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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of December 2022

Commission File Number: 001-40460

KANZHUN LIMITED

18/F, GrandyVic Building,

Taiyanggong Middle Road

Chaoyang District, Beijing 100020

People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F     ___X____          Form 40-F     _________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):________________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):________________

Exhibit Index

Exhibit 99.1 – Unaudited Interim Condensed Consolidated Financial Statements of KANZHUN LIMITED as of and for the Six Months Ended June 30, 2022

Exhibit 99.2 – Unaudited Interim Condensed Consolidated Financial Statements of KANZHUN LIMITED as of and for the Nine Months Ended September 30, 2022

101.INS Inline XBRL Instance Document – this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KANZHUN LIMITED

By:

/s/ Yu Zhang

Name:

Yu Zhang

Title:

Director and Chief Financial Officer

Date: December 16, 2022

140830401140830401100080000121108037140830401

Table of Contents

Exhibit 99.1

KANZHUN LIMITED

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2021 and June 30, 2022

F-2

Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income for the Six Months Ended June 30, 2021 and 2022

F-3

Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2021 and 2022

F-4

Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2022

F-5

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

F-6

F-1

Table of Contents

KANZHUN LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data, unless otherwise noted)

    

As of December 31,

    

As of June 30,

2021

2022

RMB

RMB

ASSETS

 

  

 

  

Current assets

 

  

 

  

Cash and cash equivalents

 

11,341,758

 

12,174,097

Short-term investments

 

884,996

 

812,225

Accounts receivable

 

1,002

 

2,013

Amounts due from related parties

 

6,615

 

9,583

Prepayments and other current assets

 

724,583

 

520,589

Total current assets

 

12,958,954

 

13,518,507

Non-current assets

 

  

 

  

Property, equipment and software, net

 

369,126

 

546,106

Intangible assets, net

 

458

 

413

Right-of-use assets, net

 

309,085

 

303,609

Other non-current assets

 

4,000

 

4,000

Total non-current assets

 

682,669

 

854,128

Total assets

 

13,641,623

 

14,372,635

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

  

Current liabilities (including amounts of the consolidated VIE and VIE’s subsidiaries without recourse to the primary beneficiary of RMB2,762,123 and RMB2,811,310 as of December 31, 2021 and June 30, 2022, respectively)

 

  

 

  

Accounts payable

 

52,963

 

135,273

Deferred revenue

 

1,958,570

 

1,979,056

Other payables and accrued liabilities

 

645,138

 

578,981

Operating lease liabilities, current

 

127,531

 

146,134

Total current liabilities

 

2,784,202

 

2,839,444

Non-current liabilities (including amounts of the consolidated VIE and VIE’s subsidiaries without recourse to the primary beneficiary of RMB178,844 and RMB155,954 as of December 31, 2021 and June 30, 2022, respectively)

 

  

 

  

Operating lease liabilities, non-current

 

183,365

 

166,309

Total non-current liabilities

 

183,365

 

166,309

Total liabilities

 

2,967,567

 

3,005,753

Commitments and contingencies (Note 17)

 

  

 

  

Shareholders’ equity

 

  

 

  

Ordinary shares (US$0.0001 par value; 1,500,000,000 shares authorized; 748,953,103 Class A ordinary shares issued and 727,855,233 outstanding, 140,830,401 Class B ordinary shares issued and outstanding as of December 31, 2021; 749,323,103 Class A ordinary shares issued and 730,777,761 outstanding, 140,830,401 Class B ordinary shares issued and outstanding as of June 30, 2022)

 

554

 

559

Treasury shares (21,097,870 and 18,545,342 shares as of December 31, 2021 and June 30, 2022, respectively)

 

 

(267,982)

Additional paid-in capital

 

14,624,386

 

14,965,856

Accumulated other comprehensive (loss)/income

 

(257,765)

 

281,247

Accumulated deficit

 

(3,693,119)

 

(3,612,798)

Total shareholders’ equity

 

10,674,056

 

11,366,882

Total liabilities and shareholders’ equity

 

13,641,623

 

