC subsidiaries, for the purpose of including Fang Holdings Limited as a party of the Exclusive Call Option Agreement. In 2020, we also entered into a supplemental agreement, pursuant to which Fang Holdings Limited transferred all the rights and responsibilities under certain Structure Contract to its subsidiary. See “Item 7.B. Major Shareholders and Related Party Transactions—Related Party Transactions—Structure Contracts” of this annual report. We believe that our contractual arrangements with our consolidated controlled entities for our Internet content distribution and marketing businesses are not materially affected by our internal restructuring. We cannot assure you, however, that our current Structure Contracts are as effective as the previous ones in terms of controlling our Internet content distribution and marketing businesses, nor can we assure you that these contractual arrangements will not be further modified. Any modification could potentially adversely affect our control, or result in our loss of control, over the Internet content distribution and marketing businesses. In the event that we are unable to enforce these contractual arrangements, or if we experience significant delays or other obstacles in the process of enforcing these contractual arrangements, our business, financial condition and results of operations could be materially and adversely affected.

Our business may suffer if we fail to carry out our business arrangements related to online video broadcasting related business with certain consolidated controlled entities of our company.

Beijing Technology, which holds licenses of online video recording and broadcasting, entered into a cooperation agreement with certain of our wholly-owned subsidiaries, under which Beijing Technology is responsible for the operation of online video broadcasting, while those subsidiaries are responsible for relevant technical support. During its possession of the domain name “fang.com,” Beijing Technology published online videos by embedding videos on webpages or placing video links on “fang.com.”

Although such business cooperation agreement does not violate current PRC laws and regulations regarding online broadcasting and recording, we cannot assure you that due to any change of laws and regulatory policies, the abovementioned business cooperation agreement will not be deemed void, revocable or unenforceable under then applicable PRC laws amended from time to time or by regulatory authorities in the future. Should any of the above occur, the relevant business of the relevant subsidiaries will be impaired, which would have a material adverse effect on our business, financial condition and results of operations.

Moreover, under the applicable PRC laws, rules and regulations, the failure to maintain licenses of online video recording and broadcasting may subject the entity to various penalties, including confiscation of revenues, imposition of fines and/or restrictions on the entity conducting such activities’ business operations, or the discontinuation of their operations.

We rely on contractual arrangements among our PRC subsidiaries, the variable interest entities and their shareholders, which may not be as effective as direct ownership in providing operational control.

We rely on contractual arrangements among our PRC subsidiaries, the variable interest entities and their respective shareholders to operate our business. For descriptions of these contractual arrangements, see “Item 4. Information on the Company-C. Organizational Structure.” These contractual arrangements may not be as effective as direct ownership in providing us with control over the variable interest entities. These contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. If any of the other parties fails to perform their obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and we would have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief and claiming damages, which we cannot assure you will be effective. Furthermore, the legal environment in China is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements, which may make it difficult to exert effective control over the variable interest entities, and our ability to conduct our business may be negatively affected.

In 2020, 2021 and 2022, our VIEs and their respective subsidiaries and branches contributed in aggregate 68.3%, 66.5% and 66.1% of our total net revenues, respectively. In the event we are unable to enforce the contractual arrangements, we may not be able to have the power to direct the activities that most significantly affect the economic performance of Beijing TuoShi, Jia Tian Xia Network and their respective subsidiaries and branches, and our ability to conduct our business may be negatively affected, and we may not be able to consolidate the financial results of Beijing TuoShi, Jia Tian Xia Network and their respective subsidiaries and branches into our consolidated financial statements in accordance with U.S. GAAP.

The shareholders of our consolidated controlled entities may have potential conflicts of interest with us, and if any such conflicts of interest are not resolved in our favor, our business may be materially and adversely affected.

We operate through a number of consolidated controlled entities in China. Mr. Tianquan Mo (our founding shareholder and former chairman of board of directors), Mr. Jiangong Dai and Mr. Jianning Dai together hold 100.0% of the equity interest in these consolidated controlled entities. The interests of Mr. Mo, Mr. Jiangong Dai and Mr. Jianning Dai as the nominee shareholders of the consolidated controlled entities may differ from the interests of our company as a whole, as what is in the best interests of our consolidated controlled entities may not be in the best interests of us and our other shareholders. We cannot assure you that when conflicts of interest arise, Mr. Mo, Mr. Jiangong Dai or Mr. Jianning Dai will act in the best interests of our company or that conflicts of interest will be resolved in our favor. In addition, Mr. Mo, Mr. Jiangong Dai and Mr. Jianning Dai may breach or cause our consolidated controlled entities and their respective subsidiaries to breach or refuse to renew the existing contractual arrangements with us. We rely on Mr. Mo, Mr. Jiangong Dai and Mr. Jianning Dai to comply with the laws of China, which protect contracts and provide that directors and executive officers owe a duty of loyalty to our company and require them to avoid conflicts of interest and not to take advantage of their positions for personal gains. We also rely on Mr. Mo to abide by the laws of the Cayman Islands, which provide thata director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he or she owes certain fiduciary duties to the Company, including but not limited to a duty to act bona fide in the best interests of the company and a duty to act with skill and care. However, the legal frameworks of China and the Cayman Islands do not provide guidance on resolving conflicts in the event of a conflict between the laws of China and the Cayman Islands regarding which corporate governance regime controls. If we cannot resolve any conflicts of interest or disputes between us and Mr. Mo, Mr. Jiangong Dai or Mr. Jianning Dai, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

We are controlled by our significant shareholders and their affiliated entities, whose interests may differ from our other shareholders.

As of May 24, 2022, Mr. Mo may be deemed to have voting and dispositive power with respect to: (1) 5,841,844 Class A ordinary shares and 16,539,500 Class A ordinary shares represented by ADSs owned by ACE Smart Investments Limited; (2) 1,367,378 Class A ordinary shares and 11,355,645 Class B ordinary shares owned by Media Partner Technology Limited (“Media Partner”), with respect to Mr. Mo and his family members, (3) 1,138,125Class A ordinary shares including 14,170 Class A ordinary shares represented by ADSs, and 10,230,645 Class B ordinary shares owned by Next Decade Investments Limited (“Next Decade”), with respect to Mr. Mo and his family members, (4) 926,461 Class A ordinary shares owned by Karistone Limited, (5) 957,265 Class A ordinary shares owned by Ateefa Limited, (6) 1,472,298 Class A ordinary shares owned by Deanhale Limited, and (7) 441,650 Class A ordinary shares represented by ADSs owned by Open Land Holdings Limited, collectively presenting approximately 45.5% of our outstanding Class A ordinary shares and approximately 95.9% of our outstanding Class B ordinary shares. The shares in Media Partner and Next Decade are held in irrevocable discretionary trusts, for which Mr. Mo acts as a protector. Media Partner and Next Decade could exert substantial influence over the outcome of any corporate transaction or other matters submitted to the shareholders for approval, including mergers, consolidations, the sale of all or substantially all of our assets, election of directors and other significant corporate actions. This concentration of ownership may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our ADSs or notes. These actions may be taken even if they are opposed by our other shareholders, including the investors in the ADSs.

