PR Newswire | Nov 13, 2020 05:04AM EST

11/13 04:03 CST

Vipshop Reports Unaudited Third Quarter 2020 Financial ResultsConference Call to Be Held at 7:30 A.M. U.S. Eastern Time on November 13, 2020 GUANGZHOU, China, Nov. 13, 2020

GUANGZHOU, China, Nov. 13, 2020 /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, 2020.

Third Quarter 2020 Highlights

* Total net revenue for the third quarter of 2020 increased by 18.2% year over year to RMB23.2 billion (US$3.4 billion) from RMB19.6 billion in the prior year period. * GMV[1] for the third quarter of 2020 increased by 21% year over year to RMB38.3 billion from RMB31.7 billion in the prior year period. * Gross profit for the third quarter of 2020 increased by 15.3% year over year to RMB4.9 billion (US$718.9 million) from RMB4.2 billion in the prior year period. * Net income attributable to Vipshop's shareholders for the third quarter of 2020 increased by 42.1% year over year to RMB1.2 billion (US$183.3 million) from RMB875.5 million in the prior year period. * Non-GAAP net income attributable to Vipshop's shareholders[2] for the third quarter of 2020 increased by 15.2% year over year to RMB1.4 billion (US$204.1 million) from RMB1.2 billion in the prior year period. * The number of active customers[3] for the third quarter of 2020 increased by 36% year over year to 43.4 million from 32.0 million in the prior year period. * Total orders[4] for the third quarter of 2020 increased by 35% year over year to 172.8 million from 127.6 million in the prior year period.

Mr. Eric Shen, Chairman and Chief Executive Officer of Vipshop, stated, "We finished the third quarter of 2020 with robust financial and operational results. During the quarter, our number of active customers increased by 36% year over year to 43.4 million from 32.0 million in the prior year period. Importantly, both our existing and new customers have shown improved next-month retention as compared to the same period last year. We are glad that customers recognize the value of our differentiated offerings, particularly in our core apparel-related categories. We are confident the positive trends in customer acquisition and retention will continue to drive our growth and profitability going forward. Looking ahead, we remain focused on providing value to our customers, offering superior customer experience and carefully procured assortments at a deep discount, further enabling us to gain share in China's discount retail market."

Mr. Donghao Yang, Chief Financial Officer of Vipshop, further commented, "In the third quarter of 2020, we delivered strong topline growth coupled with solid profitability, driven by the strong performance in new customer acquisition and existing customer retention. Our total GMV for the quarter increased by 21% year over year to 38.3 billion from 31.7 billion in the prior year period, and GMV for our core apparel-related categories grew even faster at 29% year over year. Going forward, we will continue to focus on improving our merchandising capability and offering a differentiated shopping experience as compared to marketplace platforms, delivering solid shareholder return over time."

Third Quarter 2020 Financial Results

REVENUE

Total net revenue for the third quarter of 2020 increased by 18.2% year over year to RMB23.2 billion (US$3.4 billion) from RMB19.6 billion in the prior year period, primarily driven by the growth in the number of total active customers.

GROSS PROFIT

Gross profit for the third quarter of 2020 increased by 15.3% year over year to RMB4.9 billion (US$718.9 million) from RMB4.2 billion in the prior year period. Gross margin for the third quarter of 2020 was 21.1%, as compared with 21.6% in the prior year period.

OPERATING EXPENSES

Total operating expenses for the third quarter of 2020 were RMB3.9 billion (US$576.3 million), as compared with RMB3.4 billion in the prior year period. As a percentage of total net revenue, total operating expenses for the third quarter of 2020 decreased to 16.9% from 17.3% in the prior year period.