14,372,635

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-2

Table of Contents

KANZHUN LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME

(All amounts in thousands, except for share and per share data, unless otherwise noted)

    

For the six months ended June 30,

    

2021

    

2022

RMB

RMB

Revenues

  

  

Online recruitment services to enterprise customers

 

1,939,919

 

2,227,184

Others

 

16,798

 

23,040

Total revenues

 

1,956,717

 

2,250,224

Operating cost and expenses

 

  

 

  

Cost of revenues

 

(250,029)

 

(351,578)

Sales and marketing expenses

 

(1,152,780)

 

(921,900)

Research and development expenses

 

(413,728)

 

(598,425)

General and administrative expenses

 

(1,748,612)

 

(316,035)

Total operating cost and expenses

 

(3,565,149)

 

(2,187,938)

Other operating income, net

 

7,657

 

10,743

(Loss)/Income from operations

 

(1,600,775)

 

73,029

Investment income

 

8,629

 

17,075

Financial income, net

 

4,017

 

24,185

Foreign exchange (loss)/gain

 

(586)

 

4,694

Other expenses, net

 

(1,597)

 

(24,539)

(Loss)/Income before income tax expense

 

(1,590,312)

 

94,444

Income tax expense

 

 

(14,123)

Net (loss)/income

 

(1,590,312)

 

80,321

Accretion on convertible redeemable preferred shares to redemption value

 

(164,065)

 

Net (loss)/income attributable to ordinary shareholders

 

(1,754,377)

 

80,321

Net (loss)/income

 

(1,590,312)

 

80,321

Other comprehensive income

 

  

 

  

Foreign currency translation adjustments

 

7,884

 

539,012

Total comprehensive (loss)/income

 

(1,582,428)

 

619,333

Weighted average number of ordinary shares used in computing net (loss)/income per share

 

  

 

  

−Basic

 

147,308,942

 

869,427,036

−Diluted

 

147,308,942

 

917,484,059

Net (loss)/income per share attributable to ordinary shareholders

 

  

 

  

−Basic

 

(11.91)

 

0.09

−Diluted

 

(11.91)

 

0.09

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-3

Table of Contents

KANZHUN LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(All amounts in thousands, except for share and per share data, unless otherwise noted)

    

Ordinary shares

    

Treasury shares

    

    

Accumulated

    

    

Number

other

Total

of shares

Number

Additional

comprehensive

Accumulated

shareholders’

outstanding

    

Amount

of shares

    

Amount

paid-in capital

(loss)/income

deficit

equity

RMB

RMB

RMB

RMB

RMB

RMB

Balance as of January 1, 2021

128,983,824

81

3,657,853

452,234

(130,387)

(2,622,045)

(2,300,117)

Net loss

 

 

 

 

 

 

 

(1,590,312)

 

(1,590,312)

Foreign currency translation adjustments

 

 

 

 

 

 

7,884

 

 

7,884

Share-based compensation

 

 

 

 

 

202,887

 

 

 

202,887

Accretion on convertible redeemable preferred shares to redemption value

 

 

 

 

 

(164,065)

 

 

 

(164,065)

Repurchase and cancellation of Class B ordinary shares (Note 13)

 

(1,181,339)

 

(1)

 

 

 

(42,263)

 

 

 

(42,264)

Issuance of Class A ordinary shares upon initial public offering in the United States of America (“IPO”), net of issuance cost

 

110,400,000

 

70

 

 

 

6,406,802

 

 

 

6,406,872

Conversion of convertible redeemable preferred shares

 

551,352,134

 

353

 

 

 

5,854,308

 

 

 

5,854,661

Issuance of Class B ordinary shares to TECHWOLF LIMITED (Note 13)

 

24,745,531

 

16

 

 

 

1,506,346

 

 

 

1,506,362

Exercise of share-based awards

 

3,657,853

 

2

 

(3,657,853)

 

 

 

 

 

2

Balance as of June 30, 2021

 

817,958,003

 

521

 

 

 

14,216,249

 

(122,503)

 

(4,212,357)

 

9,881,910

    

