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美國

證券交易委員會

華盛頓特區，20549

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形式 20-F

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(標記一)

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或

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或

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或

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委託文件編號：001-34862

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方控股有限公司

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(註冊人的確切姓名載於其章程)

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不適用

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(註冊人姓名英文譯本)

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開曼群島

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(註冊成立或組織的司法管轄權)

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A座20號 郭公莊中街

豐臺區, 北京 100070

中華人民共和國

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（主要行政辦公室地址）

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戴建軍，執行主席

A座20號 郭公莊中街

豐臺區, 北京 100070

中華人民共和國

電話：+86-10-5631 8000

傳真：+86-10-5631 8010

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(公司聯繫人姓名、電話、電子郵件和/或傳真號碼及地址)

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根據該法第12(B)節登記或將登記的證券：

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沒有一

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根據該法第12(G)條登記或將登記的證券：

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根據該法第15(D)節負有報告義務的證券：

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註明截至年度報告所述期間結束時發行人所屬各類資本或普通股的流通股數量：

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如果註冊人是《證券法》第405條定義的知名經驗豐富的發行人，則通過勾選標記進行驗證

☐是☒ 不是

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如果本報告是年度報告或過渡報告，請勾選標記表明註冊人是否無需根據1934年證券交易法第13或15（d）條提交報告

☐ 是的 ☒ 不是

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通過勾選標記標明註冊人是否（1）在過去12個月內（或在註冊人被要求提交此類報告的較短期限內）提交了1934年證券交易法第13或15（d）條要求提交的所有報告，並且（2）在過去90天內是否已遵守此類提交要求。

☐ 是 ☒ 不是

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通過勾選標記檢查註冊人是否已在過去12個月內（或在註冊人被要求提交此類文件的較短期限內）以電子方式提交了根據S-t法規第405條（本章第229.405條）要求提交的所有交互數據文件。

☐ 是 ☒ 沒有

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通過勾選標記來確定註冊者是大型加速文件夾、加速文件夾還是非加速文件夾。請參閱《交易法》第120億.2條規則中「大型加速備案人」、「加速備案人」和「新興成長公司」的定義。

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如果一家新興成長型公司根據美國公認會計原則編制財務報表，請通過勾選標記表明註冊人是否選擇不利用延長的過渡期來遵守根據《交易法》第13（a）條提供的任何新的或修訂的財務會計準則。 ☐

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†「新的或修訂的財務會計準則」是指財務會計準則委員會在2012年4月5日之後發佈的對其會計準則編纂的任何更新。

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通過勾選標記檢查註冊人是否已提交報告並證明其管理層根據《薩班斯-奧克斯利法案》（15 U.S.C.）第404（b）條對其財務報告內部控制有效性的評估7262（b））由編制或發佈審計報告的註冊會計師事務所執行。 ☐

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如果證券是根據該法第12(B)條登記的，應用複選標記表示登記人的財務報表是否反映了對以前發佈的財務報表的錯誤更正。☐

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通過勾選標記來驗證這些錯誤更正是否是需要根據§240.10D-1（b）對註冊人的任何高管在相關恢復期內收到的基於激勵的補償進行恢復分析的重述。 ☐

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用複選標記表示註冊人在編制本文件所包括的財務報表時使用了哪種會計基礎：

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如果在回答前一個問題時勾選了「其他」，請用複選標記表示登記人選擇遵循哪個財務報表項目：

☐ 項目17 ☐ 項目18

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如果這是一份年度報告，請用複選標記標明註冊人是否爲空殼公司(如《交易法》第12B-2條所定義)。

☐ 是的 ☒不是

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(只適用於過去五年涉及破產程序的發行人)

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在根據法院確認的計劃分配證券後，用複選標記表示註冊人是否已提交1934年《證券交易法》第12、13或15(D)條要求提交的所有文件和報告。

☐ 是的 ☐不是

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目錄

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引言

除文意另有所指外，並僅爲本年度報告表格20-F的目的：

本年度報告包括截至2020年、2021年和2022年12月止年度的經審計綜合收益（虧損）表、截至2020年、2021年和2022年12月31日的經審計綜合資產負債表、截至2020年止年度的經審計綜合股東權益表和經審計綜合現金流量表，2021年和2022年。

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前瞻性陳述

本年度報告包含涉及風險和不確定因素的前瞻性陳述。除歷史事實以外的所有陳述均爲前瞻性陳述。這些前瞻性陳述是根據「1995年美國私人證券訴訟改革法」的「安全港」條款作出的。這些表述涉及已知和未知的風險、不確定性和其他因素，可能導致我們的實際結果、業績或成就與前瞻性表述中明示或暗示的大不相同。

您可以通過「可能」、「將會」、「預期」、「預計將」、「預期」、「目標」、「估計」、「打算」、「計劃」、「相信」、「很可能」或其他類似的表達方式來識別這些前瞻性陳述。我們的這些前瞻性陳述主要基於我們目前對未來事件和財務趨勢的預期和預測，我們認爲這些事件和財務趨勢可能會影響我們的財務狀況、經營結果、業務戰略和財務需求。這些前瞻性陳述包括但不限於：

你應該仔細閱讀這份年度報告和我們在這份年度報告中提到的文件，並理解我們未來的實際結果可能與我們預期的大不相同，甚至更糟。我們通過這些警告性聲明來限定我們所有的前瞻性聲明。本年度報告的其他部分，包括題爲「風險因素」的部分，包括可能對我們的業務和財務業績產生不利影響的其他因素。此外，我們在一個不斷髮展的環境中運營。新的風險因素和不確定因素不時出現，我們的管理層無法預測所有風險因素和不確定因素，也無法評估所有因素對我們業務的影響，或任何因素或因素組合可能導致實際結果與任何前瞻性陳述中包含的結果大不相同的程度。

你不應該依賴前瞻性陳述作爲對未來事件的預測。除非法律要求，我們沒有義務更新或修改任何前瞻性陳述，無論是由於新信息、未來事件或其他原因。

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市場和行業數據

本年度報告中使用的市場數據和某些行業預測來自內部調查、市場研究、公開信息和行業出版物。行業出版物通常指出，其中包含的信息是從據信可靠的來源獲得的，但不保證此類信息的準確性和完整性。同樣，內部調查、行業預測和市場研究雖然被認爲是可靠的，但尚未經過獨立驗證，我們也不對此類信息的準確性做出任何聲明。