* Fulfillment expenses for the third quarter of 2020 were RMB1.6 billion (US$238.5 million), as compared with RMB1.6 billion in the prior year period. As a percentage of total net revenue, fulfillment expenses for the third quarter of 2020 decreased to 7.0% from 8.1% in the prior year period, primarily attributable to the change in fulfillment logistic arrangement. * Marketing expenses for the third quarter of 2020 were RMB1.1 billion (US$167.8 million), as compared with RMB721.3 million in the prior year period. As a percentage of total net revenue, marketing expenses for the third quarter of 2020 were 4.9%, as compared with 3.7% in the prior year period, primarily attributable to increased investment into customer acquisition. * Technology and content expenses for the third quarter of 2020 decreased to RMB305.1 million (US$44.9 million) from RMB400.7 million in the prior year period. As a percentage of total net revenue, technology and content expenses for the third quarter of 2020 decreased to 1.3% from 2.0% in the prior year period. * General and administrative expenses for the third quarter of 2020 were RMB848.6 million (US$125.0 million), as compared with RMB681.6 million in the prior year period. As a percentage of total net revenue, general and administrative expenses for the third quarter of 2020 were 3.7%, as compared with 3.5% in the prior year period.

INCOME FROM OPERATIONS

Income from operations for the third quarter of 2020 increased by 6.7% year over year to RMB1.2 billion (US$183.8 million) from RMB1.2 billion in the prior year period. Operating margin for the third quarter of 2020 was 5.4%, as compared with 6.0% in the prior year period.

Non-GAAP income from operations[5] for the third quarter of 2020, which excluded share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, increased by 8.0% year over year to RMB1.5 billion (US$218.9 million) from RMB1.4 billion in the prior year period. Non-GAAP operating income margin[6] for the third quarter of 2020 was 6.4%, as compared with 7.0% in the prior year period.

NET INCOME

Net income attributable to Vipshop's shareholders for the third quarter of 2020 increased by 42.1% year over year to RMB1.2 billion (US$183.3 million) from RMB875.5 million in the prior year period. Net margin attributable to Vipshop's shareholders for the third quarter of 2020 increased to 5.4% from 4.5% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS[7] for the third quarter of 2020 increased to RMB1.80(US$0.27) from RMB1.30 in the prior year period.

Non-GAAP net income attributable to Vipshop's shareholders for the third quarter of 2020, which excluded (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from business acquisitions, (iii) tax effect of amortization of intangible assets resulting from business acquisitions, (iv) investment gain and revaluation of investments excluding dividends, (v) tax effect of investment gain and revaluation of investments excluding dividends, and (vi) share of loss in investment of limited partnerships that are accounted for as equity method investees, increased by 15.2% year over year to RMB1.4 billion (US$204.1 million) from RMB1.2 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders[8] for the third quarter of 2020 was 6.0%, as compared with 6.1% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS[9] for the third quarter of 2020 increased to RMB2.01(US$0.30) from RMB1.78 in the prior year period.

For the quarter ended September 30, 2020, the Company's weighted average number of ADSs used in computing diluted income per ADS was 690,834,625.

BALANCE SHEET AND CASH FLOW

As of September 30, 2020, the Company had cash and cash equivalents and restricted cash of RMB9.6 billion (US$1.4 billion) and short term investments of RMB4.9 billion (US$728.7 million).

For the quarter ended September 30, 2020, net cash from operating activities was RMB1.2 billion (US$177.1 million), and free cash flow[10], a non-GAAP measurement of liquidity, was as follows:

For the three months ended

Sep 30, 2019 Sep 30, 2020 Sep 30, 2020



RMB'000 RMB'000 US$'000

Net cash from operating activities 2,067,480 1,202,504 177,110

Add: Net impact from Internet financing (1,837,974) (178,412) (26,277)activities^[11]

Less: Capital expenditures (1,094,668) (627,434) (92,411)

Free cash (outflow) / inflow (865,162) 396,658 58,422

For the trailing twelve months ended

Sep 30, 2019 Sep 30, 2020 Sep 30, 2020



RMB'000 RMB'000 US$'000

Net cash from operating activities 12,053,995 10,684,651 1,573,679

Add: Net impact from Internet financing (3,239,772) (2,367,857) (348,748)activities^[11]

Less: Capital expenditures (4,040,032) (2,907,965) (428,297)

Free cash inflow 4,774,191 5,408,829 796,634

Recent Development

Mr. David Cui will succeed Mr. Donghao Yang as the Company's new Chief Financial Officer, effective today, and Mr. Donghao Yang has joined the Company's Board of Directors as a Non-Executive Director.