Ordinary shares

    

Treasury shares

    

    

Accumulated

    

    

Number

other

Total

of shares

Number

Additional

comprehensive

Accumulated

shareholders’

outstanding

    

Amount

of shares

    

Amount

paid-in capital

(loss)/income

deficit

equity

RMB

RMB

RMB

RMB

RMB

RMB

Balance as of January 1, 2022

868,685,634

 

554

 

21,097,870

 

14,624,386

 

(257,765)

 

(3,693,119)

 

10,674,056

Net income

 

80,321

 

80,321

Foreign currency translation adjustments

 

539,012

539,012

Share-based compensation

 

 

 

 

 

283,046

 

 

 

283,046

Issuance of ordinary shares for share award plan

 

 

 

370,000

 

 

 

 

 

Exercise of share-based awards

 

7,069,594

 

5

 

(7,069,594)

 

 

58,424

 

 

 

58,429

Repurchase of ordinary shares (Note 13)

 

(4,147,066)

 

 

4,147,066

 

(267,982)

 

 

 

 

(267,982)

Balance as of June 30, 2022

 

871,608,162

 

559

 

18,545,342

 

(267,982)

 

14,965,856

 

281,247

 

(3,612,798)

 

11,366,882

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-4

Table of Contents

KANZHUN LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands, except for share and per share data, unless otherwise noted)

    

For the six months ended June 30,

2021

    

2022

RMB

RMB

Cash flows from operating activities

  

  

Net (loss)/income

 

(1,590,312)

 

80,321

Adjustments to reconcile net (loss)/income to net cash generated from operating activities:

 

  

 

  

Share-based compensation

 

202,887

 

283,046

Issuance of Class B ordinary shares to TECHWOLF LIMITED (Note 13)

 

1,506,362

 

Depreciation and amortization

 

35,139

 

59,748

Loss from disposal of property, equipment and software

 

42

 

7

Foreign exchange loss/(gain)

 

586

 

(4,694)

Amortization of right-of-use assets

 

43,453

 

68,979

Unrealized investment income

 

(1,294)

 

(2,229)

Changes in operating assets and liabilities:

 

  

 

  

Accounts receivable

 

4,404

 

(1,011)

Prepayments and other current assets

 

(98,442)

 

87,319

Amounts due from related parties

 

1,037

 

(2,968)

Accounts payable

 

62,080

 

17,974

Deferred revenue

 

670,129

 

20,486

Other payables and accrued liabilities

 

39,347

 

(64,074)

Operating lease liabilities

 

(38,875)

 

(61,956)

Net cash generated from operating activities

 

836,543

 

480,948

Cash flows from investing activities

 

  

 

  

Purchase of property, equipment and software

 

(81,374)

 

(173,207)

Proceeds from disposal of property, equipment and software

 

9

 

298

Purchase of short-term investments

 

(2,164,000)

 

(1,450,000)

Proceeds from maturity of short-term investments

 

2,078,000

 

1,525,000

Net cash used in investing activities

 

(167,365)

 

(97,909)

Cash flows from financing activities

 

  

 

  

Proceeds from IPO, net of issuance cost

 

6,423,798

 

Proceeds from exercise of share options

 

 

180,166

Repurchase of Class A ordinary shares

 

 

(267,982)

Repurchase of Class B ordinary shares from TECHWOLF LIMITED

 

(11,584)

 

Net cash generated from/(used in) financing activities

 

6,412,214

 

(87,816)

Effect of exchange rate changes on cash and cash equivalents

 

9,364

 

537,116

Net increase in cash and cash equivalents

 

7,090,756

 

832,339

Cash and cash equivalents at beginning of the period

 

3,998,203

 

11,341,758

Cash and cash equivalents at end of the period

 

11,088,959

 

12,174,097

Supplemental cash flow disclosures

 

  

 

  

Cash paid for income tax

 

 

72,083

Supplemental schedule of non-cash investing and financing activities

 

  

 

  

Accretion on convertible redeemable preferred shares to redemption value

 

164,065

 

Changes in payables for purchase of property, equipment and software

 

(1,895)

 

64,336

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-5

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

1.