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第I部分

項目1.董事、高級管理人員和顧問的身份

不適用。

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第二項：報價統計和預期時間表

不適用。

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第三項：關鍵信息

我們的控股公司結構和與可變利益實體的合同安排

房天下不是一家中國運營公司，而是一家開曼群島控股公司，在可變利益實體中沒有股權。本公司主要透過我們在中國的全資附屬公司及中國的可變權益實體(包括可變權益實體及其附屬公司)進行業務。中國法律法規對互聯網行業的外商投資施加了限制和條件，廣告行業的行政實踐存在不確定性。因此，吾等透過可變權益實體經營所有業務，並依賴我們的中國附屬公司、可變權益實體及其股東之間的合約安排進行可變權益實體的業務運作。2020年、2021年和2022年，可變利息實體貢獻的收入分別佔我們總收入的68.3%、66.5%和66.1%。在本年報中使用的「我們」、「我們」、「我們的公司」和「我們的」是指房天下及其子公司。方的美國存託憑證持有人持有我們開曼群島控股公司房天下的股權；通過投資於方的美國存託憑證，他們不會，也可能永遠不會在中國的可變權益實體中擁有直接或間接權益。可變權益實體爲在中國開展業務的中國公司，其財務業績已根據美國公認會計原則綜合納入我們的綜合財務報表，以供會計之用。方是一家控股公司，沒有自己的業務。我們在可變權益實體中沒有任何股權。

一系列合同協議，包括獨家技術諮詢和服務協議、股權質押協議、經營協議、股東委託書協議、貸款協議和獨家看漲期權協議(統稱爲「結構合同」)。見“項目7.b.大股東及關聯方交易-關聯方交易-結構合同“是本年度報告的一部分。由於該等合約安排，吾等行使控制合併受控實體的能力，透過我們的權力指示合併受控實體的活動對其經濟表現有最重大影響，並有義務承擔合併受控實體的損失或享有可能對該等實體有重大潛在影響的所有剩餘利益。因此，我們將它們的結果合併到我們的財務報表中。根據美國公認會計原則進行會計處理。方及其投資者概無於該等可變權益實體擁有股權、外國直接投資或透過該等所有權或投資控制該等可變權益實體，而該等合約安排並不等同於擁有該等可變權益實體的業務的股權。關於這些合同安排的更多細節，見“項目4.關於C公司的信息。組織結構。

然而，在爲我們提供對可變利益實體的控制權方面，合同安排可能不如直接所有權有效，而且我們可能會產生執行安排條款的巨額成本。此外，這些協議還沒有在中國法院接受過考驗。見“項目3.關鍵信息--D。風險因素-與我們的公司結構相關的風險-我們依賴與北京拓天宇網絡技術有限公司(以下簡稱北京拓時)和天津嘉天夏網絡技術有限公司(以下簡稱加天夏網絡科技)、我們的全資中國子公司、它們的受控可變利益實體及其各自的股東的合同安排來進行我們的運營，這在提供運營控制方面可能不如直接所有權有效「和」-我們合併的受控實體的股東可能與我們存在潛在的利益衝突，如果任何此類利益衝突沒有以有利於我們的方式得到解決，我們的業務可能會受到實質性和不利的影響。

開曼群島控股公司Fang與可變權益實體及其股東的合約安排有關其權利地位的現行及未來中國法律、法規及規則的詮釋及應用亦存在重大不確定性。目前尚不確定是否會通過與可變利益實體結構有關的任何新的中國法律或法規，或者如果通過，它們將提供什麼。如果我們或任何可變利益實體被發現違反任何現有或未來的中國法律或法規，或未能獲得或維持任何所需的許可或批准，中國監管當局將有廣泛的酌情權採取行動處理該等違規或失敗行爲。見“項目3.關鍵信息--D。風險因素-與我們的公司結構相關的風險-如果中國政府確定爲我們的業務運營建立結構的結構合同不符合適用的中國法律、規則和法規，我們可能會受到嚴厲的處罰或被迫重組我們的所有權結構。和“項目3.關鍵信息--D。風險因素--與在中國做生意有關的風險--與我們目前的公司結構、公司治理和業務運營有關的新的或修訂的中國法律的採納存在很大的不確定性。“

我們的公司結構受到與可變利益實體的合同安排相關的風險的影響。如果中國政府認爲我們與可變權益實體的合同安排不符合中國對相關行業外國投資的監管限制，或者如果這些法規或現有法規的解釋在未來發生變化或被不同解釋，我們可能會受到嚴厲的懲罰或被迫放棄我們在該等業務中的權益。方圓、其中國附屬公司及可變權益實體及方方的投資者面對中國政府未來可能採取的行動的不確定性，該等行動可能會影響與可變權益實體的合約安排的可執行性，從而對可變權益實體及本公司整體的財務表現造成重大影響。中國監管當局可能不允許VIE結構，這可能會導致我們的業務發生重大變化，並導致我們的證券價值大幅下降或變得一文不值。有關與我們公司結構相關的風險的詳細說明，請參閱「項目3.主要信息-D」項下披露的所有風險。風險因素--與我們的公司結構相關的風險。

我們面臨着與在中國做生意相關的各種風險和不確定性。我們的業務運營主要在中國進行，我們受到複雜和不斷變化的中國法律法規的約束。例如，我們面臨與離岸發行的監管審批、反壟斷監管行動以及對網絡安全和數據隱私的監督相關的風險，以及中國政府與使用可變利益實體有關的監管和聲明，這些風險可能會影響我們開展某些業務、接受外國投資或在美國或其他外匯上市的能力。這些風險可能導致我們的業務和我們的美國存託憑證的價值發生重大不利變化，顯著限制或完全阻礙我們向投資者提供或繼續提供證券的能力，或導致此類證券的價值大幅縮水或變得一文不值。有關在中國經商的風險的詳細描述，請參閱「3.D.關鍵信息-風險因素-在中國經商相關風險」項下披露的風險。

中國政府在監管我們的業務方面的巨大權力，以及它對中國發行人進行的海外發行和外國投資的監督和控制，可能會顯著限制或完全阻礙我們向投資者提供或繼續提供證券的能力。實施全行業的法規，包括數據安全或反壟斷相關法規，在這種性質下可能會導致此類證券的價值大幅下降。更多細節見“項目3.關鍵信息--D。風險因素-與在中國做生意相關的風險-中國政府對我們業務運營的重大監督可能導致我們的業務和我們美國存託憑證的價值發生重大不利變化。“

中國的法律制度產生的風險和不確定性，包括與法律執行和中國快速發展的規章制度有關的風險和不確定性，可能會導致我們的業務和美國存託憑證的價值發生重大不利變化。更多細節見“項目3.關鍵信息--D。風險因素-與在中國做生意有關的風險-與中國法律制度有關的不確定因素可能對我們產生不利影響「，以及」-與我們目前的公司結構、公司治理和業務運營有關的新的或修訂的中國法律的解釋和實施存在重大不確定性“。

我們的運營需要獲得中國當局的許可

我們主要通過我們的子公司和中國的可變利益實體開展業務。我們在中國的業務受中國法律法規管轄。我們需要從各個監管部門獲得適用的許可證或批准，才能提供廣告和增值服務和產品。這些許可證或批准對我們的業務運營是必不可少的，通常要接受相關中國政府部門的年度審查。於本年報日期，北京搜房科技發展有限公司(「北京科技」)及北京世紀佳天霞科技發展有限公司(「北京金通科技」)均持有適用中國法律、規則及法規所規定的互聯網內容提供商牌照，而北京科技及北京金通科技均持有根據適用中國法律、規則及法規所規定的經營電子公告板服務的批准。允許北京佳天俠廣告有限公司(「北京廣告」)、上海世紀佳天俠互聯網科技發展有限公司(「上海世紀佳天下網絡」)及若干其他合併受控實體按照各自營業執照上註明的經營範圍提供營銷服務。