The continuing cooperation of our significant shareholders on an on-going basis, including Media Partner and Next Decade, is important to our businesses. Without their consent or cooperation, we could be prevented from entering into transactions or conducting business that could be beneficial to us. We cannot assure you, however, that the interests of our significant shareholders would not differ from the interests of our other shareholders, including investors in the ADSs.

Risks related to doing business in China

China’s economic, political and social conditions, as well as government policies, could have a material adverse effect on our business, financial condition and results of operations.

Our business and operations are primarily conducted in China. Accordingly, our financial condition and results of operations have been, and are expected to continue to be, affected by the economic, political and social developments in relation to the Internet, online marketing and real estate industries in China. A slowdown of economic growth in China could reduce the sale of real estate and related products and services, which in turn could materially and adversely affect our business, financial condition and results of operations.

The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. These measures are intended to benefit the overall PRC economy, but may also have a negative effect on us. For example, our business, financial condition and results of operations could be adversely affected by PRC government control over capital investments or changes in tax regulations that are applicable to us.

The PRC government has been playing a significant role in regulating industry development by imposing industrial policies and also exercising significant administrative measures over China’s economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

Changes in PRC government policies could have a material and adverse effect on overall economic growth in China, which could adversely affect our business.

We conduct substantially all of our business in China. As the real estate industry is highly sensitive to business spending, credit conditions and personal discretionary spending levels, it tends to decline during general economic downturns. Accordingly, our results of operations, financial condition and prospects are subject, to a significant degree, to economic developments in China. While China’s economy has experienced significant growth in the past three decades, growth has been uneven across different periods, regions and among various economic sectors of China. The PRC government may implement measures that are intended to benefit the overall economy even if they would be expected to have a negative effect on the real estate industry. The real estate industry is also sensitive to credit policies. In recent years, the PRC government adjusted the People’s Bank of China’s statutory deposit reserve ratio and benchmark interest rates several times in response to various economic situations. Any future monetary tightening may reduce the overall liquidity in the economy and reduce the amount of credit available for real estate purchase. Higher interest rates may increase borrowing costs for purchasers who rely on mortgage loans to finance their real estate purchase. These could negatively affect overall demand for real estate and adversely affect our operating and financial results. We cannot assure you that China will continue to have rapid or stable economic growth in the future or that changes in credit or other government policies that are intended to create stable economic growth will not adversely impact the real estate industry.

Uncertainties with respect to the interpretation and enforcement of PRC laws and regulations, and changes in policies, law and regulations in the PRC could adversely affect us.

We conduct our business primarily through our subsidiaries and consolidated variable interest entities in China. Our operations in China are governed by PRC laws and regulations. Our subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes. Unlike the common law system, Prior court decisions may be cited for reference but have limited precedential value. PRC legislation and regulations have gradually enhanced the protections afforded to various forms of foreign investments in China. However, recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to a significant degree of interpretation by PRC regulatory agencies and courts.. In particular, because these laws and regulations are relatively new and quickly evolving, and because of the limited number of published decisions and the non-precedential nature of these decisions, and because the laws and regulations often give the relevant legislator certain discretion in how to enforce them, the interpretation and enforcement of these laws, and regulations involve uncertainties., the interpretation and enforcement of the laws and regulations involve uncertainties. Therefore, it is possible that our existing operations may be found not to be in full compliance with relevant laws and regulations in the future.

Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have certain discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of administrative and court proceedings and the level of legal protection than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business, financial condition and results of operations. In addition, the PRC government has significant influence over business activities and, to further regulatory and societal goals, has become more involved in regulating China-based companies, including us. For example, in recent years the PRC government, has enhanced regulation in areas such as anti-monopoly, anti-unfair competition, cybersecurity and data privacy. In addition, the PRC government has also published policies that significantly affected the Internet industries and certain other industries, including industries that we operate in, and in the future it may implement other policies or regulations that may have a significant adverse impact on us or industries that we operate in.

Moreover, the PRC government has strengthened the administration over illegal securities activities and the supervision on overseas listings by China-based companies and issued new filing obligations and approval requirements in connection with offshore offerings. The government may further promulgate relevant laws and regulations that may impose additional and significant obligations and liabilities on Chinese companies. These laws and regulations can be complex and stringent, and many are subject to change and uncertain interpretation, which could result in claims, change to our data and other business practices, regulatory investigations, penalties, increased cost of operations, or declines in user growth or engagement, or otherwise affect our business. It is uncertain whether or how these new laws and regulations and the interpretation and implementation thereof may affect us, but among other things, our ability and the ability of our subsidiaries to obtain external financing through the issuance of equity securities overseas could be negatively affected and as a result.

The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs.

We conduct our business primarily in China. Our operations in China are governed by PRC laws and regulations. The PRC government has significant oversight over the conduct of our business, and may intervene or influence our operations, which could result in a material adverse change in our operation and/or the value of our ADSs. The PRC government has recently published new policies that significantly affected certain industries and we cannot rule out the possibility that it will in the future release regulations or policies that directly or indirectly affect our industry or require us to seek additional permission to continue our operations, which could also result in a material adverse change in our operation and/or the value of our ADSs. Therefore, investors of our company and our business face potential uncertainty from actions taken by the PRC government affecting our business.

The discontinuation of any of the preferential tax treatments currently available to us in China could materially and adversely affect our financial condition and results of operations.

In March 2007, the National People’s Congress of China enacted the PRC Enterprise Income Tax Law (the “New EIT Law”), which became effective on January 1, 2008 and was amended in February 2017 and December 2018. In April 2008, the relevant PRC governmental authorities issued the Administrative Measures for Certification of High and New Technology Enterprises which was amended in January 2016. “High and new technology enterprises” would be entitled to a statutory tax rate of 15.0%. Currently, three of our PRC subsidiaries or consolidated controlled entities are qualified as “high and new technology enterprises”, and another our PRC subsidiary (i.e. Beijing Technology) is on the process of applying for renewing of this qualification. We cannot assure you that our PRC subsidiaries or consolidated controlled entities will continue to be entitled to preferential tax rates as qualified “high and new technology enterprises” under the New EIT Law. We also cannot assure you that the tax authorities will not, in the future, discontinue any of our preferential tax treatments, potentially with retroactive effect. In the event that preferential tax treatment for any of our subsidiaries or consolidated controlled entities is discontinued, the affected entity will become subject to a 25.0% standard enterprise income tax rate, which would increase our income tax expenses and could materially reduce our net income and profitability. See also “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Components of our Results of Operations—Taxation—China” of this annual report.

