Financial Position - As of September 30, 2021, the company reported cash and cash equivalents of RMB 159,799,000, a decrease from RMB 159,799,000 in 2020[26] - The total liabilities of subsidiaries amounted to RMB 2,648,673,000 as of September 30, 2021, with a significant portion attributed to intercompany payables[28] - The company has a shareholders' deficit of RMB 2,246,028,000, indicating a challenging financial position[28] - The company recorded net losses of RMB498.3 million, RMB1,533.6 million, and RMB569.2 million (US$88.3 million) for FY 2019, FY 2020, and FY 2021, respectively, with an accumulated deficit of RMB4,378.7 million (US$679.6 million) as of September 30, 2021[41] - As of September 30, 2019, 2020, and 2021, the company's current liabilities exceeded current assets by RMB1,100.6 million, RMB1,758.7 million, and RMB2,171.0 million (US$336.9 million), respectively[44] Revenue and Losses - Net revenues for the company reached RMB 1,233,770 thousand, a slight increase from RMB 1,207,963 thousand in the previous year[29] - The net loss for the company was RMB (498,337) thousand, compared to a net loss of RMB (1,533,641) thousand in the previous year, indicating an improvement[29] - Revenue from value-added services as a percentage of net revenues decreased from 11.7% in FY 2019 to 8.5% in FY 2020, then increased to 9.4% in FY 2021[160] Cash Flow and Investments - Net cash provided by operating activities was RMB (20,149) thousand, a decrease from RMB (88,189) thousand in the previous year[29] - Net cash used in investing activities was RMB (460,663) thousand, compared to RMB (351,450) thousand in the previous year, reflecting increased investment outflows[29] - Net cash provided by financing activities was RMB 530,002 thousand, a significant increase from RMB 569,569 thousand in the previous year[29] - The balance of investments in subsidiaries and VIE as of September 30, 2021, was RMB (3,272,273) thousand, up from RMB (2,955,202) thousand in the previous year[32] Operational Risks - The company has significant cash flow management risks due to operations primarily based in China, which may affect financial stability[23] - The company faces significant risks including reliance on third parties and potential impacts from health epidemics like COVID-19, which could adversely affect its financial condition[37] - The company is subject to the Holding Foreign Companies Accountable Act, which may affect the trading of its American Depositary Shares (ADSs) if compliance is not met[23] Regulatory Environment - The company faces risks related to the complexity and uncertainties of PRC regulations, which could materially affect its business and results of operations[41] - The company is subject to potential dilution of ownership interests due to the conversion of convertible notes and exercise of warrants[41] - The company is subject to evolving PRC laws regarding data security and foreign investments, which could impact its operational capabilities and regulatory compliance[99] Market Conditions - The Chinese economy has shown slower growth since 2012, which may affect demand for rental apartments[53] - Economic conditions and government policies may create uncertainty that could depress the apartment rental market[55] - The competitive landscape in China's long-term apartment rental market includes challenges from larger competitors with greater resources and better access to tenant information[211] Tenant Management and Operations - The company relies on cooperation with a limited number of financial institutions, which poses a risk to its operations[37] - The company has taken measures to reduce costs and control the number of rental units contracted due to decreased occupancy rates during the COVID-19 pandemic[49] - The company has engaged in cost control measures and sought additional financial support from banks and financial institutions in response to the challenges posed by COVID-19[48] Technology and Innovation - The company has developed a technology-driven project management system to control renovation processes, but its effectiveness is not guaranteed[76] - The company has implemented a real-time data backup mechanism to ensure the reliability of its information technology infrastructure[204] - The company has developed a technology-driven project management system that allows for centralized dispatch of job requests and quality control throughout the renovation process[174] Shareholder and Corporate Governance - The company is classified as an "emerging growth company" and may take advantage of reduced reporting requirements, including not being required to comply with auditor attestation requirements of Section 404 of Sarbanes-Oxley Act[149] - The dual class share structure and concentration of ownership may discourage change of control transactions, potentially depriving other shareholders of premium opportunities[148] - The company may face challenges in enforcing foreign judgments in China, which may complicate legal processes[123] Future Outlook - The company has a limited operating history in a rapidly evolving market, making future prospects uncertain[37] - The company anticipates that competition will continue to intensify, affecting its ability to increase revenue and maintain profitability[63] - The company does not expect to pay any cash dividends in the foreseeable future, relying instead on price appreciation of the ADSs for returns on investment[134]
FLJ (FLJ) - 2021 Q4 - Annual Report