根據國家廣播電視總局發佈的有關規定，從事互聯網廣播活動的公司必須獲得國家廣播電視總局頒發的互聯網音像節目傳輸許可證，並按照許可證規定的範圍經營。我們的一些合併受控實體提供某些互聯網直播服務。已取得網絡文化產品展覽比賽互聯網文化經營許可證、藝術文化、娛樂、科技、財經、體育、教育等專業視聽節目製作互聯網視聽節目服務互聯網視聽節目傳輸許可證(不含採訪)、一般社會組織文化活動、體育賽事等組織活動的廣播服務、直播服務、廣播電視節目製作經營許可證。然而，由於現有和未來法律法規的解釋和實施存在不確定性，我們持有的許可證可能會被政府部門視爲不足，如果我們的行爲被認爲違反了相關法律法規，可能會受到相關監管機構的罰款或其他監管行動。

但是，我們可能需要獲得額外的許可證。具體情況請參看《第三項關鍵信息--D.風險因素--與本業務相關的風險--在中國互聯網業務和網絡廣告業務複雜的監管環境下，本公司未能取得或保持適用的許可證和審批，或未通過政府年檢或未獲得營業執照的續展，將對本公司的業務、財務狀況和經營業績造成重大不利影響。

此外，中國政府已表示有意對在海外和/或外國投資中國的發行人進行的發行施加更多監督和控制。就吾等過往向境外投資者發行證券而言，根據中國現行法律、法規及規則，截至本年度報告日期，吾等、吾等中國附屬公司及可變權益實體(I)尚未獲中國證監會或中國證監會批准或完成向證監會備案，(Ii)尚未獲中國證監會或中國證監會要求接受網絡安全審查，及(Iii)尚未獲得或尚未被證監會或中國證監會拒絕該等必要許可。根據我們中國法律顧問的建議，我們不認爲我們需要就我們之前的證券發行接受CAC的網絡安全審查。

2023年2月17日，證監會發布了《境內公司境外證券發行上市試行管理辦法》或《境外上市試行辦法》及五份配套指引，並於2023年3月31日起施行。根據《境外上市試行辦法》，境外上市公司應當在後續在同一市場完成證券發行後三個工作日內向中國證監會備案，境外上市公司應當在申請異地發行上市後三個工作日內向中國證監會備案。境外上市公司通過一次或多次收購、換股、股份轉讓等方式收購中國境內資產，構成中國境內資產直接或間接上市的，還須向中國證監會備案。此外，境外上市公司發生下列重大事項並予以公告後，應當在三個營業日內向中國證監會報告：(一)上市公司控制權變更；(二)境外證券監督管理機構或主管機關對上市公司採取的調查、處分或其他措施；(三)變更上市地位或轉移上市分部；(四)上市公司自願或強制退市。上市公司境外發行上市後，其主營業務發生重大變化，不再需要向中國證監會備案的，應當在事發後三個工作日內向中國證監會報送境內律師事務所出具的具體報告和法律意見書。同日，證監會還召開境外上市試行辦法發佈新聞發佈會，發佈《關於境內企業境外發行上市備案管理的通知》等明確，境外上市試行辦法生效日(即2023年3月31日)及之前已在境外上市的境內公司，視爲現有發行人。現有發行人無需完成填報手續，涉及再融資等後續事項時，需向證監會備案。

根據《關於境內公司境外發行上市備案管理的通知》，吾等的中國律師景天律師事務所告知吾等，根據現行有效的中國法律法規，吾等無需獲得中國證監會的許可或完成向中國證監會的備案。然而，由於境外上市試行辦法較新，《關於境內公司境外發行上市備案管理的通知》對現有發行人的申報義務沒有明確的指引或解釋，我們不能保證近期退市安排是否需要向中國證監會辦理申報手續。

如果(I)我們沒有收到或維持任何許可、批准或完成任何報告義務，(Ii)我們無意中得出結論認爲某些許可、批准已經獲得或不需要，或者某些報告義務已經完成或不需要，或者(Iii)適用的法律、法規或解釋發生變化，並且我們將來需要額外的許可、批准或報告義務，我們無法向您保證，我們將能夠及時獲得該等許可或批准或完成該報告義務，或者根本不能，即使獲得了該批准，該批准也可能被撤銷。任何此類情況都可能使我們受到處罰，包括罰款、暫停營業和吊銷所需的執照，這可能會對我們的業務、財務狀況和經營業績產生實質性的不利影響。

更詳細的信息見“項目3.關鍵信息--D。風險因素-與我們業務相關的風險-如果我們在中國複雜的互聯網業務和網絡廣告業務監管環境下未能獲得或保持適用的許可證和審批，或未能通過政府年度檢查或獲得營業執照的續展，我們的業務、財務狀況和經營業績將受到實質性和不利的影響「和」第三項。風險因素-與在中國做生意相關的風險-根據中國法律，我們的離岸發行可能需要獲得中國證監會或其他中國政府機構的批准和/或報告和備案，如果需要，我們無法預測我們能否或在多長時間內能夠獲得批准或完成此類備案和報告義務。

《追究外國公司責任法案》

根據《外國公司問責法》，如果美國證券交易委員會確定我們提交的審計報告是由連續兩年沒有接受PCAOB檢查的註冊會計師事務所出具的，美國證券交易委員會將禁止我們的股票或美國存託憑證在美國場外交易市場交易。自截至2019年12月31日的財政年度起，我們已委任GGF CPA Limited或GGF負責綜合財務報表的審計。作爲在PCAOB(PCAOB ID：2729)註冊的事務所，我們目前的核數師GGF CPA Ltd是一家獨立註冊會計師事務所，負責發佈本Form 20-F年度報告中包含的審計報告。根據該法律，PCAOB將定期進行檢查，以評估其是否符合適用的專業標準。GGF的審計報告包含在本報告中，總部位於廣州，中國，截至本年度報告日期，GGF未被列入PCAOB確定報告中確定的公司名單。最近的事態發展給PCAOB繼續對我們的獨立會計師事務所GGF進行檢查的能力帶來了不確定性。我們的前任核數師在2018至2019財年與我們在中國的業務有關的工作沒有受到PCAOB的檢查。不能保證我們目前的核數師或我們聘請的任何未來核數師在我們的整個聘用期間都會接受PCAOB的全面檢查，這可能會影響我們在美國繼續交易的能力。相關的風險和不確定性可能導致美國存託憑證的價值大幅下降。雖然我們相信HFCAA和相關法規目前不會影響我們，但我們不能向您保證，不會對HFCAA或相關法規進行任何進一步的實施和解釋，這可能會在未來對我們構成監管風險和施加限制。更多細節見“項目3.關鍵信息--D。風險因素-與在中國做生意相關的風險-儘管我們的獨立註冊會計師事務所在PCAOB註冊，目前正在接受PCAOB的定期檢查，但如果後來確定PCAOB無法全面檢查或調查我們的核數師，投資者將被剝奪此類檢查的好處，我們的美國存託憑證可能被禁止交易。

