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Vipshop Reports Unaudited Third Quarter 2017 Financial Results
Conference Call to Be Held at 8:00 A.M. U.S. Eastern Time on November 21, 2017

GUANGZHOU, China, Nov. 20, 2017 /PRNewswire/ -- Vipshop Holdings Limited (NYSE: VIPS), a leading online discount retailer for brands in China ("Vipshop" or the "Company"), today announced its unaudited financial results for the third quarter ended September 30, 2017.

Third Quarter 2017 Highlights

  • Total net revenue for the third quarter of 2017 increased by 27.6% to RMB15.3 billion (US$2.3 billion) from RMB12.0 billion in the prior year period.
  • The number of active customers[1] for the trailing twelve months ended September 30, 2017 increased by 22% year over year to 60.5 million from 49.6 million in the prior year period.
  • Total orders[2] for the third quarter of 2017 increased by 23% year over year to 74.0 million from 60.1 million in the prior year period.
  • Gross profit for the third quarter of 2017 increased by 19.4% to RMB3.5 billion (US$526.0 million) from RMB2.9 billion in the prior year period.
  • Net income attributable to Vipshop's shareholders for the third quarter of 2017 was RMB338.1 million (US$50.8 million), as compared with RMB342.9 million in the prior year period.
  • Non-GAAP net income attributable to Vipshop's shareholders[3] for the third quarter of 2017 was RMB559.8 million (US$84.1 million), as compared with RMB595.5 million in the prior year period.

Mr. Eric Shen, chairman and chief executive officer of Vipshop, stated, "We saw healthy growth in our total active customers for the trailing twelve months ended September 30, 2017, which increased to over 60 million. Importantly, our core categories continue to demonstrate robust growth, adding hundreds of domestic and international fashion brands to our portfolio in the past quarter. We remain committed to enriching our offering, including opening up our marketplace business, which will continue to improve our user experience."

Mr. Donghao Yang, chief financial officer of Vipshop, further commented, "In the third quarter of 2017, our topline came in at the high-end of our guidance range, increasing by nearly 28% year over year. Our efforts to manage existing and new users are bearing fruit, as demonstrated by the improved stickiness and customer loyalty across our platform." 

Recent Business Highlights

  • In the third quarter of 2017, Vipshop added three local warehouses in Taiyuan, Hohhot, and Hefei, China, totaling approximately 32,000 square meters and bringing the Company's total number of local warehouses to fourteen as of September 30, 2017. The Company added approximately 23,000 square meters of warehousing space for its cross-border business, including new locations in Australia, France, and the United States. For its regional logistics hubs, approximately 150,000 square meters of warehousing space were added. As of September 30, 2017, Vipshop has approximately 2.4 million square meters of total warehousing space, of which 1.5 million square meters of warehousing space is owned by the Company.
  • During the third quarter of 2017, Vipshop delivered 98% of its orders through its proprietary last mile network, up from 90% in the prior year period. Around 72% of customer returns were collected directly by Vipshop's last mile staff, which represents a significant increase from 50% in the prior year period.
  • In the third quarter of 2017, the Company's average revenue per customer increased by 11% year over year, which was primarily driven by the 4% year-over-year increase in average ticket size and 7% year-over-year increase in the number of orders per customer.
  • Vipshop began to roll out its Super VIP Paid Membership Program to all customers in the third quarter of 2017. The average visiting frequency of customers who enrolled in the program increased by almost 100% after such customers started paying for the membership.
  • Vipshop is connected to the inventory management systems of more than 500 of its suppliers. In the third quarter of 2017, the Company's daily average SKUs online was 3.2 million, representing a significant increase from 1.2 million in the prior year period.
  • Vipshop recently added a number of popular domestic and international brands to its platform, including Diesel, Marc Jacobs, Sergio Rossi, Shanghai Tang, and Peuterey.
  • In October 2017, Vipshop's Internet finance subsidiary completed its second offering of Renminbi-denominated asset-backed securities ("ABS") of RMB500 million, which is listed on the Shanghai Stock Exchange in China.
  • During the third quarter of 2017, Vipshop's consumer financing business had 3.8 million users, which was an 146% increase from 1.5 million users in the prior year period.

