Xunlei Ltd Files 20-F Annual Report for Fiscal Year 2023

TL;DR

<b>Xunlei Ltd has submitted its 2023 annual report on Form 20-F, detailing its financial and operational activities for the fiscal year.</b>

AI Summary

Xunlei Ltd (XNET) filed a Foreign Annual Report (20-F) with the SEC on April 23, 2024. Xunlei Ltd filed its annual report on Form 20-F for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company is registered in the Cayman Islands and operates under U.S. GAAP. Key entities mentioned include Giganology Shenzhen and Xunlei Computer Member. The report details various activities including Research and Development Enterprise Activities and High and New Technology Enterprises.

Why It Matters

For investors and stakeholders tracking Xunlei Ltd, this filing contains several important signals. This filing provides investors with a comprehensive overview of Xunlei's performance and strategic positioning for the past fiscal year. The 20-F report is crucial for understanding the company's compliance with U.S. securities regulations and its financial health.

Risk Assessment

Risk Level: medium — Xunlei Ltd shows moderate risk based on this filing. The company operates in China, and the filing mentions 'GeographicConcentrationRisk' for sales revenue, indicating potential vulnerability to economic or regulatory changes within China.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 20-F to assess Xunlei's future growth prospects and potential challenges.

Key Numbers

• 2023-12-31 — Period of Report (Fiscal year end date)
• 2024-04-23 — Filing Date (Date the 20-F was filed)
• 2023-01-01 — Reporting Period Start (Start date of the fiscal year)

Key Players & Entities

• Xunlei Ltd (company) — Filer of the 20-F report
• XNET (company) — Ticker symbol for Xunlei Ltd
• Giganology Shenzhen and Xunlei Computer Member (company) — Mentioned entity within the filing
• Cayman Islands (company) — Country of registration
• China (company) — Country of operations and regulatory context
• State Administration Of Taxation China (regulator) — Mentioned in relation to R&D activities
• Shenzhen Xunlei (company) — Entity involved in R&D activities
• Two Thousand Twenty Share Incentive Plan (company) — Plan related to share-based compensation

FAQ

Risk Factors

• Geographic Concentration Risk [medium — market]: Sales revenue is concentrated in China, posing a risk due to potential economic or regulatory changes in the region.

Industry Context

Xunlei Ltd operates within the software and technology sector, with a significant presence in China. The company's activities are subject to the regulatory environment and market dynamics of the People's Republic of China.

Regulatory Implications

The company's operations in China are subject to the regulations of the State Administration of Taxation and other governmental bodies, particularly concerning research and development and enterprise status.

What Investors Should Do

1. Analyze Xunlei's revenue streams and growth drivers for FY2023.
2. Evaluate the impact of 'GeographicConcentrationRisk' on future financial performance.
3. Review any disclosed executive compensation details for insights into management incentives.

Year-Over-Year Comparison

This filing represents the annual report for the fiscal year 2023, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $0.00025 — ket) XNET Common shares, par value US$0.00025 per share * The Nasdaq Stock Market L
• $ — to the legal currency of China; and "US$," "dollars" or "U.S. dollars" refers to
• $1 — nual report were made at RMB7.0827 to US$1.00, the rate released by the State Admi

Filing Documents

• xnet-20231231x20f.htm (20-F) — 4613KB
• xnet-20231231xex2d4.htm (EX-2.4) — 136KB
• xnet-20231231xex4d25.htm (EX-4.25) — 23KB
• xnet-20231231xex4d26.htm (EX-4.26) — 8KB
• xnet-20231231xex4d27.htm (EX-4.27) — 238KB
• xnet-20231231xex8d1.htm (EX-8.1) — 25KB
• xnet-20231231xex12d1.htm (EX-12.1) — 11KB
• xnet-20231231xex12d2.htm (EX-12.2) — 11KB
• xnet-20231231xex13d1.htm (EX-13.1) — 8KB
• xnet-20231231xex13d2.htm (EX-13.2) — 8KB
• xnet-20231231xex15d1.htm (EX-15.1) — 6KB
• xnet-20231231xex15d2.htm (EX-15.2) — 3KB
• xnet-20231231xex15d3.htm (EX-15.3) — 4KB
• xnet-20231231xex97d1.htm (EX-97.1) — 30KB
• xnet-20231231x20f006.jpg (GRAPHIC) — 92KB
• xnet-20231231x20f010.jpg (GRAPHIC) — 33KB
• xnet-20231231x20f011.jpg (GRAPHIC) — 93KB
• xnet-20231231xex4d27001.jpg (GRAPHIC) — 19KB
• xnet-20231231xex4d27002.jpg (GRAPHIC) — 3KB
• xnet-20231231xex15d1001.jpg (GRAPHIC) — 7KB
• 0001104659-24-050566.txt (&nbsp;) — 17777KB
• xnet-20231231_def.xml (EX-101.DEF) — 389KB
• xnet-20231231_lab.xml (EX-101.LAB) — 887KB
• xnet-20231231_pre.xml (EX-101.PRE) — 692KB
• xnet-20231231.xsd (EX-101.SCH) — 124KB
• xnet-20231231_cal.xml (EX-101.CAL) — 94KB
• xnet-20231231x20f_htm.xml (XML) — 2947KB