現金和資產在我們組織中的流動

房天下是一家控股公司，沒有自己的業務。我們在中國的業務主要透過我們的附屬公司及於中國的可變權益實體進行。因此，儘管我們有其他途徑獲得控股公司層面的融資，但房天下向股東支付股息和償還其可能產生的任何債務的能力可能取決於我們中國子公司支付的股息以及我們中國合併可變權益實體支付的許可費和服務費。如果我們的任何子公司未來爲自己產生債務，管理此類債務的工具可能會限制其向房天下支付股息的能力。此外，我們的中國子公司只能從根據中國會計準則和法規確定的留存收益(如果有)中向房天下支付股息。此外，我們的中國附屬公司及綜合可變權益實體須向若干法定儲備基金撥款或可向若干酌情基金撥款，除非公司出現有償付能力的清盤情況，否則不得作爲現金股息分配。

根據中國法律及法規，我們的中國附屬公司及可變權益實體在向吾等派發股息或以其他方式轉移其任何淨資產方面須受若干限制。外商獨資企業從中國匯出的股息，也要經過國家外匯管理局指定的銀行審核。受限制的金額包括吾等中國附屬公司的實收資本及法定儲備金，以及吾等並無法定擁有權的可變利息實體的淨資產，於2020年、2021年及2022年12月31日分別爲710美元萬、730美元萬及660美元萬。此外，我們中國附屬公司及可變權益實體向中國以外實體的現金轉移須受中國政府貨幣兌換管制。因此，由於中國政府幹預或對我們的控股公司、我們的子公司或中國的可變權益實體的貨幣兌換能力施加限制和限制，我們中國子公司或中國的可變權益實體的資金可能無法用於中國以外的資金運營或其他用途，例如向美國投資者支付股息。關於與我們在中國業務的資金流有關的風險，請參閱“項目3.關鍵信息-D。風險因素-與在中國經商有關的風險-我們主要依賴子公司支付的股息和其他股權分配，而對子公司向我們付款能力的任何限制都可能對我們開展業務的能力以及我們的流動性產生實質性的不利影響，“3.D.關鍵信息-風險因素-與在中國經商有關的風險-政府對貨幣兌換的控制可能會限制我們有效利用收入的能力。項目3.D.關鍵信息-風險因素-與在中國做生意有關的風險-我們可能因某些歷史上的集團內融資交易而受到罰款和法律或行政處罰。

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從2020年到2022年，我們的某些內地中國子公司向我們的香港子公司轉移了總計50400美元的萬現金。這些資金的分配如下：(I)29100美元萬用於償還特定銀行貸款；(Ii)8,800美元萬用於償還可轉換優先票據；以及(Iii)剩餘金額用於支持海外運營需要。

根據中國法律，房天下只能通過出資或貸款向我們的中國子公司提供資金，並且只能通過貸款向可變利益實體提供資金，但必須滿足適用的政府註冊和批准要求。於截至2020年、2021年及2022年12月31日止年度內，房天下並無向我們的中間控股公司、附屬公司及可變利息實體提供任何貸款或出資。此外，房天下向我們中國子公司和可變權益實體的現金轉移受中國政府貨幣兌換管制。因此，房天下持有的資金可能無法爲我們的中國子公司或中國的可變權益實體的運營提供資金。見「項目3.關鍵信息-風險因素-與在中國做生意有關的風險-中華人民共和國關於境外控股公司向中國實體提供貸款的規定可能會影響我們利用資本或其他方式資助我們在中國的業務的能力」。

房天下目前沒有計劃在可預見的未來向我們的普通股支付任何現金股息。我們目前打算保留大部分(如果不是全部)可用資金和未來的任何收益，以運營和擴大我們的業務。見“項目8.財務信息--A。合併報表和其他財務信息--股利政策。“有關在我們的美國存託憑證中投資的中國和美國聯邦所得稅的考慮因素，請參閱“第10項。其他信息-E。稅制。“

A.選定的財務數據

我們的精選綜合全面收益(虧損)表數據(美國存托股份信息除外)以及截至2020年、2020年、2021年和2022年12月31日的精選綜合資產負債表數據以及截至2020年12月31日、2021年和2022年的精選綜合資產負債表數據均來自本年度報告中包含的經審計的綜合財務報表。

您應結合我們的審計合併財務報表和相關附註閱讀以下信息和「第5項。本年度報告中的運營和財務回顧與展望」。下面列出的我們的歷史經營業績並不一定表明未來任何財政期間的預期業績。

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與可變利益實體相關的財務信息

下表列出了截至所列日期可變利益實體和其他實體的簡明綜合財務狀況表。

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已選擇 簡明 合併利潤表信息

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B.資本化和負債

不適用。

C.提出和使用收益的理由

不適用。

D.風險因素

風險因素摘要

對我們的美國存託憑證或普通股的投資涉及重大風險。以下是我們面臨的重大風險總結，按相關標題組織。這些風險在第3項中得到了更全面的討論。關鍵信息-D。危險因素

與我們的業務相關的風險

與我們的公司結構相關的風險

在中國做生意的相關風險

與我們的美國存託憑證、普通股和票據相關的風險

投資我們的美國存託憑證或票據涉及風險。在作出投資決定前，您應仔細考慮以下所述的風險，以及本年報所包括或以參考方式併入的其他資料。任何這些風險都可能對我們的業務、財務狀況或經營結果產生重大不利影響。由於上述任何一種風險，我們的美國存託憑證或票據的市場或交易價格可能會下跌，您可能會損失全部或部分投資。此外，下文討論的風險還包括前瞻性陳述，我們的實際結果可能與這些前瞻性陳述中討論的結果大不相同。您還應閱讀本年度報告標題爲「前瞻性陳述」的部分。請注意，我們目前不知道的、我們目前認爲無關緊要的或我們沒有預料到的額外風險也可能損害我們的業務和運營。

與我們的業務相關的風險

我們未來可能會繼續虧損，可能無法恢復盈利，這可能會導致我們的美國存託憑證的市場價格下降。

我們在2020、2021、2022年發生了870美元的萬、1,960美元的萬和7,560美元的萬淨虧損，這主要是由於我們收入的減少和證券公允價值變化的綜合影響。我們未來實現盈利的能力取決於我們控制成本的能力，取決於我們提供產品和服務以滿足市場需求和吸引新客戶的能力，取決於我們產品和服務的競爭力，以及中國房地產市場的監管環境。由於與我們的業務發展和監管環境相關的衆多風險和不確定性，我們不能保證我們可能在短期或長期內恢復盈利，這可能會導致我們的美國存託憑證的市場價格下降。