Third Quarter 2017 Financial Results

REVENUE

Total net revenue for the third quarter of 2017 increased by 27.6% to RMB15.3 billion (US$2.3 billion) from RMB12.0 billion in the prior year period, primarily driven by the growth in the number of total active customers and average revenue per customer.

The number of active customers for the third quarter of 2017 increased by 15% to 23.8 million from 20.8 million in the prior year period. The number of total orders for the third quarter of 2017 increased by 23% to 74.0 million from 60.1 million in the prior year period.

GROSS PROFIT

Gross profit for the third quarter of 2017 increased by 19.4% to RMB3.5 billion (US$526.0 million) from RMB2.9 billion in the prior year period. Gross margin was 22.9% as compared with 24.4% in the prior year period, primarily attributable to investment in promotional activities for market share gain, which is balanced by reduced spending in the Company's broader marketing efforts.

OPERATING INCOME AND EXPENSES

Total operating expenses for the third quarter of 2017 were RMB3.2 billion (US$474.1 million), as compared with RMB2.5 billion in the prior year period. As a percentage of total net revenue, total operating expenses decreased to 20.6% from 21.2% in the prior year period.

  • Fulfillment expenses for the third quarter of 2017 were RMB1.7 billion (US$251.6 million), as compared with RMB1.0 billion in the prior year period, primarily reflecting an increase in sales volume and number of orders fulfilled. As a percentage of total net revenue, fulfillment expenses were 10.9% as compared with 8.5% in the prior year period, primarily attributable to the Company's expansion to support an increase in the last mile business outside of the Vipshop platform.
  • Marketing expenses for the third quarter of 2017 were RMB478.4 million (US$71.9 million), as compared with RMB641.5 million in the prior year period. As a percentage of total net revenue, marketing expenses decreased to 3.1% from 5.3% in the prior year period.
  • Technology and content expenses for the third quarter of 2017 were RMB455.0 million (US$68.4 million), as compared with RMB374.5 million in the prior year period, reflecting the Company's continuing efforts to invest in human capital, advanced technologies, and its Internet finance business. As a percentage of total net revenue, technology and content expenses decreased to 3.0% from 3.1% in the prior year period.
  • General and administrative expenses for the third quarter of 2017 were RMB546.6 million (US$82.2 million), as compared with RMB500.6 million in the prior year period. As a percentage of total net revenue, general and administrative expenses decreased to 3.6% from 4.2% in the prior year period, primarily attributable to the Company's improved efficiency due to its greater scale.

Income from operations for the third quarter of 2017 was RMB448.2 million (US$67.4 million), as compared with RMB528.8 million in the prior year period. Operating margin was 2.9% as compared with 4.4% in the prior year period.

Non-GAAP income from operations[4], which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, was RMB703.2 million (US$105.7 million) as compared with RMB732.0 million in the prior year period. Non-GAAP operating income margin[5] was 4.6% as compared with 6.1% in the prior year period.

NET INCOME

Net income attributable to Vipshop's shareholders for the third quarter of 2017 was RMB338.1 million (US$50.8 million), as compared with RMB342.9 million in the prior year period. Net margin attributable to Vipshop's shareholders was 2.2% as compared with 2.9% in the prior year period, primarily attributable to decreased gross margin and increased fulfillment costs due to the Company's investment into its logistics business outside of the Vipshop platform. Net income attributable to Vipshop's shareholders per diluted ADS[6] was RMB0.56 (US$0.08) as compared with RMB0.58 in the prior year period.

Non-GAAP net income attributable to Vipshop's shareholders, which excludes share-based compensation expenses, impairment loss of investments, and amortization of intangible assets resulting from business acquisitions and equity method investments, was RMB559.8 million (US$84.1 million) as compared with RMB595.5 million in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders[7] was 3.7% as compared with 5.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS[8] was RMB0.91 (US$0.14) as compared with RMB1.00 in the prior year period.

For the quarter ended September 30, 2017, the Company's weighted average number of ADSs used in computing diluted income per ADS was 627,678,468.

BALANCE SHEET AND CASH FLOW

As of September 30, 2017, the Company had cash and cash equivalents and restricted cash of RMB3.7 billion (US$556.6 million) and held-to-maturity securities of RMB230.3 million (US$34.6 million).