We may be treated as a resident enterprise for PRC tax purposes under the New EIT Law and therefore be subject to PRC taxation on our worldwide income.

We are incorporated under the laws of the Cayman Islands. Under the New EIT Law and its implementation rules, an enterprise incorporated in a foreign country or region may be classified as either a “non-resident enterprise” or a “resident enterprise.” If any enterprise incorporated in a foreign country or region has its “de facto management bodies” located within the PRC territory, such enterprise will be considered a PRC tax resident enterprise and thus will normally be subject to enterprise income tax at the rate of 25.0% on its worldwide income. The relevant implementing rules provide that “de facto management bodies” means the bodies which exercise substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties and other factors of an enterprise. In April 2009, the SAT issued the Notice Regarding the Determination of Chinese-Controlled Offshore-Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies (“Circular 82”), which sets forth certain specific criteria for determining whether the “de facto management body” of a Chinese-controlled offshore-incorporated enterprise is located in China. However, Circular 82 only applies to offshore enterprises controlled by PRC enterprises and not those controlled by PRC individuals or foreigners in China, such as our company. See “Item 10.D. Additional Information—Exchange Controls—Regulations relating to Foreign Exchange, Taxation and Dividend Distribution—Taxation and Dividend Distribution” of this annual report. Substantially all of the members of our management are currently located in China and we expect them to continue to be located in China. Due to the lack of clear guidance on the criteria pursuant to which the PRC tax authorities will determine our tax residency under the New EIT Law, it remains unclear whether the PRC tax authorities will treat us as a PRC resident enterprise. As a result, our PRC legal counsel is unable to express an opinion as to the likelihood that we will be subject to the tax applicable to resident enterprises or non-resident enterprises under the New EIT Law. If we are deemed to be a PRC tax resident enterprise, we will be subject to an enterprise income tax rate of 25.0% on our worldwide income, which would have an impact on our effective tax rate and an adverse effect on our net income and results of operations. The New EIT Law provides that dividend income between qualified resident enterprises is exempt income, which the implementing rules have clarified to mean a dividend derived by a resident enterprise on an equity interest it directly owns in another resident enterprise. It is possible, therefore, that dividends we receive through our offshore subsidiaries from our PRC subsidiaries, would be exempt income under the New EIT Law and its implementing rules if our offshore subsidiaries are deemed to be a “resident enterprise.” If we are deemed to be a PRC tax resident enterprise, we would then be obliged to withhold PRC withholding income tax on the gross amount of dividends we pay to shareholders who are non-PRC tax residents. The withholding income tax rate is 10.0% for non-resident enterprises and 20.0% for non-resident individuals, unless otherwise provided under the applicable double tax treaties between China and the governments of other jurisdictions.

We rely primarily on dividends and other distributions on equity paid by our subsidiaries, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business as well as our liquidity.

As a holding company, we rely primarily on dividends and other distributions on equity paid by our subsidiaries for our cash and financing requirements, which include funds necessary to pay dividends and other cash distributions to our shareholders, service any debt we may incur and to pay our operating expenses. If our subsidiaries incur debt in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us.

Our subsidiaries are primarily entities incorporated and established in China and therefore, are subject to certain limitations with respect to dividend payments. PRC regulations currently allow payment of dividends only out of accumulated profits determined in accordance with accounting standards and regulations in China. Each year, our subsidiaries in China and our consolidated controlled entities are required to allocate a portion of their after-tax profits to their respective reserve funds, until the reserves reach 50.0% of their respective registered capital. Allocations to these reserves and funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Such restrictions on the ability of our subsidiaries and consolidated controlled entities to transfer funds to us could adversely limit our ability to grow, pay dividends, make investments or acquisitions that could benefit our businesses or otherwise fund and conduct our businesses.

Under the relevant PRC tax law applicable to us prior to January 1, 2008, dividend payments to foreign investors made by foreign-invested enterprises were exempted from PRC withholding tax. However, under the New EIT Law and its implementing rules, non-resident enterprises without an establishment in China, or whose income has no connection with their institutions and establishment inside China, are subject to withholding tax at the rate of 10.0% with respect to their PRC-sourced dividend income, subject to applicable tax agreements or treaties between the PRC and other tax jurisdictions. Similarly, any gains realized on the transfer of shares by such investors are also subject to a 10.0% PRC income tax if such gains are regarded as income from sources within China.

According to the Mainland and Hong Kong Special Administrative Region Arrangement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the “Avoidance of Double Taxation Arrangement”), dividends derived by a Hong Kong resident enterprise from a PRC resident enterprise are subject to withholding tax at the rate of 5.0%, provided that such Hong Kong resident enterprise directly owns at least 25.0% of the equity interest in the PRC resident enterprise. However, under the New EIT Law and its implementation rules, as well as Circular No. 9 issued by SAT in February 2018 (“Circular 9”), dividends from our PRC subsidiaries paid to us through our Hong Kong subsidiaries may be subject to withholding tax at a rate of 10.0% if our Hong Kong subsidiaries cannot be considered as a “beneficial owner” or the main purpose test clause of Avoidance of Double Taxation Arrangement may apply to us.

We hold equity interests in several of our major PRC subsidiaries indirectly through subsidiaries incorporated in Hong Kong. Neither we nor our PRC legal counsel is certain as to whether it is more likely than not that PRC tax authorities would require or permit our Hong Kong-incorporated subsidiaries to be treated as PRC resident enterprises. To the extent that such Hong Kong-incorporated subsidiaries are each considered a “non-resident enterprise” under the Avoidance of Double Taxation Arrangement, dividends derived by such Hong Kong-incorporated subsidiaries from our PRC subsidiaries may be subject to a maximum withholding tax rate of 10.0%. See “Item 10.D. Additional Information—Exchange Controls—Regulation relating to Foreign Exchange, Taxation and Dividend Distribution—Taxation and Dividend Distribution” of this annual report.

The discontinuation of the previously available exemption from withholding tax as a result of the New EIT Law and its implementing rules have and will increase our income tax expenses and reduce our net income, and may materially reduce our profitability.

PRC regulations on loans to PRC entities by offshore holding companies may affect our ability to capitalize or otherwise fund our PRC operations.

On August 29, 2008, SAFE promulgated the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign Invested Enterprises (“SAFE Circular 142”), regulating the conversion by a foreign-invested enterprise of foreign currency registered capital into RMB by restricting how the converted RMB may be used. SAFE Circular 142 provides that the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for equity investments within China. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of a foreign-invested company. The use of such RMB capital may not be altered without SAFE approval, and such RMB capital may not in any case be used to repay RMB loans if the proceeds of such loans have not been used. Violations of SAFE Circular 142 could result in severe monetary or other penalties.