我們的業務可能會受到中國房地產行業波動和政府措施的實質性不利影響。

我們的房地產服務業務主要在中國進行，我們的業務在很大程度上取決於中國房地產市場的狀況。特別是，我們的新房業務在2020年、2021年和2022年分別佔我們總收入的66.9%、63.2%和61.4%，這取決於全國房地產相關行業和中國特定地區的增長。中國對私人住宅物業需求的增長，往往伴隨着市況的波動和樓價的波動。中國房地產市場供需波動是由經濟、社會、政治等多方面因素造成的。如果房地產市場的波動對房地產和家居相關產品和服務以及房地產和家居相關廣告和融資的需求產生不利影響，對我們產品和服務的需求以及我們的增長和盈利水平可能會大幅下降。

中國的房地產市場通常會受到政府政策變化的影響，影響房地產和金融市場及相關領域。過去，中國政府採取了各種行政措施來遏制其認爲不可持續的房地產市場增長，特別是在中國的房地產市場經歷了房屋銷售和價格快速而顯著的增長的情況下。例如，2013年2月，國務院宣佈了一些計劃，以應對自2012年末以來某些城市房價的快速上漲，包括提高房價快速上漲城市的二套房購房者的最低首付和貸款利率，以及對現房銷售徵收20%的資本利得稅。部分由於這些政策，中國的房地產市場在2014年經歷了放緩，房地產開發出現下滑。2015年3月，中國政府發佈了一項新政策，降低首付要求，並免除某些房主在擁有房產兩年後出售的銷售稅。從2016年9月開始，北京和上海等一些城市再次提高了首付要求，並收緊了往往有資格獲得放鬆規定的首套房購房者的決心。有關政府部門最近也頒佈了立法，禁止向購房者提供首付融資，並在某些城市停止發放或續簽房地產經紀人許可證。從2017年3月開始，北京、廣州等部分城市進一步提高了二套房購房者的最低首付比例。2019年4月，中央國家機關住房公積金管理中心印發《關於調整住房公積金個人住房貸款政策進一步提升服務有關事項的通知》，調整了首付比例。根據通知，貸款申請人購買的第一套住房不是經濟適用房的，首付款不得低於購買總價的30%。通知還調整了二套房貸款最高限額。首套購房貸款最高限額爲120元萬，適用貸款基準利率；二套房貸款最高限額爲60萬元，貸款利率爲同期貸款基準利率的1.1倍。2020年8月，交通部會同中國人民銀行制定了針對房地產企業的「三條紅線」政策，意在控制中國主要房地產商的有息債務規模，促進中國房地產行業的可持續發展。三條紅線政策是指：(一)房地產公司的槓桿率(不含預收款)不得超過70%；(二)房地產公司的淨槓桿率不得超過100%；(三)現金與短期計息貸款的比率不得低於1.0。2020年12月28日，中國人民銀行會同中國銀保監會(銀保監會)發佈了《關於建立金融機構房地產貸款集中管理制度的通知》(《聯合通知》)，自2021年1月1日起施行，以加強房地產行業的金融監管。聯合通知要求，房地產貸款比例和個人住房貸款比例不得超過中國人民銀行和銀監會確定的房地產貸款比例上限或個人住房貸款比例上限，開發銀行和政策性銀行應通過必要的修改來落實這些要求。銀行業金融機構房地產貸款集中度超過管理要求的，應當有調整計劃，在業務調整過渡期內逐步達到管理要求。《聯合通知》沒有提高個人住房貸款利率，但限制了各商業銀行個人住房貸款的比例，這是中國政府爲抑制房地產市場，促進房地產市場平穩健康發展而採取的調控措施。2021年3月26日，銀監會、財政部、中國人民銀行聯合發佈了《關於防止商業貸款違規流入房地產市場的通知》，要求銀監會、財政部、中國人民銀行加強對商業貸款違規流入房地產市場的監督檢查，健全違規投訴機制，及時分享和聯合調查此類違規行爲的線索。有關部門還應將企業貸款違規流入房地產市場等相關問題作爲各項檢查的重要內容，依法嚴格履行相關義務，加強聯合懲戒，及時將企業和個人相關行政處罰信息納入徵信系統。2021年7月13日，財政部等七部門聯合發佈了《關於繼續整頓和規範房地產市場秩序的通知》，禁止套戥或協助套戥商業貸款、消費貸款等非住房貸款用於購房。2021年10月23日，中國全國人民代表大會授權國務院在選定的地區啓動爲期五年的房產稅改革試點，要求住宅和非住宅物業的所有者(不包括農村家庭)繳納房產稅。國務院有權決定房產稅在哪裏、如何實施和管理。

除了專門旨在控制中國房地產市場增長的政府政策外，我們的業務、財務狀況和經營業績也可能受到其他宏觀經濟和監管措施的負面影響。以下領域的任何未來政策都可能導致房屋銷售和價格下降，這反過來可能會影響對我們服務的需求，並對我們的業務、財務狀況和運營業績產生負面影響：

我們的業務在很大程度上依賴於我們的營銷服務收入，房地產和家居相關行業的參與者可能會選擇其他廣告媒體，而不是在線廣告或其他在線廣告商，這可能會導致我們的收入下降。

我們所有的營銷服務收入都是通過我們的網站和移動應用程序產生的，我們預計我們收入的很大一部分將繼續來自營銷服務。2020年、2021年和2022年，營銷服務分別佔我們收入的43.9%、44.5%和46.2%，成爲我們最大的收入來源。特別是，我們的新家業務分別在2020年、2021年和2022年貢獻了我們幾乎所有的營銷服務收入。我們的新家業務主要是向住宅房地產開發商及其銷售代理銷售營銷服務，他們正在推廣新開發的物業出售。

雖然中國的網絡營銷行業一直在增長，但中國房地產行業的廣告商通常依賴傳統形式的廣告媒體，如報紙、雜誌和戶外廣告。如果我們無法留住和發展我們的廣告客戶基礎，包括房地產開發商，我們的業務可能不會像我們預期的那樣快速增長。此外，如果廣告商不認爲我們的營銷服務有效或我們的用戶結構不理想，他們可能不會繼續與我們做生意。

我們繼續創造和維持營銷服務收入的能力取決於許多因素，其中許多因素是我們無法控制的，包括：

如果我們無法保持競爭力併爲廣告商提供價值，他們可能會停止向我們投放廣告，這將對我們的業務、財務狀況和運營業績產生重大不利影響。

如果我們不能繼續從我們的主要客戶群，包括房地產開發商、代理商、經紀人和物業業主和經理那裏獲得上市，我們的業務、財務狀況和經營業績可能會受到重大和不利的影響。

我們很大一部分收入來自上市服務。2020年、2021年和2022年，上市服務收入分別約佔我們總收入的22.0%、19.7%和16.3%。上市服務業務的成功取決於我們能否說服房地產開發商、房地產經紀人、經紀人、開發商以及物業所有者和經理在我們的網站和移動應用程序上列出他們的房產。我們相信，擁有來自這類房地產專業人士的大量高質量房源會吸引用戶訪問我們的網站和移動應用程序，從而增強我們對廣告商和其他房地產市場參與者的吸引力。然而，我們幾乎所有的上市協議都是非排他性的。我們的上市客戶可能會停止使用我們的上市服務，並可能選擇使用我們的一個或多個競爭對手的服務，或尋求其他上市方式，如房地產雜誌或報紙。如果大量房地產清單的所有者，如大型開發商、大型經紀人或關鍵房地產市場的業主，選擇不與我們續簽現有協議，我們的網站和移動應用程序對用戶的吸引力可能會降低。如果我們的網站和移動應用程序上的用戶流量減少，廣告商和其他房地產市場參與者可能會停止使用我們的服務或不願爲我們的服務付費。在這種情況下，我們的競爭地位可能會大大削弱，我們的業務、財務狀況和經營業績可能會受到重大不利影響。