Internal Review

In May 2020, the Hong Kong Independent Commission Against Corruption (the "ICAC") charged two individuals with commercial bribery offences in connection with alleged conduct dating back to the period from 2013 to 2016. The two individuals were associated with entities that had business dealings with the Company during the referenced period. Although neither the Company nor any employee of the Company is a party to the case or has been accused of any wrongdoing, the Company is aware of media reports mentioning the Company in connection with this case.

In an abundance of caution, the Company conducted an internal review under the oversight of the Company's independent Audit Committee of the Board of Directors. The internal review within the agreed scope was recently completed and did not uncover material findings. However, certain areas for improvement were identified with respect to our procurement process. In the spirit of continuous improvement, we have implemented certain changes to enhance the processes in this area.

The Company will continue to monitor the development of the ICAC case, but cannot predict its timing, outcome, or consequence, including impact on the Company, if any.

Business Outlook

For the fourth quarter of 2020, the Company expects its total net revenue to be between RMB33.7 billion and RMB35.2 billion, representing a year-over-year growth rate of approximately 15% to 20%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which is subject to change.

Exchange Rate

The Company's business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi. This announcement contains currency conversions of Renminbi amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of RMB6.7896 to US$1.00, the effective noon buying rate on September 30, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on September 30, 2020, or at any other rate.

Conference Call Information

The Company will hold a conference call on Friday, November 13, 2020 at 7:30 am Eastern Time or 8:30 pm Beijing Time to discuss its financial results and operating performance for the third quarter of 2020.

All participants wishing to join the conference call must pre-register online using the link provided below. Once pre-registration has been complete, participants will receive dial-in numbers, a passcode, and a unique registrant ID. To join the conference, simply dial the number in the calendar invite you receive after pre-registration, enter the passcode followed by your PIN, and you will join the conference instantly.

Conference ID #5476014

Registration Link http://apac.directeventreg.com/registration/event/5476014

The replay will be accessible through November 21, 2020 by dialing the following numbers:

United States Toll Free: +1-855-452-5696

International: +61-2-8199-0299

Conference ID: #5476014

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; the potential impact of the COVID-19 to Vipshop's business operations and the economy in China and elsewhere generally; 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 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 condensed consolidated financial information is derived from the Company's unaudited interim condensed consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that comparative consolidated statements of income and cash flows for the period presented and detailed footnote disclosures required by Accounting Standards Codification 270, Interim Reporting ("ASC270"), have been omitted. 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 (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from business acquisitions, (iii) tax effect of amortization of intangible assets resulting from business acquisitions, (iv) investment gain and revaluation of investments excluding dividends, (v) tax effect of investment gain and revaluation of investments excluding dividends, and (vi) share of loss in investment of limited partnerships that are accounted for as equity method investees. 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 net cash from operating activities adding back the impact from Internet financing activities and less capital expenditures, which include purchase and deposits of property and equipment and land use rights, and purchase of other assets. Impact from Internet financing activities added back or deducted from free cash flow contains changes in the balances of financial products, which are primarily consumer financing and supplier financing that the Company provides to customers and suppliers. The Company believes that separate analysis and exclusion of the non-cash impact of (a) share-based compensation, (b) amortization of intangible assets resulting from business acquisitions, (c) investment gain and revaluation of investments excluding dividends, and (d) share of loss in investment of limited partnerships that are accounted for as equity method investees add 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 (1) non-cash share-based compensation expenses, (2) amortization of intangible assets resulting from business acquisitions, (3) investment gain and revaluation of investments excluding dividends, and (4) share of loss in investment of limited partnerships that are accounted for as equity method investees. 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.

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.