For the quarter ended September 30, 2017, net cash used in operating activities was RMB0.4 billion, and free cash flow[9], a non-GAAP measurement of liquidity, was as follows:

For the three months ended


Sep 30, 2016

        

RMB'000

Sep 30, 2017

         

RMB'000

Sep 30, 2017

         

US$'000

Net cash from (used in) operating activities

649,556

(359,678)

(54,060)

Add: Impact from Internet financing activities[9]

450,106

503,416

75,664

Less: Capital expenditures

(830,470)

(719,081)

(108,079)

Free cash flow in (out)

269,192

(575,343)

(86,475)

Free cash flow trailing twelve months ended


Sep 30, 2016

        

RMB'000

Sep 30, 2017

         

RMB'000

Sep 30, 2017

         

US$'000

Net cash from operating activities

3,634,113

904,849

136,000

Add: Impact from Internet financing activities[9]

1,603,278

2,903,516

436,402

Less: Capital expenditures

(3,844,400)

(2,690,145)

(404,332)

Free cash flow in

1,392,991

1,118,220

168,070

Business Outlook

For the fourth quarter of 2017, the Company expects its total net revenue to be between RMB22.8 billion and RMB23.8 billion, representing a year-over-year growth rate of approximately 20% to 25%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which is subject to change.

Exchange Rate

This announcement contains currency conversions of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of RMB6.6533 to US$1.00, the effective noon buying rate for September 29, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.

Conference Call Information

The Company will hold a conference call on Tuesday, November 21, 2017 at 8:00 am Eastern Time or 9:00 pm Beijing Time to discuss its financial results and operating performance for the third quarter of 2017.

United States: 

+1-845-675-0438

International Toll Free: 

+1-855-500-8701

China Domestic:   

400-1200-654

Hong Kong: 

+852-3018-6776

Conference ID:

#3299529

The replay will be accessible through November 29, 2017 by dialing the following numbers:

United States Toll Free: 

+1-855-452-5696

International:  

+61-2-9003-4211

Conference ID:

#3299529

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.vip.com.

About Vipshop Holdings Limited

Vipshop Holdings Limited is a leading online discount retailer for brands in China. Vipshop offers high quality and popular branded products to consumers throughout China at a significant discount to retail prices. Since it was founded in August 2008, the Company has rapidly built a sizeable and growing base of customers and brand partners. For more information, please visit www.vip.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Vipshop's strategic and operational plans, contain forward-looking statements. Vipshop may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Vipshop's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Vipshop's goals and strategies; Vipshop's future business development, results of operations and financial condition; the expected growth of the online discount retail market in China; Vipshop's ability to attract customers and brand partners and further enhance its brand recognition; Vipshop's expectations regarding demand for and market acceptance of flash sales products and services; competition in the discount retail industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Vipshop's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Vipshop does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Use of Non-GAAP Financial Measures

The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the consolidated statement of shareholders' equity, consolidated statements of cash flows, and the detailed notes required by Accounting Standards Codification 270 Interim Reporting ("ASC270"), have not been presented. Vipshop uses non-GAAP net income attributable to Vipshop's shareholders, non-GAAP net income attributable to Vipshop's shareholders per diluted ADS, non-GAAP income from operations, non-GAAP operating income margin, non-GAAP net margin attributable to Vipshop's shareholders, and free cash flow, each of which is a non-GAAP financial measure. Non-GAAP net income attributable to Vipshop's shareholders is net income attributable to Vipshop's shareholders excluding share-based compensation expenses, impairment loss of investments, and amortization of intangible assets resulting from business acquisitions and equity method investments. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS is computed using non-GAAP net income attributable to Vipshop's shareholders divided by weighted average number of diluted ADS outstanding for computing diluted earnings per ADS. Non-GAAP income from operations is income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. Non-GAAP operating income margin is non-GAAP income from operations as a percentage of total net revenue. Non-GAAP net margin attributable to Vipshop's shareholders is non-GAAP net income attributable to Vipshop's shareholders as a percentage of total net revenue. Free cash flow is the operating cash flow adding back the impact from Internet financing activities and less capital expenditures, which include purchase of property and equipment, purchase and deposits of land use rights, and purchase of other assets. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation, impairment loss of investments and amortization of intangible assets adds clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation expenses, impairment loss of investments, and amortization of intangible assets. Free cash flow enables the Company to assess liquidity and cash flow, taking into account the impact from Internet financing activities and the financial resources needed for the expansion of fulfillment infrastructure and technology platform. Share-based compensation expenses and amortization of intangible assets have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. One of the key limitations of free cash flow is that it does not represent the residual cash flow available for discretionary expenditures. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Vipshop Holdings Limited Reconciliations of GAAP and Non-GAAP Results" at the end of this release.