我們未來的增長在一定程度上取決於我們在CIH分離後繼續經營保留業務的能力。

2019年6月11日，我們通過將我們擁有的CIH的所有普通股分紅給我們的股權持有人，完成了對我們全資子公司CIH的剝離，相關業務包括(1)某些信息和分析服務，最初作爲我們增值服務的一部分運營，以及(2)某些市場服務，最初作爲我們上市服務的一部分運營。在剝離聯昌國際後，我們保留了經營房地產互聯網門戶網站的業務，主要專注於服務住宅物業行業，而聯昌國際的戰略重點是服務於中國的商業地產行業，使每家公司能夠更有效地追求自己獨特的經營重點和戰略。見“項目7.b.大股東和關聯方交易-關聯方交易-與CIH分離有關的分離和分配相關協議。

我們能否繼續增長保留的業務取決於我們有效管理和開發這些服務的能力。如果我們不能成功地向我們的員工保證我們在分離和分配後的前景，我們的員工可能會尋找其他工作，這可能會對我們的業務運營造成實質性的不利影響。如果我們不能留住我們的人才或在他們離開時替換他們，我們可能無法繼續發展，這可能會導致我們的美國存託憑證價格下跌。

我們很大一部分收入來自中國的幾個主要城市中心，特別是北京、上海、廣州、深圳、重慶和武漢，由於我們的收入集中在這些主要城市地區，我們面臨着市場風險。

我們很大一部分收入來自中國的幾個主要城市中心，包括北京、上海、成都、重慶、武漢、廣州、天津和深圳。2022年，我們從這八個城市中心創造了4,080美元的萬收入，佔我們總收入的50.7%。我們預計，這八個城市中心將繼續成爲我們所有收入類別中重要的地區收入來源。如果這些主要城市中心中的任何一個遭遇對房地產行業或在線廣告產生負面影響的事件，如嚴重的經濟低迷或收縮、自然災害或由於政府不利政策或其他原因導致增長放緩，對我們服務的需求可能會大幅下降，我們的業務和收入增長前景可能會受到實質性和不利的影響。

我們可能無法成功地與當前或未來的競爭對手競爭，這可能會顯著減少我們的市場份額，並對我們的業務、財務狀況和運營結果產生實質性的不利影響。

我們在每一項主要業務活動中都面臨着來自其他公司的競爭。特別是，中國的在線房地產互聯網服務市場競爭日益激烈。例如，在線市場58同城收購了位於中國的在線房地產銷售和租賃服務提供商安居客，這加劇了我們市場的競爭。建立基於互聯網的企業的進入門檻很低，因此允許新進入者迅速湧現。由於中國的在線房地產互聯網服務行業相對較新且不斷髮展，隨着行業的成熟，我們現在或未來的競爭對手可能能夠更好地定位自己來競爭。我們還面臨來自其他媒體公司的競爭，這些公司提供在線廣告、在線上市和類似服務。這些競爭對手中的任何一個都可能提供在性能、價格、範圍、創造力或其他優勢方面比我們提供的產品和服務具有顯著優勢的產品和服務。這些產品和服務可能比我們提供的服務獲得更大的市場接受度，從而削弱我們的品牌。中國在線房地產互聯網服務行業的競爭加劇，可能會使我們難以留住現有客戶和吸引新客戶，並可能導致我們的費用降低。此外，我們目前的競爭對手包括中國提供房地產互聯網服務的主要門戶網站，如新浪、58同城、科網和騰訊控股的房屋網。這些網站可能比我們擁有更多的知名品牌、更大的訪問量和更廣泛的互聯網分銷渠道。

此外，我們已經並可能繼續面臨來自專注於區域的網站和移動應用程序(提供區域房地產列表和本地化服務)以及其他新興渠道(包括社交網絡平台)的激烈競爭。我們目前或未來的任何競爭對手也可能從規模更大、歷史悠久、資金雄厚的公司獲得投資，或與之建立其他商業或戰略關係，並獲得比我們更多的財務、營銷和內容許可和開發資源。此外，我們的一些競爭對手得到了地方政府的支持，這可能會使我們在與他們在當地市場競爭時處於劣勢。我們不能向您保證，我們將能夠成功地與我們目前或未來的競爭對手競爭。中國房地產互聯網服務市場的任何競爭失敗都將對我們的業務、財務狀況和經營業績產生實質性的不利影響。

如果不能保持和提高我們網站和移動應用的品牌知名度，可能會導致現有客戶和合格人員的流失。

我們相信，保持和提升我們作爲中國領先的房地產互聯網公司的品牌名稱是我們戰略的關鍵部分。2014年7月，我們將主要網站的地址從Www.soufun.com 到 Www.fang.com。「方」在中文中的意思是「家」。在更改網址的同時，我們還推出了新的移動應用程序，品牌爲「房天下」(房天下在中文中，這可以大致翻譯爲「世界的家園」在英文中)。2016年9月，我們將公司名稱更名爲房天下。我們相信，這個新的簡化地址將使中國用戶更容易記憶和訪問，從而提高我們的品牌認知度。除了通過直銷隊伍推廣我們的網站和品牌外，我們還打算繼續尋求其他方式來提高品牌知名度，包括髮布房地產研究報告、活動贊助、門戶協作安排以及廣告和營銷活動。我們不能向您保證，我們的努力將成功地保持或提高我們的品牌知名度。如果我們的品牌提升戰略不成功，或者如果其他品牌在我們運營的一個或多個城市的市場認知度超過我們的品牌，我們可能無法吸引或留住現有用戶、客戶或合格人員，這可能會大幅減少我們的收入和盈利能力。

第三方未經授權使用我們的知識產權，以及爲保護我們的知識產權而產生的費用，可能會對我們的業務、財務狀況、運營結果、聲譽和競爭優勢產生重大不利影響。

我們的版權、商標、商業祕密、域名和其他知識產權對我們的業務非常重要。未經授權使用這些知識產權，無論是我們擁有的還是授權給我們的，都可能對我們的業務、財務狀況、運營結果、聲譽和競爭優勢產生重大不利影響。我們依靠知識產權法和與我們的關鍵員工以及我們的某些客戶、合作者和其他人的合同安排來保護我們的知識產權。我們採取的保護知識產權的措施可能不夠充分，而且監管未經授權使用我們的知識產權的行爲既困難又昂貴。