^[1] "Gross merchandise value (GMV)" is defined as the total Renminbi value ofall products and services sold through the Company's online sales business,online marketplace platform, offline stores, and Shan Shan Outlets during therelevant period, including through the Company's websites and mobile apps,third-party websites and mobile apps, Vipshop offline stores and Vipmaxxoffline stores, as well as Shan Shan Outlets that were fulfilled by either theCompany or its third-party merchants, regardless of whether or not the goodswere delivered or returned. GMV includes shipping charges paid by buyers tosellers. For prudent considerations, the Company does not consider products orservices to be sold if the relevant orders were placed and canceledpre-shipment and only included orders that left the Company's or otherthird-party vendors' warehouses.

^[2] Non-GAAP net income attributable to Vipshop's shareholders is a non-GAAPfinancial measure, which is defined as net income attributable to Vipshop'sshareholders excluding (i) share-based compensation expenses, (ii) amortizationof intangible assets resulting from business acquisitions, (iii) tax effect ofamortization of intangible assets resulting from business acquisitions, (iv)investment gain and revaluation of investments excluding dividends, (v) taxeffect of investment gain and revaluation of investments excluding dividends,and (vi) share of loss in investment of limited partnerships that are accountedfor as equity method investees.

^[3] "Active customers" is defined as registered members who have purchasedfrom the Company's online sales business or the Company's online marketplaceplatforms at least once during the relevant period.

^[4] "Total orders" is defined as the total number of orders placed during therelevant period, including the orders for products and services soldthrough the Company's online sales business and the Company's onlinemarketplace platforms (excluding, for the avoidance of doubt, orders from theCompany's offline stores and outlets), net of orders returned.

^[5] Non-GAAP income from operations is a non-GAAP financial measure, which isdefined as income from operations excluding share-based compensationexpenses and amortization of intangible assets resulting from businessacquisitions.

^[6] Non-GAAP operating income margin is a non-GAAP financial measure, which isdefined as non-GAAP income from operations as a percentage of total netrevenues.

^[7] "ADS" means American depositary share, each of which represents 0.2 ClassA ordinary share.

^[8] Non-GAAP net margin attributable to Vipshop's shareholders is a non-GAAPfinancial measure, which is defined as non-GAAP net income attributable toVipshop's shareholders, as a percentage of total net revenues.

^[9] Non-GAAP net income attributable to Vipshop's shareholders per diluted ADSis a non-GAAP financial measure, which is defined as non-GAAP net incomeattributable to Vipshop's shareholders[S:,:S] divided by the weighted averagenumber of diluted ADS outstanding for computing diluted earnings per ADS.

^[10] Free cash flow is a non-GAAP financial measure, which is defined as netcash from (used in) operating activities adding back the impact from Internetfinancing activities and less capital expenditures, which include purchase anddeposits of property and equipment and land use rights, and purchase of otherassets.

^[11] Net impact from Internet financing activities represents net cash flowrelating to the Company's financial products, which are primarily consumerfinancing and supplier financing that the Company provides to its customers andsuppliers.

Vipshop Holdings Limited

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

(In thousands, except for share and per share data)

Three Months Ended

September 30, 2019 September 30, 2020 September 30, 2020

RMB'000 RMB'000 USD'000

Product revenues 18,477,421 22,161,443 3,264,028

Other revenues^(1) 1,135,559 1,018,583 150,021

Total net revenues 19,612,980 23,180,026 3,414,049

Cost of revenues (15,378,956) (18,299,063) (2,695,161)

Gross profit 4,234,024 4,880,963 718,888

Operating expenses:

Fulfillment expenses^(2) (1,579,981) (1,619,487) (238,525)

Marketing expenses (721,334) (1,139,484) (167,828)

Technology and content expenses (400,677) (305,106) (44,937)

General and administrative expenses (681,568) (848,594) (124,984)

Total operating expenses (3,383,560) (3,912,671) (576,274)

Other operating income 318,943 279,820 41,213

Income from operations 1,169,407 1,248,112 183,827

Investment gain and revaluation of investments (31,636) 186,596 27,483

Impairment loss of investments (83,616) 0 0

Interest expense (27,087) (4,623) (681)

Interest income 34,448 112,286 16,538

Foreign exchange gain (loss) 44,938 (96,558) (14,221)

Income before income tax expense and share of (loss) gain of equity method 1,106,454 1,445,813 212,946investees