PRINCIPAL ACTIVITIES AND ORGANIZATION

(a)

Principal activities

KANZHUN LIMITED (“Kanzhun” or the “Company”) was incorporated under the laws of the Cayman Islands on January 16, 2014 as an exempted company with limited liability. The Company, its subsidiaries, consolidated variable interest entity (the “VIE”) and VIE’s subsidiaries (collectively referred to as the “Group”) run an online recruitment platform called “BOSS Zhipin” in the People’s Republic of China (“PRC”).

The BOSS Zhipin platform mainly focuses on assisting the recruitment process between job seekers and employers. Through BOSS Zhipin platform, employers, mainly executives or middle-level managers of enterprises, could participate directly in the recruiting process.

(b)

Organization of the Group

As of June 30, 2022, the Company’s principal subsidiaries and consolidated VIE are as follows:

Attributable

Place of

Date of

equity interest of

Name of subsidiaries

    

incorporation

    

incorporation

    

the Group

    

Principal activities

Techfish Limited

 

Hong Kong, China

February 14, 2014

 

100%

Investment holding in Hong Kong

Beijing Glory Wolf Co., Ltd. (“Glory”, or the “WFOE”)

 

Beijing, China

May 7, 2014

 

100%

Management consultancy and technical services in the PRC

 

Place of

 

Date of

 

Economic

  

Name of VIE

incorporation

incorporation

interest held

Principal activities

Beijing Huapin Borui Network Technology Co., Ltd. (“Huapin”)

 

Beijing, China

December 25, 2013

 

100%

Online recruitment service in the PRC

(c)

Consolidated variable interest entity

In order to comply with the PRC laws and regulations which prohibit or restrict foreign investments into companies involved in restricted businesses, the Group operates its Apps, websites and other restricted businesses in the PRC through a PRC domestic company and its subsidiaries, whose equity interests are held by certain management members of the Company (“Registered Shareholders”). The Company entered into a series of contractual arrangements, which was updated in September 2022, with such PRC domestic company and its respective Registered Shareholders, which enables the Company to have the power to direct activities of the VIE that most significantly affect the economic performance of the VIE and receive substantially all of the economic benefits from the VIE that could be significant to the VIE. Accordingly, the Company is determined to be the primary beneficiary of the VIE for accounting purposes under U.S. GAAP and therefore the Group consolidates the VIE’s results of operations, assets and liabilities in the Group’s consolidated financial statements for all the periods presented. The principal terms of the agreements entered amongst the VIE, the Registered Shareholders and the WFOE are further described below.

F-6

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

1.

PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED)

(c)

Consolidated variable interest entity (continued)

Exclusive technology and service co-operation agreement

Pursuant to the exclusive technology and service co-operation agreement, the VIE has agreed to engage the WFOE as the exclusive provider of technical consultancy, technical support and other services as agreed. The VIE shall pay service fees to the WFOE, which shall be equivalent to the total consolidated profit of the VIE and its subsidiaries, after offsetting the prior-year accumulated loss (if any), operating cost and expenses, taxes and other statutory contributions. Notwithstanding the foregoing, the WFOE shall have the right to adjust the level of the service fees by taking into account such factors as (a) the complexity and difficulty of the services, (b) the time taken for the services, (c) the scope and commercial value of the management, technical consulting and other services, (d) the scope and commercial value of intellectual property licensing and leasing services, and (e) the market reference price for services of similar kinds. The VIE shall pay the service fees to the WFOE within 30 days after the delivering of payment instructions by the WFOE.

The exclusive technology and service co-operation agreement shall remain effective until, among others, the date on which the WFOE or its designated party is formally registered as the shareholder of the VIE, in the case where the WFOE is permitted by the PRC laws to directly hold the VIE’s shares and the WFOE and its subsidiaries and branches are allowed to engage in the business being currently operated by the VIE.