On March 30, 2015, SAFE promulgated the Circular on the Reform of Administration of the Payment and Settlement of Foreign Currency Capital of Foreign Invested Enterprises (“SAFE Circular 19”), which became effective on June 1, 2015. SAFE Circular 19 abolishes the SAFE Circular 142, providing that the RMB capital converted from foreign currency registered capital of a foreign-invested enterprise shall be used for purposes within its approved business scope, and allows a foreign-invested enterprise to use the RMB capital converted from its foreign currency registered capital for equity investments within China. However, such converted RMB capital still cannot be used to repay RMB loans between enterprises under SAFE Circular 19. However, the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (“SAFE Circular 16”) implemented in June 2016 removes the prohibition of using the RMB capital converted from foreign currency registered capital to repay RMB loans between enterprises.

On October 23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting Cross-border Trade and Investment Facilitation, which amended by the SAFE Circular on Further Promoting and reforming Cross-border Trade and Investment Facilitation promulgated on 4 December 2023, regulating the reforming measures on the registration management of corporate foreign loans, including (1) canceling the management requirement for a non-bank debtor to conduct foreign debt deregistration with a local foreign exchange bureau and replacing with a bank within the jurisdiction of the foreign exchange management department, (2) canceling the time limit for a non-bank debtor conducting foreign debt deregistration, and (3) conducting the pilot cancelation of foreign debt registration of non-financial enterprises.

In light of the various requirements imposed by PRC regulations on loans to PRC entities by offshore holding companies, we may not be able to obtain the necessary government approvals with respect to future loans by us to our wholly-owned subsidiaries or consolidated controlled entities or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

We may be subject to fines and legal or administrative sanctions in connection with certain historical intra-group funding transactions.

We have occasionally engaged in intra-group funding transactions, including dividend distributions from our consolidated controlled entities and payment advances made by one subsidiary on behalf of another. These transactions are typically deemed as non-interest-bearing loans and receivables from the relevant “debtors.”

Pursuant to the General Lending Code implemented in August 1996 by the PBOC, the central bank of China, commercial lending in China must be made by or through a PRC-qualified financial institution as defined under the General Lending Code. As none of the payors in our intra-group transactions is or was at the relevant time a PRC qualified financial institution as defined under the General Lending Code, the PBOC may impose a fine for non-compliance on each of the payors in an amount equal to one to five times the value of any income received from its non-compliance, and the payors may be required to terminate such loans. The Supreme People’s Court issued the Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law in the Trial of Private Lending Cases (the “Provisions”) on August 6, 2015 and amended on August 19, 2020 and Decemeber 29, 2020, which provide that if the purpose of a lending contract concluded between two enterprises is for their business operation, and the lending contract does not contain the circumstances as stipulated in Article 52 of the PRC Contract Law and Article 14 of the Provisions, i.e., those that will result in contracts being null and void, the people’s court shall consider such lending contract to be effective. As the General Lending Code has not been repealed and the Provisions were issued by the Supreme People’s Court as guidance for courts’ trial in private lending cases, it remains uncertain how the General Lending Code will be interpreted and implemented. If the PBOC and/or other governmental authorities decide to apply the General Lending Code and thereby instruct the payors to terminate such transactions, we have to fully repay the funds advanced in such transactions.

Moreover, pursuant to the PRC Foreign Currency Administration Regulations promulgated by the State Council in January 1996, and amended in August 2008, a PRC entity is required to apply for SAFE approval prior to extending commercial loans to offshore entities such as our company. As there is no specific definition of “commercial loans” under the Foreign Currency Administration Regulations and PRC governmental authorities have not issued any implementation rules with respect to the provision of commercial loans to offshore entities, it is not clear whether such provision will be applied to the non-interest bearing loans described above. Under the Foreign Currency Administration Regulations, an entity may be required to correct the violation and be subject to a warning and/or a fine for the violation of the foreign registration administrative regulations. If SAFE determines that the PRC Foreign Currency Administration Regulations do apply to us, it may require us to register the deemed overseas loans and rectify any prior non-compliance by properly obtaining SAFE approval. SAFE may also impose a warning and/or fine based on the PRC Foreign Currency Administration Regulations. We cannot assure you that we will be able to complete the necessary registration and filing procedures required by the PRC Foreign Currency Administration Regulations. In addition, it is not clear whether SAFE may consider the making of payments in Renminbi which should have been made in foreign currency to be foreign currency arbitrage, which may be deemed a violation and may subject a violator to warnings, penalties or other sanctions. Due to a general uncertainty over the interpretation and implementation of the PRC Foreign Currency Administration Regulations as well as the broad enforcement discretion granted to SAFE, we cannot assure you that we will not be subject to such warnings, penalties or other administrative penalties resulting from our intra-group transactions that may be deemed as overseas loans.

According to the New EIT Law, loan arrangements between related parties without interest are not considered arms-length transactions. Therefore, the PRC taxation authorities could impose enterprise income and VAT on the payors for the deemed interest income that would have been derived from our intra-group transactions. The deemed interest rate would be determined by reference to the lending rate over the relevant period published by the PBOC. We cannot assure you that we will not be subject to fines, or legal or administrative sanctions as a result of non-compliance with the General Lending Code and the Foreign Currency Administration Regulations. Further, we cannot assure you that the PRC taxation authorities will not impose enterprise income and VAT taxes on the payors for any deemed interest income with respect to our intra-group transactions. Because the applicable PRC laws, rules and regulations do not provide clear definitions for several key terms and because the relevant PRC regulatory authorities have significant discretion on the interpretation of such matters, we cannot predict the likelihood that the risks described here will materialize.

Government control of currency conversion may limit our ability to utilize our revenues effectively.

Substantially all of our revenues and operating expenses are denominated in Renminbi. Under applicable PRC law, the Renminbi is freely convertible to foreign currencies with respect to “current account” transactions, but not with respect to “capital account” transactions. Current account transactions include ordinary course import or export transactions, payments for services rendered and payments of license fees, royalties, interest on loans and dividends. Capital account transactions include cross-border investments and repayments of the principal of loans.

Accordingly, our PRC subsidiaries currently may purchase foreign currencies for settlement of current account transactions, including payment of dividends to us, without prior SAFE approval by complying with certain procedural requirements. However, we cannot assure you that the relevant PRC governmental authorities will not limit or eliminate the ability of our PRC subsidiaries to purchase and retain foreign currencies in the future. Foreign exchange transactions under the capital account are still subject to limitations and require approvals from or registration with relevant government authorities or pilot banks. This could affect our PRC subsidiaries’ ability to obtain debt or equity financing from outside China, including by means of loans or capital contributions from us.