Income tax expenses (212,463) (247,757) (36,491)

Share of (loss) gain of equity method investees (12,393) 53,598 7,894

Net income 881,598 1,251,654 184,349

Net gain attributable to non-controlling interests (6,124) (7,255) (1,069)

Net income attributable to Vipshop's shareholders 875,474 1,244,399 183,280

Shares used in calculating earnings per share^(3):

Weighted average number of Class A and Class B ordinary shares:

--Basic 133,689,150 135,372,361 135,372,361

--Diluted 135,057,876 138,166,925 138,166,925

Net earnings per Class A and Class B ordinary share

Net income attributable to Vipshop's shareholders--Basic 6.55 9.19 1.35

Net income attributable to Vipshop's shareholders--Diluted 6.48 9.01 1.33

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

Net income attributable to Vipshop's shareholders--Basic 1.31 1.84 0.27

Net income attributable to Vipshop's shareholders--Diluted 1.30 1.80 0.27

^(1) Other revenues primarily consist of revenues from third-party logisticsservices, product promotion and online advertising, fees chargedto third-party merchants which the Company provides platform access for salesof their products, interest income from microcredit andconsumer financing services, inventory and warehouse management services tocertain suppliers, and lease income earned from the ShanShan Outlets.

^(2) Fulfillment expenses include shipping and handling expenses, whichamounted RMB 1.0 billion and RMB 1.1 billion in the three monthperiods ended September 30,2019 and September 30,2020, respectively.

^(3) Authorized share capital is re-classified and re-designated into Class Aordinary shares and Class B ordinary shares, with each Class Aordinary share being entitled to one vote and each Class B ordinary share beingentitled to ten votes on all matters that are subject toshareholder vote.

Three Months Ended

September 30, 2019 September 30, 2020 September 30, 2020

RMB'000 RMB'000 USD'000

Share-based compensation expenses are included in the operating expenses asfollows:

Fulfillment expenses 31,676 24,341 3,585

Marketing expenses 11,500 4,405 649

Technology and content expenses 61,780 42,033 6,191

General and administrative expenses 101,693 161,502 23,787

Total 206,649 232,281 34,212

Vipshop Holdings Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except for share and per share data)