Investor Relations Contact

Vipshop Holdings Limited
Millicent Tu
Tel: +86 (20) 2233-0732
Email: IR@vipshop.com   

[1] "Active customers" are defined as registered members who have purchased from the Company or the Company's online marketplace platforms at least once during the relevant period.
 
[2] "Total orders" are defined as the total number of orders placed during the relevant period, including the orders for products and services sold in the Company's online sales business and on the Company's online marketplace platforms, net of orders returned.
 
[3] Non-GAAP net income attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as net income attributable to Vipshop's shareholders excluding share-based compensation expenses, impairment loss of investments, and amortization of intangible assets resulting from business acquisitions and equity method investments.
 
[4] Non-GAAP income from operations is a non-GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions.
 
[5] Non-GAAP operating income margin is a non-GAAP financial measure, which is defined as non-GAAP income from operations as a percentage of total net revenues.
 
[6] "ADS" means American depositary share, each of which represents 0.2 Class A ordinary share.
 
[7] Non-GAAP net margin attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop's shareholders, as a percentage of total net revenues.
 
[8] Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop's shareholders, divided by weighted average number of diluted ADS outstanding for computing diluted earnings per ADS.
 
[9] Free cash flow is a non-GAAP financial measure, which means the operating cash flow adding back the impact from Internet financing activities and less capital expenditures, which include purchase of property and equipment, purchase and deposits of land use rights, and purchase of other assets.
 

 

Vipshop Holdings Limited

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income 

(In thousands, except per share data)


Three Months Ended


September 30,2016

September 30,2017

September 30,2017


RMB'000

RMB'000

USD'000





Product revenues 

11,703,511

14,900,789

2,239,609

Other revenues (1)

298,813

412,368

61,979

Total net revenues

12,002,324

15,313,157

2,301,588

Cost of revenues

(9,070,361)

(11,813,674)

(1,775,611)

Gross profit

2,931,963

3,499,483

525,977

Operating expenses:




Fulfillment expenses (2)

(1,025,845)

(1,674,261)

(251,644)

Marketing expenses

(641,514)

(478,424)

(71,908)

Technology and content expenses

(374,468)

(455,039)

(68,393)

General and administrative expenses (3)

(500,600)

(546,575)

(82,151)

Total operating expenses

(2,542,427)

(3,154,299)

(474,096)

Other income

139,251

103,017

15,484

Income from operations

528,787

448,201

67,365

Impairment loss of investments

(65,940)

0

0

Interest expenses

(20,125)

(18,675)

(2,807)

Interest income

21,972

18,549

2,788

Exchange gain (loss)

31,913

(26,950)

(4,051)

Income before income taxes and share of result of affiliates

496,607

421,125

63,295

Income tax expense (4)

(135,651)

(101,676)

(15,282)

Share of loss of affiliates

(15,752)

(993)

(149)

Net income

345,204

318,456

47,864

Net (income) loss attributable to noncontrolling interests

(2,343)

19,599

2,946

Net income attributable to Vipshop's shareholders

342,861

338,055

50,810





Shares used in calculating earnings per share (5):




Class A and Class B ordinary shares:




—Basic

116,178,808

117,641,548

117,641,548

—Diluted

118,727,676

125,535,694

125,535,694





Net earnings per Class A and Class B share




Net income attributable to Vipshop's shareholders--Basic

2.95

2.87

0.43

Net income attributable to Vipshop's shareholders--Diluted

2.89

2.79

0.42





Net earnings per ADS (1 ordinary share equals to 5 ADSs)




Net income attributable to Vipshop's shareholders--Basic

0.59

0.57

0.09

Net income attributable to Vipshop's shareholders--Diluted

0.58

0.56

0.08

(1) Other revenues primarily consist of revenues from third-party logistics services, product
promotion and online advertising, fees charged to third-party merchants which the Company
provides platform access for sales of their products,and inventory and warehouse management
services to certain suppliers.



(2) Fulfillment expenses include shipping and handling expenses, which amounted RMB 543
million and RMB 948 million  in the three month periods ended September 30, 2016 and 
September 30, 2017, respectively.