Since substantially all of our revenues are denominated in Renminbi, including fees and payments from our PRC consolidated controlled entities pursuant to the Structure Contracts, existing and future restrictions on currency exchange may limit our ability to utilize revenues generated in Renminbi to fund expenditures denominated in foreign currencies, including any dividends that our PRC subsidiaries may pay to us in the future.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles (“SAFE Circular 37”) on July 4, 2014, which replaced the former circular commonly known as Circular 75 promulgated by SAFE on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” Pursuant to SAFE Circular 37, “control” refers to the act through which a PRC resident obtains the right to carry out business operation of, to gain proceeds from or to make decisions on a special purpose vehicle by means of, among others, shareholding entrustment arrangement. SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiaries. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015.

We are aware that Mr. Vincent Tianquan Mo, controlling shareholder of Fang and a PRC resident, has not completed the registration as of the date of this annual report. We have notified all PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations. However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. As a result, we cannot assure you that all of our shareholders or beneficial owners who are PRC residents or entities have complied with, and will in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.

The approval of and/or report and filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing and reporting obligations.

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. The interpretation and application of the regulations remain unclear, and our historical and future offshore offerings may ultimately require approval of the CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would restrict our ability to raise funds, subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.

On December 27, 2021, the NDRC and Ministry of Commerce jointly issued the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), which became effective on January 1, 2022. Pursuant to these administrative measures, if a domestic company engaging in the prohibited business stipulated in the negative list seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities. Besides, the foreign investors of the company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the regulations on the domestic securities investments by foreign investors. As the negative list is relatively new, there remain substantial uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements. If we are required to comply with these requirements and fail to do so on a timely basis, if at all, our business operation, financial conditions, business prospect and ability of financing, may be adversely and materially affected.

On February 17, 2023, the CSRC released the Overseas Listing Trial Measures and five supporting guidelines, which came into effect on March 31, 2023. According to the Overseas Listing Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report their information to the CSRC; if a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. If the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (iii) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.

On the same day, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that the domestic companies that have already been listed overseas on or before the effective date of the Overseas Listing Trial Measures (i.e., March 31, 2023) shall be deemed as existing issuers. These existing issuers are not required to complete the filling procedures, and they shall be required to file with the CSRC when subsequent matters such as refinancing are involved.

According to the Overseas Listing Trial Measures, an overseas listed company shall file with the CSRC within three business days after the completion of its subsequent securities offering on the same market, and an overseas listed company shall file with the CSRC within three business days after its application of its offering and listing on a different market. If an overseas listed company purchase PRC domestic assets through a single or multiple acquisitions, share swaps, shares transfers or other means, and such purchase constitutes direct or indirect listing of PRC domestic assets, a filing with the CSRC is also required. In addition, an overseas listed company is required to report to the CSRC the occurrence of any of the following material events within three business days after the occurrence and announcement thereof: (i) a change of control of the listed company; (ii) the investigation, sanction or other measures undertaken by any foreign securities regulatory agencies or the competent authorities in respect of the listed company; (iii) a change of listing status or transfer of listing segment; and (iv) the voluntary or mandatory delisting of the listed company. If there is any material change of the principal business of the listed company after the overseas offering and listing so that the listed company is no longer required to file with the CSRC, it shall file a specific report and a legal opinion issued by a domestic law firm to the CSRC within three business days after the occurrence hereof.

In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us or otherwise tightening the regulations on companies with a variable interest entity structure. If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for Cybersecurity Review and Network Data Security Management Regulation, are required for our offshore offerings or delisting arrangements, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing and reporting procedures and any such approval, filing or report could be rescinded or rejected. Any failure to obtain or delay in obtaining such approval or completing such filing and reporting procedures for our offshore offerings and delisting arrangements, or a rescission of any such approval or filing if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered, or to change our current delisting arrangements. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our securities.

Regulations in China may make it more difficult for us to pursue growth through acquisitions.

On August 8, 2006, six PRC regulatory agencies jointly promulgated the Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the “M&A Rules”), which became effective on September 8, 2006 and was amended on June 22, 2009. The M&A Rules and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council on August 3, 2008 and was amended on September 18, 2018, are triggered. According to the Notice regarding the Establishment of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council in February 2011 and the Implementing Rules Concerning Security Review on the Mergers and Acquisitions by Foreign Investors of Domestic Enterprises issued by MOFCOM in August 2011, mergers and acquisitions by foreign investors involved in an industry related to national security are subject to strict review by MOFCOM. These rules also prohibit any transactions attempting to bypass such security review, including by controlling entities through contractual arrangements. We believe that our business is not in an industry related to national security. However, we cannot preclude the possibility that MOFCOM or other government agencies may publish interpretations contrary to our understanding or broaden the scope of such security review in the future. Although we have no current plans to make any acquisitions, we may elect to grow our business in the future in part by directly acquiring complementary businesses in China. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining any required MOFCOM approvals, may delay or inhibit our ability to complete such transactions.

We may be subject to fines and legal or administrative sanctions if we or our PRC citizen employees fail to comply with PRC regulations with respect to the registration of such employees’ share options and restricted share units.

In February 2012, SAFE promulgated the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company (the “Stock Option Rule”). Under the Stock Option Rule, a Chinese entity’s directors, supervisors, senior management officers, other staff, or individuals who have an employment or labor relationship with such Chinese entity and who are granted stock options by an overseas publicly listed company are required, through a PRC agent or PRC subsidiary of such overseas publicly listed company, to register with SAFE and complete certain other procedures. Our local employees who have been granted stock options are subject to these regulations. We have designated our relevant PRC subsidiaries to handle the registration and other procedures required by the Stock Option Rule. If we or our PRC option holders fail to comply with these rules, we and our PRC option holders may be subject to fines and other legal or administrative sanctions. See “Item 4.B. Information on the Company—Business Overview—Regulation—Regulations relating to Employee Share Options” of this annual report.

We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.

On February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises (“Public Notice 7”). According to Public Notice 7, where a non-resident enterprise investor transfers taxable assets through the offshore transfer of a foreign intermediate holding company, the non-resident enterprise investor, being the transfer, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC withholding tax at the rate of up to 10.0%. In addition, Public Notice 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Public Notice 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may re-characterize such indirect transfer as a direct transfer of the equity interests in the PRC tax resident enterprise and other properties in China. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of up to 10.0% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

Pursuant to the Notice on Issues Relevant to Withholding of Non-PRC Resident Enterprises Income Tax at Source (“SAT Circular 37”) issued by the SAT, which became effective as of December 1, 2017, transferees are subject to filing obligations and withholding obligations. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

We face uncertainties with respect to the reporting and consequences of private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises, or sale or purchase of shares in other non-PRC resident companies or other taxable assets by us. Our company and other non-resident enterprises in our group may be subject to filing obligations or being taxed if our company and other non-resident enterprises in our group are transferors in such transactions, and may be subject to filling obligations and withholding obligations if our company and other non-resident enterprises in our group are transferees in such transactions, under SAT Circular 37 and Public Notice 7. For the transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiaries may be subject to filing obligations and withholding obligations under SAT Circular 37 and Public Notice 7. As a result, we may be required to expend valuable resources to comply with SAT Circular 37 and Public Notice 7 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company and other non-resident enterprises in our group should not be taxed under these circulars. The PRC tax authorities have the discretion under SAT Circular 37 and Public Notice 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. If the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 37 and Public Notice 7, our income tax costs associated with such transactions will be increased, which may have an adverse effect on our financial condition and results of operations. We have made acquisitions in the past and may conduct additional acquisitions in the future. We cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing obligations on us or require us to provide assistance to them for the investigation of any transactions we were involved in. Heightened scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.