此外，中國對互聯網相關行業知識產權的有效性、可執行性和保護範圍尚不確定，仍在不斷演變，可能涉及重大風險。中國的法律和執法程序還不完善，對知識產權的保護程度不如美國和其他司法管轄區的法律和執法程序。此外，未來可能需要訴訟來執行我們的知識產權，這可能會導致大量成本和我們的資源被轉移，並對我們的業務、財務狀況和運營結果產生實質性的不利影響。如果我們不能充分保護我們擁有或使用的知識產權，我們可能會失去這些權利，我們的業務、增長前景和盈利能力可能會受到影響。

中國對互聯網行業的監管，包括對互聯網上發佈的信息的審查，可能會對我們的業務產生實質性的不利影響。

中國製定了管理互聯網接入和傳播新聞、信息或其他內容的法律法規，以及通過互聯網提供的產品和服務萬億。在過去，中國政府禁止通過互聯網傳播它認爲違反適用的中國法律、規則和法規的信息。特別是，根據國務院頒佈的規定，工信部、新聞出版廣電總局(原國家新聞出版局)、文化部禁止互聯網內容提供者和互聯網出版商在互聯網上發佈或展示下列內容：(一)反對中華人民共和國憲法的基本原則；(二)危害國家安全、泄露國家祕密、顛覆國家政權、破壞國家統一；(三)散佈謠言、擾亂社會秩序、擾亂社會穩定；(四)宣傳淫穢、色情、賭博、暴力、謀殺、恐懼、煽動犯罪的；(五)侮辱、誹謗第三人或者侵犯第三人合法權利的。

如果我們通過我們合併的受控實體提供的任何互聯網內容被中國政府視爲違反任何此類內容限制，我們將無法繼續提供此類內容，並可能受到懲罰，包括沒收非法收入、罰款、暫停業務和吊銷所需的許可證，這可能對我們的業務、財務狀況和經營業績產生重大不利影響。我們還可能對我們的客戶或附屬公司的任何非法行爲或我們分發的被認爲不適當的內容承擔潛在的責任。可能很難確定可能導致對我們承擔責任的內容類型，如果我們被發現負有責任，我們可能會被迫停止在中國運營我們的網站和移動應用程序。

如果我們在中國複雜的互聯網業務和網絡廣告業務的監管環境下未能獲得或保持適用的許可證和審批，或者未能通過政府年度檢查或獲得營業執照的續展，將對我們的業務、財務狀況和經營業績造成重大不利影響。

中國的互聯網和在線廣告行業仍處於相對早期的發展階段，受到中國政府的高度監管。中國政府的各個監管機構，如國務院、工信部、國家工商總局、國家廣播電視總局(或國家廣播電視總局，前身爲國家新聞出版廣電總局或國家廣電總局)和公安部，有權發佈和實施有關互聯網和廣告業各個方面的法規。此外，可能會通過新的法律、規則和條例，或者可能發佈對現有法律、規則和條例的新解釋，以解決不時出現的問題。因此，在解釋和實施適用於互聯網和在線廣告行業的任何現行和未來的中國法律、規則和法規方面存在重大不確定性。

我們需要從各個監管部門獲得適用的許可證或批准，才能提供廣告和增值服務和產品。這些許可證或批准對我們的業務運營是必不可少的，通常要接受相關中國政府部門的年度審查。例如，北京搜房科技發展有限公司(「北京科技」)和北京世紀佳天霞科技發展有限公司(「北京金通科技」)均持有適用中國法律、法規所要求的互聯網內容提供商許可證；北京科技和北京金通科技均持有根據適用中國法律、法規及法規所要求的經營電子公告板服務的批准。允許北京廣告、上海世紀JTX網絡及若干其他合併受控實體按照各自營業執照所列的經營範圍提供營銷服務。

根據國家廣播電視總局發佈的有關規定，從事互聯網廣播活動的公司必須獲得國家廣播電視總局頒發的互聯網音像節目傳輸許可證，並按照許可證規定的範圍經營。我們的一些合併受控實體提供某些互聯網直播服務。已取得網絡文化產品展覽比賽互聯網文化經營許可證、藝術文化、娛樂、科技、財經、體育、教育等專業視聽節目製作互聯網視聽節目服務互聯網視聽節目傳輸許可證(不含採訪)、一般社會組織文化活動、體育賽事等組織活動的廣播服務、直播服務、廣播電視節目製作經營許可證。然而，由於現有和未來法律法規的解釋和實施存在不確定性，我們持有的許可證可能會被政府部門視爲不足，如果我們的行爲被認爲違反了相關法律法規，可能會受到相關監管機構的罰款或其他監管行動。

然而，我們的一些合併的受控實體可能需要獲得額外的許可證。例如，由於我們的網站和移動應用程序包括在線住宅社區，允許訪問者在我們的網站和移動應用程序上發佈信息，包括視頻、其他網站和移動應用程序或微博或在線論壇中的數據，以便與其他用戶討論，因此在我們的網站和移動應用程序上發佈此類信息可能被視爲提供互聯網發佈服務，因此需要獲得互聯網發佈許可證。同樣，如果我們或第三方發佈可能被視爲新聞信息的信息，在我們的網站和移動應用程序上發佈此類信息可能被視爲互聯網新聞信息服務，因此需要互聯網新聞信息許可證。像許多其他類似情況的企業經營者一樣，我們一直在沒有這種許可證的情況下經營我們的企業。

此外，在北京怡然居客申請該牌照期間，本公司若干附屬公司持有的其他服務許可證(包括房地產服務許可證)已經到期，而本公司位於上海、南寧和天津的子公司持有的某些融資擔保許可證已被註銷或正在註銷中。

根據適用的中國法律、規則和法規，未能獲得和/或保持營業執照、互聯網出版物許可證和/或互聯網新聞信息服務許可證可能會使實體受到各種處罰，包括沒收收入、對進行該等活動的實體的業務運營施加罰款和/或限制，或停止其運營。儘管我們的相關綜合受控實體並未直接從互聯網出版服務或互聯網新聞信息服務獲得任何收入，但我們不能向您保證中國監管當局不會施加任何此類處罰。我們合併後的受控實體的業務運作出現任何此類中斷，都可能對我們的業務、財務狀況和運營結果產生重大不利影響。

意外的網絡中斷或安全漏洞，包括黑客攻擊或計算機病毒攻擊，可能會導致服務延遲或中斷，導致我們的網站和移動應用程序的使用和性能下降，並損害我們的聲譽和品牌。

我們的業務在很大程度上依賴於中國互聯網基礎設施的性能和可靠性、我們服務提供商網絡上帶寬和服務器的持續可訪問性以及我們技術平台的持續性能、可靠性和可用性。如果我們的計算機和硬件系統不能保持令人滿意的性能、可靠性、安全性和可用性，可能會對我們的聲譽以及我們吸引和維持客戶和遊客流量的能力造成重大損害。與我們的網絡基礎設施相關的主要風險包括：