(3) General and administrative expenses include amortization of intangible assets resulting from
business acquisitions, which amounted to RMB 77 million and RMB 84 million in the three months
period ended September 30, 2016 and  September 30, 2017, respectively.



(4) Income tax expense Includes income tax benefits of RMB 20 million and RMB 21 million related
to the reversal of deferred tax liabilities, which was recognized on business acquisitions for the
three months period ended September 30, 2016 and  September 30, 2017, respectively.



(5) Authorized share capital is re-classified and re-designated into Class A ordinary shares and
Class B ordinary shares, with each Class A ordinary share being entitled to one vote and each
Class B ordinary share being entitled to ten votes on all matters that are subject to shareholder
vote.











Net income

345,204

318,456

47,864

Other comprehensive income, net of tax: 




Foreign currency translation adjustments 

(36,623)

92,229

13,862

Unrealized gain (loss)  from available-for-sale securities

11,342

(1,993)

(299)

Comprehensive income

319,923

408,692

61,427

Less: Comprehensive income (loss) attributable to noncontrolling interests

5,609

(19,599)

(2,946)

Comprehensive income attributable to Vipshop's shareholders

314,314

428,291

64,373






Three Months Ended


September 30,2016

September 30,2017

September 30,2017


RMB'000

RMB'000

USD'000

Share-based compensation expenses included are as follows




Fulfillment expenses

10,136

17,842

2,682

Marketing expenses

9,536

9,415

1,415

Technology and content expenses

45,096

51,420

7,728

General and administrative expenses

61,397

92,148

13,850

Total

126,165

170,825

25,675













Vipshop Holdings Limited


Unaudited Condensed Consolidated Balance Sheets


(In thousands, except per share data)



















December 31,2016

September 30,2017

September 30,2017


RMB'000

RMB'000

USD'000

ASSETS




CURRENT ASSETS




Cash and cash equivalents

4,109,577

3,665,310

550,901

Restricted cash 

0

37,781

5,679

Held-to-maturity securities

671,776

230,267

34,610

Accounts receivable, net

2,333,918

3,561,913

535,360

Amounts due from related parties

8,352

5,007

753

Other receivables and prepayments,net

2,293,825

2,782,842

418,265

Inventories

4,948,609

4,341,557

652,542

Deferred tax assets

214,815

0

0

Total current assets

14,580,872

14,624,677

2,198,110

NON-CURRENT ASSETS




Property and equipment, net

4,467,451

6,161,628

926,101

Deposits for property and equipment

1,039,793

425,639

63,974

Land use rights, net

2,399,058

3,095,594

465,272

Intangible assets, net

725,147

484,862

72,875

Investment in affiliates

93,144

62,642

9,415

Other investments

503,117

424,096

63,742

Available-for-sale securities investments

407,944

148,006

22,246

Other long-term assets

510,821

152,625

22,940

Goodwill

367,106

367,106

55,177

Deferred tax assets

0

302,849

45,519

Total non-current assets

10,513,581

11,625,047

1,747,261

TOTAL ASSETS

25,094,453

26,249,724

3,945,371





LIABILTIES AND  EQUITY 




CURRENT LIABILITIES




Short term loans (Including short term loans of the VIE without recourse to
the Company of nil  and nil  as of December 31, 2016 and September 30,
2017, respectively) 

0

554,000

83,267

Accounts payable (Including accounts payable of the VIE without recourse
to the Company of RMB 22,471 and RMB 27,978 as of December 31, 2016
and September 30, 2017, respectively) 

8,333,610

8,435,969

1,267,937

Advance from customers (Including  advance from customers of the VIE
without recourse to the Company of RMB 1,211,643 and RMB 904,297 as
of December 31, 2016 and September 30, 2017, respectively) 

2,699,981

1,836,299

275,998

Accrued expenses and other current liabilities (Including accrued expenses
and other current liabilities of the VIE without recourse to the Company of
RMB 1,257,667 and RMB 1,406,029  as of  December 31, 2016 and 
September 30, 2017, respectively) 

3,322,599

2,689,541

404,242

Amounts due to related parties (Including amounts due to related parties of
the VIE without recourse to the Company of RMB 591 and RMB 3,656 as of
December 31, 2016 and September 30, 2017, respectively) 