Our ADSs or Ordinary Shares may be delisted under the Holding Foreign Companies Accountable Act (“HFCA Act”) if the PCAOB is unable to adequately inspect audit documentation located in China. The delisting of our ADSs or Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct adequate inspections deprives our investors from the benefits of such inspections. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was enacted on December 29, 2022 under the Consolidated Appropriations Act 2023, amends the HFCA Act and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such ordinary shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was enacted on December 29, 2022 under the Consolidated Appropriations Act 2023, amends the HFCA Act and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize the interim final rules previously adopted in March 2021 to implement the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction.

On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China, because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. The PCAOB has made such designations as mandated under the HFCA Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. On August 26, 2022, the PCAOB signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control. The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. Therefore, the PCAOB may in the future determine that it is unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong.

Our current auditor, GGF CPA LTD, the independent registered public accounting firm that issues the audit report included in this annual report on Form 20-F, as a firm registered with the PCAOB (PCAOB ID: 2729), is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. GGF, whose audit report is included in this report, is headquartered in Guangzhou, China, and, as of the date of this annual report, was not included in the list of PCAOB Identified Firms in the Determination Report. Recent developments create uncertainty as to the PCAOB’s continued ability to conduct inspections of our independent accounting firm GGF.

However, our auditor’s working papers related to us and the consolidated VIE and its subsidiary are located in China. If our auditor is not permitted to provide requested audit work papers located in China to the PCAOB, investors would be deprived of the benefits of PCAOB’s oversight of our auditor through such inspections which could result in limitation or restriction to our access to the U.S. capital markets, and trading of our securities may be prohibited under the HFCAA, which would result in the delisting of our securities from U.S. stock exchange.

Although our independent registered public accounting firm is registered with the PCAOB and currently subject to periodic PCAOB inspection, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors would be deprived of the benefits of such inspection and our ADSs may be prohibited from trading.

We have appointed GGF for the audit of our consolidated financial statements since the fiscal year ended December 31, 2019. GGF is a accounting firm that is registered with the PCAOB and can be inspected by the PCAOB. KPMG Huazhen LLP was our predecessor auditor and audited our consolidated financial statements for the fiscal years 2018 to 2019. The audit work by KPMG Huazhen LLP related to our operations in China was not inspected by the PCAOB.

GGF is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. There is no guarantee, however, that our current auditors or any future auditor engaged by us would remain subject to full PCAOB inspection during the entire term of our engagement.

The PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities. Since we have substantial operations in China, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.

Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or ADSs from being traded in the over-the-counter trading market in the United States.

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOBwas unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. As of the date of this annual report, GGF was not identified in this report as a firm subject to the PCAOB’s determination. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the HFCAA, our securities would be prohibited from being traded in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. If that happens and we are unable or have not yet listed on a non-U.S. exchange and a market does not develop outside of the United States, your ability to sell or purchase our securities when you wish to do so would be substantially impaired, which would have a negative impact on the price of our securities. Also, these circumstances would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

Fluctuations in the exchange rates of the Renminbi could materially and adversely affect the value of our shares, ADSs or notes and result in foreign currency exchange losses.

Substantially all of our revenues, costs and expenses, are denominated in Renminbi, and the functional currency of our principal operating subsidiaries and consolidated controlled entities is the Renminbi. On the other hand, a portion of our expenditures are denominated in foreign currencies, primarily the U.S. dollar, and we use the U.S. dollar as our reporting currency. The ADSs are also denominated in U.S. dollars. As a result, the value of your investment in our ADSs or notes will be affected by fluctuations in exchange rates, particularly appreciation or depreciation in the value of the Renminbi relative to the U.S. dollar and other foreign currencies, without giving effect to any underlying change in our business or results of operations.

The exchange rates between the Renminbi and the U.S. dollar and other foreign currencies are affected by, among other things, changes in China’s political and economic conditions. In July 2005, the PRC government discontinued pegging the Renminbi to the U.S. dollar. However, the PBOC regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate. Between July 2008 and June 2010, the exchange rate between the Renminbi and the U.S. dollar had been stable and traded within a narrow range. However, the Renminbi fluctuated significantly during that period against other freely traded currencies, in tandem with the U.S. dollar. Since June 2010, the Renminbi had started to slowly appreciate against the U.S. dollar, though there have been periods when the U.S. dollar has appreciated against the Renminbi. On August 11, 2015, the PBOC allowed the Renminbi to depreciate by approximately 2% against the U.S. dollar. Since October 1, 2016, the Renminbi has joined the International Monetary Fund (IMF)’s basket of currencies that make up the Special Drawing Right (SDR), along with the U.S. dollar, the Euro, the Japanese yen and the British pound. In the fourth quarter of 2016, the Renminbi has depreciated significantly in the backdrop of a surging U.S. dollar and persistent capital outflows of China. While appreciating approximately by 7% against the U.S. dollar in 2017, the Renminbi in 2018 depreciated approximately by 5% against the U.S. dollar. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.

There remains significant international pressure on the PRC government to adopt a flexible currency policy. Any significant appreciation or depreciation of the Renminbi may materially and adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our ADSs in U.S. dollars. For example, to the extent that we need to convert U.S. dollars we receive from offshore financing transactions into Renminbi to pay our operating expenses, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, a significant depreciation of the Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the price of our ADSs. Fluctuations in the exchange rate will also affect the relative value of any dividend we declare and distribute that will be exchanged into U.S. dollars and earnings from and the value of any U.S. dollar-denominated investments we make in the future. To the extent that we need to convert future financing proceeds into Renminbi for our operations, any appreciation of the Renminbi against the relevant foreign currencies would materially reduce the Renminbi amounts we would receive from the conversion. On the other hand, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments of dividends on our shares or for other business purposes when the U.S. dollar appreciates against the Renminbi, the amounts of U.S. dollars we would receive from such conversion would be reduced. In addition, any depreciation of our U.S. dollar-denominated monetary assets could result in a charge to our income statement and a reduction in the value of our assets.

In addition, very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedging transactions may be limited and we may not be able to successfully hedge our exposure at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency.You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws against us or our management.