Item 18

Item 17 Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No Table of Contents TABLE OF CONTENTS Page INTRODUCTION 1 Forward-Looking Information 2 Part I 3 Item 1. Identity of Directors, Senior Management and Advisers 3 Item 2. Offer Statistics and Expected Timetable 3 Item 3. Key Information 3 Item 4. Information on the Company 63 Item 4A. Unresolved Staff Comments 113 Item 5. Operating and Financial Review and Prospects 113 Item 6. Directors, Senior Management and Employees 134 Item 7. Major Shareholders and Related Party Transactions 141 Item 8. Financial Information 145 Item 9. The Offer and Listing 146 Item 10. Additional Information 147 Item 11.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 163 Item 12.

Description of Securities Other than Equity Securities

Description of Securities Other than Equity Securities 164 Part II 166 Item 13. Defaults, Dividend Arrearages and Delinquencies 166 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 166 Item 15.

Controls and Procedures

Controls and Procedures 166 Item 16. [Reserved] 167 Item 16A. Audit Committee Financial Expert 167 Item 16B. Code of Ethics 167 Item 16C. Principal Accountant Fees and Services 168 Item 16D. Exemptions from the Listing Standards for Audit Committees 168 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 168 Item 16F. Change in Registrant's Certifying Accountant 169 Item 16G. Corporate Governance 169 Item 16H. Mine Safety Disclosure 170 Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 170 Item 16J. Insider Trading Policies 170 Item 16K. Cybersecurity 170 Part III 171 Item 17.

Financial Statements

Financial Statements 171 Item 18.

Financial Statements

Financial Statements 171 Item 19. Exhibits 172

SIGNATURES

SIGNATURES 174 i Table of Contents INTRODUCTION In this annual report, except where the context otherwise requires and for purposes of this annual report only: "we," "us," "our company," "our" or "Xunlei" refers to Xunlei Limited, a Cayman Islands company, its subsidiaries, and, in the context of describing our operations and consolidated financial information, the variable interest entity in China, Shenzhen Xunlei Networking Technologies Co., Ltd., or the VIE, and the VIE's subsidiaries; "China" or "PRC" refers to the People's Republic of China, excluding, for the purpose of this annual report only, Hong Kong, Macau and Taiwan; "daily active user" refers to a user who accessed Mobile Xunlei through a mobile device, on a given day; "digital media content" refers to videos, music, games, software and documents transmitted in digital form; "monthly unique visitors" refers to the number of different individual visitors who accessed Xunlei products (including websites and software) on our platform from the same computer at least once within a month; under this method, a user who accessed Xunlei products from two different computers would count as two unique visitors; "shares" or "common shares" refers to our common shares, par value US$0.00025 per share; "subscriber" refers to users who can access our premium acceleration services, including accounts temporarily suspended, but excluding sub-accounts and accounts on a trial basis. "ADSs" refers to our American depositary shares, each representing five common shares, and "ADRs" refers to any American depositary receipts that evidence our ADSs; "RMB" or "Renminbi" refers to the legal currency of China; and "US$," "dollars" or "U.S. dollars" refers to the legal currency of the United States. We use U.S. dollar as reporting currency in our financial statements and in this annual report. Transactions in Renminbi are recorded at the rates of exchange prevailing when the transactions occur. Solely for the con

Identity of Directors, Senior Management and Advisers

Item 1. Identity of Directors, Senior Management and Advisers Not applicable.

Offer Statistics and Expected Timetable

Item 2. Offer Statistics and Expected Timetable Not applicable.

Key Information

Item 3. Key Information Our Holding Company Structure and Contractual Arrangements with the Variable Interest Entity Xunlei Limited is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in the variable interest entity. We conduct our operations in China through (i) our PRC subsidiaries, and (ii) the variable interest entity, with which we maintain contractual arrangements and its subsidiaries in China. PRC laws and regulations place certain restrictions on foreign ownership of companies that engage in value-added telecommunication service, and prohibit foreign investment in internet cultural operating service and online transmission of audio-visual programs service. Accordingly, we operate these businesses in China through the variable interest entity, and rely on contractual arrangements among our PRC subsidiaries, the variable interest entity and its shareholders to control the business operations of the variable interest entity. Revenues contributed by the variable interest entity accounted for 95.47%, 88.12% and 90.67% of our total revenues in 2021, 2022 and 2023, respectively. As used in this annual report, "we," "us," "our company" and "our" refer to Xunlei Limited, its subsidiaries, and, in the context of describing our operations and consolidated financial information, the variable interest entity in China, Shenzhen Xunlei Networking Technologies Co., Ltd., or Shenzhen Xunlei, which was established in January 2003 to operate our Xunlei internet platform together with its various subsidiaries in the PRC. Investors in our ADSs are not purchasing equity interest in the variable interest entity in China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands. A series of contractual agreements, including business operation agreement, equity pledge agreement, powers of attorney, exclusive technology support and services agreement, exclusive technology consulting and training

View Full Filing

View this 20-F filing on SEC EDGAR