December 31, 2019 September 30, 2020 September 30, 2020

RMB'000 RMB'000 USD'000

ASSETS

CURRENT ASSETS

Cash and cash equivalents 6,573,808 8,883,746 1,308,434

Restricted cash 1,145,477 710,755 104,683

Short term investments 3,052,726 4,947,339 728,664

Accounts receivable, net 1,295,766 485,151 71,455

Amounts due from related parties 47,964 310,997 45,805

Other receivables and prepayments,net 2,897,893 2,279,640 335,755

Loan receivables,net 306,115 53,765 7,919

Inventories 7,708,292 6,420,009 945,565

Total current assets 23,028,041 24,091,402 3,548,280

NON-CURRENT ASSETS

Property and equipment, net 11,256,810 13,461,309 1,982,637

Deposits for property and equipment 101,800 97,979 14,431

Land use rights, net 5,541,108 5,961,786 878,076

Intangible assets, net 337,310 354,120 52,156

Investment in equity method investees 3,112,952 1,845,822 271,860

Other investments 2,002,756 3,023,241 445,275

Other long-term assets 608,073 430,753 63,443

Amounts due from related party-non current 102,000 0 0

Goodwill 236,711 593,662 87,437

Deferred tax assets, net 539,561 630,401 92,848

Operating lease right-of-use assets 1,715,556 1,750,486 257,819

Total non-current assets 25,554,637 28,149,559 4,145,982

TOTAL ASSETS 48,582,678 52,240,961 7,694,262

LIABILTIES AND EQUITY

CURRENT LIABILITIES

Short term loans 1,093,645 2,035,078 299,735

Accounts payable 13,792,200 11,421,579 1,682,217

Advance from customers 1,233,165 1,460,246 215,071

Accrued expenses and other current liabilities 6,534,575 6,422,737 945,967

Amounts due to related parties 532,788 416,184 61,297

Deferred income 405,994 334,557 49,275

Operating lease liabilities 333,268 287,160 42,294

Total current liabilities 23,925,635 22,377,541 3,295,856

NON-CURRENT LIABILITIES

Long term loans 64,515 197,858 29,141

Deferred tax liability 165,098 421,873 62,135

Deferred income-non current 782,068 1,010,699 148,860

Operating lease liabilities 1,395,665 1,525,825 224,730

Other long term liabilities 0 57,444 8,461

Total non-current liabilities 2,407,346 3,213,699 473,327

TOTAL LIABILITIES 26,332,981 25,591,240 3,769,183

EQUITY:

Class A ordinary shares (US$0.0001 par value, 483,489,642 shares authorized,and 76 77 11117,584,362 and 118,954,373 shares issued and outstanding as of December 31,2019 and September 30,2020, respectively)

Class B ordinary shares (US$0.0001 par value, 16,510,358 shares authorized, and16,510,358 and 16,510,358 shares issued and outstanding as of December 31, 2019 11 11 2and September 30,2020, respectively)

Additional paid-in capital 9,959,497 10,658,423 1,569,816

Retained earnings 11,924,228 15,299,602 2,253,388

Accumulated other comprehensive loss (56,656) (41,364) (6,093)

Non-controlling interests 422,541 732,972 107,955

Total shareholders' equity 22,249,697 26,649,721 3,925,079

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 48,582,678 52,240,961 7,694,262

Vipshop Holdings Limited

Reconciliations of GAAP and Non-GAAP Results

Three Months Ended

September 30, 2019 September 30, 2020 September 30, 2020

RMB'000 RMB'000 USD'000

Income from operations 1,169,407 1,248,112 183,827

Share-based compensation expenses 206,649 232,281 34,212

Amortization of intangible assets resulting from business acquisitions 318 5,896 868

Non-GAAP income from operations 1,376,374 1,486,289 218,907

Net income 881,598 1,251,654 184,349

Share-based compensation expenses 206,649 232,281 34,212

Impairment loss in investments 83,616 0 0

Investment gain and revaluation of investments excluding dividends 20,895 (84,961) (12,513)

Share of loss (gain) in investment of limited partnerships that are accountedfor as an 33,562 (4,747) (699)equity method investee

Tax effect of investment gain and revaluation of investments excluding (17,516) (5,810) (856)dividends

Amortization of intangible assets resulting from business acquisitions 318 5,896 868

Tax effect of amortization of intangible assets resulting from business (79) (1,474) (217)acquisitions

Non-GAAP net income 1,209,043 1,392,839 205,144

Net income attributable to Vipshop's shareholders 875,474 1,244,399 183,280

Share-based compensation expenses 206,649 232,281 34,212

Impairment loss in investments 83,616 0 0

Investment gain and revaluation of investments excluding dividends 20,895 (84,961) (12,513)

Share of loss (gain) in investment of limited partnerships that are accountedfor as an 33,562 (4,747) (699)equity method investee

Tax effect of investment gain and revaluation of investments excluding (17,516) (5,810) (856)dividends

Amortization of intangible assets resulting from business acquisitions 308 5,896 868

Tax effect of amortization of intangible assets resulting from business (77) (1,474) (217)acquisitions

Non-GAAP net income attributable to Vipshop's shareholders 1,202,911 1,385,584 204,075

Shares used in calculating earnings per share:

Weighted average number of Class A and Class B ordinary shares:

--Basic 133,689,150 135,372,361 135,372,361

--Diluted 135,057,876 138,166,925 138,166,925

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

Non-GAAP net income attributable to Vipshop's shareholders--Basic 9.00 10.24 1.51

Non-GAAP net income attributable to Vipshop's shareholders--Diluted 8.91 10.03 1.48

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

Non-GAAP net income attributable to Vipshop's shareholders--Basic 1.80 2.05 0.30

Non-GAAP net income attributable to Vipshop's shareholders--Diluted 1.78 2.01 0.30

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SOURCE Vipshop Holdings Limited