We are an exempted company incorporated under the laws of the Cayman Islands. We conduct our operations in China and substantially all of our assets are located in China. In addition, certain of our directors and executive officers reside in China, and most of the assets of these persons are located within China. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these directors and executive officers, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Our PRC legal counsel has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. Currently, there are no treaties between the United States and China for the recognition or enforcement of U.S. court judgments in China. As a result, recognition and enforcement in China of judgments of a court in the United States or any other jurisdiction in relation to any matter not subject to a binding arbitration agreement may be difficult. Pursuant to the PRC Civil Procedure Law, any matter, including matters arising under U.S. federal securities laws, in relation to assets or personal relationships may be brought as an original action in China, only if the institution of such action satisfies the conditions specified in the PRC Civil Procedure Law. As a result of the conditions set forth in the PRC Civil Procedure Law and the discretion of the PRC courts to determine whether the conditions are satisfied and whether to accept the action for adjudication, there remains uncertainty as to whether an investor will be able to bring an original action in a PRC court based on U.S. federal securities laws. In addition, in the event that foreign judgments contravene the basic principles of laws of China, endanger PRC state sovereignty or security, or are in conflict with the public interest of China, PRC courts will not recognize and enforce such foreign judgments.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct our operations primarily in China.

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Law (2020 Revision) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law 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 our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands have a less developed body of securities laws than the United States. Some states in the United States, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than our memorandum and articles of association, special resolutions of our shareholders and our register of mortgages and charges) or to obtain copies of lists of shareholders of these companies. Our directors have discretion to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. If we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

In addition, we conduct substantially all of our business operations in China, and substantially all of our directors and senior management are based in China. The SEC, U.S. Department of Justice and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China. Additionally, our public shareholders may have limited rights and few practical remedies in emerging markets where we operate, as shareholder claims that are common in the United States, including class action securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets, including China.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

Changes in international trade policies and rising political tensions, particularly between the U.S. and China, may adversely impact our business and operating results.

There have been changes in international trade policies and rising political tensions, particularly between the U.S. and China, but also as a result of the conflict in Ukraine, sanctions on Russia, the Hamas-Israel conflict and the attacks on shipping in the Red Sea. The U.S. government has made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies towards China. Against this backdrop, China has implemented, and may further implement, measures in response to the changing trade policies, treaties, tariffs and sanctions and restrictions against Chinese companies.

Rising trade and political tensions could reduce levels of trades, investments, technological exchanges and other economic activities between China and other countries, which would have an adverse effect on global economic conditions, the stability of global financial markets, and international trade policies. It could also adversely affect the financial and economic conditions in the jurisdictions in which we operate, as well as our overseas expansion, our financial condition, and results of operations. While cross-border business currently may not be an area of our focus, if we plan to expand our business internationally in the future, any unfavorable government policies on international trade or any restriction on Chinese companies may affect the consumer demands for our products and service, impact our competitive position, or prevent us from being able to conduct business in certain countries. In addition, our results of operations could be adversely affected if any such tensions or unfavorable government trade policies harm the Chinese economy or the global economy in general.

Risks related to our ADSs, ordinary shares and notes

The delisting of our ADSs from the New York Stock Exchange, or the NYSE, may continue to have a material adverse effect on the trading and price of our ADSs, and we cannot assure you that our ADSs will be relisted, or that once relisted, they will remain listed.

On June 2, 2022, the NYSE filed a Form 25 with the SEC to strike our ADSs from listing, which became effective 10 days after the filing. Our ADSs have been quoted on the OTC markets under the symbol “SFUNY” after the NYSE suspended the trading of our ADSs on May 18, 2022. The delisting of our ADSs from the NYSE has had a material adverse effect on us by, among other things, causing investors to dispose of our ADSs and limiting:

The lack of an active trading market may limit the liquidity of an investment in our ADSs, meaning you may not be able to sell our ADSs you own at times, or at prices, attractive to you. Any of these factors may materially and adversely affect the price of our ADSs.

The market price movement of our ADSs and notes may be volatile.

Our ADSs had been listed on the NYSE since our initial public offering in September 2010. On June 2, 2022, the NYSE filed a Form 25 with the SEC to strike our ADSs from listing, which became effective 10 days after the filing. Our ADSs have been quoted on the OTC markets under the symbol “SFUNY” after the NYSE suspended the trading of our ADSs on May 18, 2022. Our ADSs are currently quoted on the OTC Expert Market.

The OTC market is a significantly more limited market than NYSE. The quotation of our ADSs on the OTC market may result in a less liquid market available for existing and potential shareholders to trade our ADSs, could depress the trading price of our ADSs and could have a long-term adverse impact on our ability to raise capital in the future.

The market prices of our ADSs has been and may continue to be volatile and subject to wide fluctuations. The market prices of our notes may be volatile. Among the factors that could affect the prices of our ADSs and/or notes are risk factors described in this section and other factors, including:

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular industries or companies. For example, the capital and credit markets have experienced significant volatility and disruption in recent years. In September 2008, such volatility and disruption reached extreme levels and developed into a global crisis. As a result, stock prices of a broad range of companies worldwide, whether or not they were related to financial services, declined significantly. Future market fluctuations may also have a material adverse effect on the market prices of our ADSs and/or notes.

There can be no assurance that any agreement will be executed with respect to the proposal made by Mr. Jiangong Dai, or that this or any other transaction will be approved or consummated. The absence of a definitive offer to acquire our ADSs would likely have an effect on the market price of our ADSs and/or notes.

On September 4, 2023, we received a received a preliminary non-binding proposal letter (the “Proposal Letter”), dated September 4, 2023, from our chairman of the board of directors, Mr. Jiangong Dai (“Mr. Dai” or the “Proposing Buyer”), proposing to acquire all outstanding Class A ordinary shares and Class B ordinary shares of the Company, including Class A Shares represented by the ADSs, each Class A ordinary share representing ten ADSs, that are not currently owned by the Proposing Buyer in a “going-private” transaction at a proposed purchase price of US$0.619 per Class A Share or US$6.19 per ADS in cash (the “Proposal”).

On September 26, 2023, our board of directors formed a special committee of independent directors who are not affiliated with the Proposed Buyer (the “Special Committee”) to evaluate the Proposal. The Special Committee consists of Mr. Huyue Zhang, Mr. Shaohua Zhang and Mr. Changming Yan, each of whom currently serves as an independent director on the board. The Special Committee will carefully review the Proposal to determine the course of action it believes is in the best interests of the Company and its shareholders and other stakeholders. As of the date of this report, no decisions have been made by our Special Committee with respect to the Proposal.

The public announcement of the Proposal affected our stock price. There can be no assurance that any definitive agreement will be executed with respect to the Proposal or that this or any other transaction will be approved or consummated. The absence of a definitive offer to acquire our ADSs, or changes in the proposal would likely have an effect on the market price of our ADSs and/or notes.