52,729

13,686

2,057

Deferred income (Including deferred income of the VIE without recourse to
the Company of RMB 16,222 and RMB 7,898 as of December 31, 2016 and 
September 30, 2017, respectively) 

174,547

173,580

26,089

Securitization debt (Including securitization debt of the VIE without recourse
to the Company of nil and nil as of December 31, 2016 and September
30, 2017, respectively) 

0

285,000

42,836

Total current liabilities

14,583,466

13,988,075

2,102,426

NON-CURRENT LIABILITIES




Deferred tax liability (Including deferred tax of the VIE without recourse to the
Company of RMB 4,904  and RMB 4,382  as of  December 31, 2016 and
September 30, 2017, respectively) 

100,583

38,820

5,835

Deferred income-non current (Including deferred income-non current of the
VIE without recourse to the Company of RMB 1,928 and RMB 2,972 as of
December 31, 2016 and  September 30, 2017, respectively) 

246,902

314,814

47,317

Convertible senior notes

4,381,698

4,187,421

629,375

Total non-current liabilities

4,729,183

4,541,055

682,527

Total liabilities

19,312,649

18,529,130

2,784,953





EQUITY:




Class A ordinary shares (US$0.0001 par value, 483,489,642 shares
authorized, and 101,508,264 and 101,508,264 shares issued and
outstanding as of December 31, 2016 and  September 30, 2017,
respectively) 

66

66

10

Class B ordinary shares (US$0.0001 par value, 16,510,358 shares
authorized, and 16,510,358 and 16,510,358 shares issued and
outstanding as of December 31, 2016 and September 30, 2017,
respectively) 

11

11

2

Treasury shares, at cost - 1,356,918 shares and  -297,480 shares as of
December 31, 2016 and  September 30, 2017

(707,441)

(151,578)

(22,782)

Additional paid-in capital

3,130,126

3,122,281

469,283

Retained earnings

3,653,026

4,929,480

740,908

Accumulated other comprehensive loss

(343,608)

(147,807)

(22,215)

Noncontrolling interests

49,624

(31,859)

(4,788)

Total shareholders' equity

5,781,804

7,720,594

1,160,418

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 

25,094,453

26,249,724

3,945,371








Vipshop Holdings Limited


 Reconciliations of GAAP and Non-GAAP Results







Three Months Ended


September 30,2016

September 30,2017

September 30,2017


RMB'000

RMB'000

USD'000

Income from operations

528,787

448,201

67,365

Share-based compensation expenses

126,165

170,825

25,675

Amortization of intangible assets resulting from business acquisitions

77,093

84,161

12,649

Non-GAAP income from operations

732,045

703,187

105,689









Net income

345,204

318,456

47,864

Share-based compensation expenses

126,165

170,825

25,675

Impairment loss in investments

65,940

0

0

Amortization of intangible assets resulting from business acquisitions and
equity method investments

91,556

84,161

12,649

Tax effect of amortization of intangible assets resulting from business
acquisitions

(19,887)

(21,040)

(3,162)

Non-GAAP net income

608,978

552,402

83,026









Net income attributable to Vipshop's shareholders

342,861

338,055

50,810

Share-based compensation expenses

126,165

170,825

25,675

Impairment loss in investments

65,940

0

0

Amortization of intangible assets resulting from business acquisitions
and equity method investments

76,523

67,857

10,199

Tax effect of amortization of intangible assets resulting from business
acquisitions 

(16,009)

(16,965)

(2,550)





Non-GAAP net income attributable to Vipshop's shareholders

595,480

559,772

84,134









Shares used in calculating earnings per share:




Basic ordinary shares:




Class A and Class B ordinary shares:




—Basic

116,178,808

117,641,548

117,641,548

—Diluted

118,727,676

125,535,694

125,535,694





Non-GAAP net income per Class A and Class B share




Non-GAAP net income attributable to Vipshop's shareholders--Basic

5.13

4.76

0.72

Non-GAAP net income attributable to Vipshop's shareholders--Diluted

5.02

4.56

0.69









Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs)




Non-GAAP net income attributable to Vipshop's shareholders--Basic

1.03

0.95

0.14

Non-GAAP net income attributable to Vipshop's shareholders--Diluted

1.00

0.91

0.14

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SOURCE Vipshop Holdings Limited