計算機病毒和黑客攻擊可能會導致延遲或其他服務中斷，並可能導致我們的硬件、軟件系統和數據庫受到重大破壞、我們的業務活動中斷(例如，我們的電子郵件和其他通信系統)、安全漏洞和機密或敏感信息的無意泄露、計算機病毒的無意傳播以及通過使用拒絕服務或類似攻擊訪問我們的網站和移動應用程序。此外，計算機病毒的不經意傳播可能會使我們面臨重大的損失或訴訟風險，並可能承擔責任。我們的所有服務器和路由器，包括備份服務器，目前都由北京的第三方服務提供商託管，我們網站和移動應用程序上的所有信息都會定期備份。在我們的備份之間發生的任何黑客攻擊、安全漏洞或其他系統中斷或故障都可能擾亂我們的業務，或導致我們丟失並無法恢復房地產列表、聯繫信息和其他重要客戶信息等數據。

我們也沒有爲與我們的系統相關的損失提供保險，也沒有業務中斷保險。此外，我們的財產保險保單的低承保限額可能不足以補償我們的所有損失，特別是可能發生的任何業務和聲譽損失。爲了改善我們的業績並防止我們的服務中斷，我們可能不得不進行大量投資，以部署額外的服務器，或者創建我們的網站和移動應用程序的一個或多個副本來反映我們的在線資源，這兩種情況中的任何一種都可能增加我們的支出，減少我們的淨收入。

與我們網站相關的安全漏洞可能會使我們面臨潛在的責任並損害我們的聲譽。

確保通過公共網絡安全地傳輸機密信息對於維護客戶和用戶的信心至關重要。我們現有的安全措施可能不足以保護這些機密信息。此外，計算機和網絡系統很容易受到計算機黑客的入侵。安全漏洞可能會使我們面臨訴訟，並可能因未能保護機密客戶信息而承擔責任，並可能損害我們的聲譽，降低我們吸引客戶和用戶的能力。任何未來的安全漏洞，如果有的話，可能會對我們的業務、財務狀況和運營結果造成實質性的不利影響。

我們被要求遵守中華人民共和國和其他與隱私和網絡安全相關的適用法律。不當使用或披露數據可能會對我們的業務和前景產生重大和不利的影響。

我們的業務生成並處理大量數據。我們面臨着處理和保護大量數據的固有風險。特別是，我們面臨着與我們平台上的交易和其他活動的數據有關的一些挑戰，包括：

總的來說，我們預計數據安全和數據保護合規將受到國內和全球監管機構的更多關注和關注，並在未來吸引持續或更大的公衆審查和關注，這可能會增加我們的合規成本，並使我們面臨與數據安全和保護相關的更高風險和挑戰。如果我們無法管理這些風險，我們可能會受到懲罰，包括罰款、暫停營業和吊銷所需的許可證，我們的聲譽和運營結果可能會受到實質性和不利的影響。

中國關於數據安全和數據保護的監管和執法制度正在演變，可能會有不同的解釋或重大變化。此外，中國不同的監管機構，包括全國人民代表大會常務委員會、工業和信息化部或工信部、CAC、公安部和SAMR，都以不同的標準和應用執行了數據隱私和保護法律法規。見“項目4.關於公司的信息--b.業務概述--監管。以下是中國最近在這一領域的某些監管活動的例子：

數據安全

個人信息和隱私

​

許多與數據有關的立法相對較新，其中的某些概念仍有待監管機構的解釋。如果我們擁有的任何數據屬於需要更嚴格審查的數據類別，我們可能需要採取更嚴格的措施來保護和管理這些數據。網絡安全審查措施和網絡數據安全管理條例仍不清楚這些要求是否適用於已經在美國上市的公司，如我們。在現階段，我們無法預測這些措施和法規的影響，我們將密切監測和評估規則制定過程中的任何發展。如果隨後的立法要求我們這樣的發行者批准網絡安全審查和其他具體行動，我們將面臨不確定性，即我們是否能及時或根本完成這些額外程序，這可能會使我們受到政府的執法行動和調查、罰款、處罰、暫停我們的不合規運營或將我們的應用程序從應用程序商店中移除，並對我們的業務和運營結果產生實質性和不利影響。截至本年度報告之日，我們尚未參與CAC在此基礎上對網絡安全審查進行的任何正式調查。

一般而言，遵守現有的中國法律和法規，以及中國監管機構未來可能頒佈的與數據安全和個人信息保護相關的額外法律和法規，可能會花費高昂並導致我們的額外費用，並使我們受到負面宣傳，這可能會損害我們的聲譽和業務運營。在實踐中如何執行和解釋這些法律和條例也存在不確定性。

此外，世界各地的監管當局已經通過或正在考慮一些關於數據保護的立法和監管建議。這些立法和監管建議如果被採納，以及其不確定的解釋和應用，除了可能被罰款外，還可能導致一項命令，要求我們改變我們的數據做法和政策，這可能會對我們的業務和運營結果產生不利影響。2018年5月25日生效的歐盟一般數據保護條例，包括對接收或處理歐洲經濟區居民個人數據的公司的運營要求。這項規定確立了適用於個人數據處理的新要求，賦予個人新的數據保護權，並對嚴重違反數據的行爲施加懲罰。根據這一條例，個人也有權獲得金融或非金融損失的賠償。雖然我們不在歐洲經濟區開展任何業務，但如果歐洲經濟區的居民訪問我們的網站或我們的移動平台並輸入受保護的信息，我們可能會受到此規定的約束。

我們業務的成功運營取決於中國互聯網基礎設施和電信網絡的性能和可靠性。

我們的業務取決於中國的互聯網基礎設施的性能和可靠性。基本上所有的互聯網接入都是通過國家控制的電信運營商在工信部的行政控制和監管監督下保持的。此外，中國的國家網絡通過中國政府控制的國際網關連接到互聯網。這些國際網關通常是國內用戶連接互聯網的唯一渠道。我們不能向你保證，中國將發展更復雜的互聯網基礎設施。如果中國的互聯網基礎設施出現中斷、故障或其他問題，我們可能無法接入替代網絡。此外，中國的互聯網基礎設施可能無法支持與互聯網使用量持續增長相關的需求。

我們還依賴中國電信公司(「中國電信」)和中國聯合網絡通信集團有限公司(「中國聯通」)主要通過本地電信線路和互聯網數據中心來託管我們的服務器，爲我們提供數據通信能力。如果中國電信和中國聯通的固定電信網絡出現中斷、故障或其他問題，或者如果中國電信或中國聯通無法提供此類服務，我們無法獲得替代服務。任何計劃外的服務中斷都可能擾亂我們的運營，損害我們的聲譽，並導致我們的收入下降。此外，我們無法控制中國電信和中國聯通提供服務的成本。如果我們爲電信和互聯網服務支付的價格大幅上升，我們的毛利率可能會大幅下降。此外，如果互聯網接入費或向互聯網用戶收取的其他費用增加，我們的用戶流量可能會減少，這反過來可能會導致我們的收入下降。

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.