We may need additional capital, and the sale of additional ADSs, convertible notes or other equity securities could result in additional dilution to our shareholders, while the incurrence of debt may impose restrictions on our operations.

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the foreseeable future. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue and the expansion of our financial services. If these resources are insufficient to satisfy our cash requirements, we may seek to sell equity or debt securities or obtain a credit facility. The sale of equity securities would result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations.

As Fang is an exempted company incorporated in the Cayman Islands and not listed on any stock exchange, its corporate governance practices may differ significantly from those of companies incorporated in Delaware or other states in the United States or those of companies listed on a stock exchange, and these practices may afford less protection to shareholders.

Fang is an exempted company incorporated under the laws of the Cayman Islands and not currently listed on any stock exchange. As a Cayman Islands company, Fang’s corporate affairs are governed by its memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, but does not follow recent English statutory enactments.

Furthermore, as Fang is not currently listed on any stock exchange, Fang is not subject to any listing rules or listing standards. To the extent that Fang continues to follow the NYSE corporate governance listing standards that were previously applicable to it, Fang may stop following any or all of those listing standards at any time at the discretion of its board of directors or management, as the case may be. Fang has followed the corporate governance practice in our home country, the Cayman Islands, which does not require a majority of our board to consist of independent directors or that we have annual meetings to elect directors. We currently have an audit committee comprised of independent directors, a compensation committee with one non-independent director and a nominating and corporate governance committee with one non-independent director. As a result, Fang’s corporate governance practices may afford shareholders less protection than they would otherwise enjoy as shareholders of companies incorporated in Delaware or other states in the United States or under the corporate governance listing standards of the NYSE, the Nasdaq Stock Market or other stock exchanges.

As a foreign private issuer, we are exempt from certain disclosure requirements under the Exchange Act, which may afford less protection to our shareholders than they would enjoy if we were a U.S. company.

As a foreign private issuer, we are exempt from, among other things, the rules prescribing the furnishing and content of proxy statements under the Exchange Act. In addition, our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit and recovery provisions contained in Section 16 of the Exchange Act. We are also not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. As a result, our shareholders may be afforded less protection than they would under the Exchange Act rules applicable to U.S. companies.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price of our ADSs and trading volume could decline.

The trading market for our ADSs will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our ADSs or publishes inaccurate or unfavorable research about our business, the market price of our ADSs would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our ADSs to decline.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement.

A holder of our ADSs may only exercise the voting rights with respect to the underlying Class A ordinary shares in accordance with the provisions of the deposit agreement. Upon receipt of voting instructions of a holder of ADSs in the manner set forth in the deposit agreement and the restricted deposit agreement pursuant to which ADSs are issuable upon conversion of the notes, the depositary will endeavor to vote the underlying ordinary shares in accordance with these instructions. Under our amended and restated articles of association, the minimum notice period required for convening a general meeting is 7 calneder days. When a general meeting is convened, you may not receive sufficient notice to permit you to withdraw the underlying Class A ordinary shares represented by your ADSs and allow you to cast your vote as a direct shareholder with respect to any specific matter. In addition, the depositary and its agents may not be able to send voting instructions to you or carry out your voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, but we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, you may not be able to exercise your right to vote and you may lack recourse if the underlying Class A ordinary shares represented by your ADSs are not voted as you requested.

You may not be able to participate in rights offerings and may experience dilution of your holdings.

We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. We cannot offer or sell securities in the United States unless we register those securities under the Securities Act or unless an exemption from the registration requirements of the Securities Act is available. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the Securities Act. The depositary may, but is not required to, attempt to sell such undistributed rights to third parties in this situation. We can give no assurances that we will be able to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in any rights offerings and may experience dilution of their holdings as a result.

If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights.

You may not receive distributions on ordinary shares or any value for them if it is illegal or impractical to make them available to you.

The depositary for our ADSs has agreed to pay to you the cash dividends or other distributions it or its custodian receives on ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. For example, as of the date of this annual report, each ADS represents ten Class A ordinary share. However, the depositary is not required to make such distributions if it decides that it is unlawful or impractical to make a distribution available to any holder of ADSs. For example, it would be unlawful to make a distribution to holders of ADSs if it consisted of securities that required registration under the Securities Act, but were not properly registered or distributed pursuant to an applicable exemption from registration. It could also be impracticable to make a distribution if doing so would entail fees and expenses that would exceed the value of the distribution or the distribution consisted of property that could not be transported or transferred. We have not undertaken any obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities that may be distributed to our shareholders. We also have not undertaken any obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive any distribution we make on our ordinary shares or any value for it if it is illegal or impractical for us to make such distribution available to you, such as if an exemption from registration under the U.S. securities laws is not available. These restrictions may decrease the value of your ADSs.

We may be required to withhold PRC income tax on any dividend we pay you, and any gain you realize on the transfer of our ordinary shares and/or ADSs may also be subject to PRC withholding tax.

Pursuant to the New EIT Law, we and our offshore subsidiaries may be treated as a PRC resident enterprise for PRC tax purposes. See “—Risks related to doing business in China—We may be treated as a resident enterprise for PRC tax purposes under the New EIT Law and therefore be subject to PRC taxation on our worldwide income.” If we and our offshore subsidiaries are so treated by the PRC tax authorities, we would be obligated to withhold a 10.0% PRC withholding tax for non-resident enterprises or a 20.0% PRC withholding tax for non-resident individuals, or a withholding tax at a reduced rate as provided under the applicable double tax treaty between China and the governments of other jurisdictions on any dividend we pay to you, subject to completion of the record-filing procedures and approval from the relevant tax authorities, pursuant to a Circular No. 124 issued by SAT in August 2009 (“Circular 124”).

On November 1, 2015, Circular 124 was repealed by the Administrative Measures for Tax Convention Treatment for Non-resident Taxpayers issued by SAT (“Circular 60”). Circular 60 provides that non-resident taxpayers are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax rate. Instead, they may, upon self-assessment that the prescribed criteria are met, submit the relevant statements and materials directly to the competent tax authorities for the tax return filing, which will be subject to post-filing examinations by the relevant tax authorities.

Circular 60 was repealed by the Measures for Administration of Non-Resident Taxpayers’ Enjoyment of Treaty Benefits (“Circular 35”), which was promulgated by the SAT on October 14, 2019, and came into effect on January 1, 2020. According to the Circular 35, if non-resident taxpayers consider they are eligible for treatments under the tax treaties through self-assessment, they may, at the time of filing tax returns or making withholding tax filings through withholding agents, enjoy the treatments under the tax treaties, and shall concurrently collect and retain the relevant documents for inspection according to relevant regulations, and accept tax authorities’ post-filing administration.