Exclusive purchase option agreement

Pursuant to the exclusive purchase option agreement, the Registered Shareholders of the VIE have granted the WFOE, or its offshore parent company or its directly or indirectly owned subsidiaries, the exclusive and irrevocable right to purchase all or any part of the respective equity interests in the VIE from the Registered Shareholders at any time. The VIE and the Registered Shareholders irrevocably covenanted that unless with prior written consent by the WFOE, the VIE shall not sell, transfer, pledge, or otherwise dispose all or any part of its assets, and the Registered Shareholders shall not sell, transfer, pledge, or otherwise dispose all or any part of their equity interest in the VIE, other than the creation of the pledge of the VIE’s equity interest pursuant to the contractual arrangements. The purchase price payable by the WFOE or its designee in respect of the transfer of the entire equity interest and/or total assets of the VIE shall be the nominal price, or the minimum price required by competent PRC authorities or PRC laws. However, in any event, subject to the provisions and requirements of PRC laws, the price paid by the WFOE and/or its designee to the VIE and/or Registered Shareholders at any such price shall be returned by the VIE and/or Registered Shareholders to the WFOE at the time and in the form requested by the WFOE.

The exclusive purchase option agreement shall remain effective for ten years with the WFOE having the option to renew it until, among others, all the equity interest in and/or all assets of the VIE has been transferred to the WFOE and/or its designee (registration has been completed for the change of members), and the WFOE and its subsidiaries and branches can legally engage in the business of the VIE.

F-7

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

1.

PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED)

(c)

Consolidated variable interest entity (continued)

Equity pledge agreement

Pursuant to the equity pledge agreement, the Registered Shareholders of the VIE have pledged 100% equity interests in the VIE to the WFOE to guarantee performance of their contractual obligations under the contractual arrangements and all liabilities, monetary debts or other payment obligations arising out of or in relation with the contractual arrangements. In the event of a breach by the VIE or any of its Registered Shareholders of contractual obligations under the exclusive technology and service co-operation agreement, and the equity pledge agreement, as the case may be, the WFOE, as pledgee, will have the right to (1) demand all the outstanding payment due according to the exclusive technology and service co-operation agreement, and/or (2) exercise its right of pledge according to the equity pledge agreement, or otherwise dispose of the pledged equity interest in accordance with applicable Laws.

The equity pledge agreement shall remain valid until, among others, the VIE and the Registered Shareholders have recorded the release of such pledged equity interests in the register of members of the VIE and completed relevant deregistration procedure.

Spousal consent letter

Pursuant to the spousal consent letter, the spouse of each Registered Shareholder who is a natural person, unconditionally and irrevocably agreed that the equity interests in the VIE held by such Registered Shareholder will be disposed of pursuant to the equity pledge agreement, the exclusive purchase option agreement and the power of attorney (as the case may be). Each of their spouses agreed not to assert any rights over the equity interests in the VIE held by such Registered Shareholder. In addition, in the event that any spouse obtains any equity interests in VIE held by such Registered Shareholder for any reason, he or she agreed to be bound by the equity pledge agreement, the exclusive purchase option agreement and the power of attorney.

Power of attorney

Pursuant to the power of attorney, each of the Registered Shareholders appointed the WFOE and/or its designee as their sole and exclusive agent to act on their behalf, including but not limited to (1) to propose, convene and attend shareholders meetings and sign minutes and resolutions, (2) to exercise all shareholder rights that they are entitled to under PRC law and the relevant articles of association, including but not limited to, the right to vote and the right to sell, transfer, pledge or disposal of all or part of the equity interests owned by such shareholders; and (3) to elect, designate and appoint the legal representative, chairman, directors, supervisors, general manager and other senior executives of the VIE.

F-8

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

1.

PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED)

(d)

Risks in relations to the VIE structure

The following table set forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the consolidated VIE and VIE’s subsidiaries taken as a whole, which were included in the Group’s unaudited interim condensed consolidated financial statements with intercompany transactions eliminated:

    

As of December 31,

    

As of June 30,

2021

2022

RMB

RMB

ASSETS

 

  

 

  

Current assets

Cash and cash equivalents

 

864,851

 

1,245,088

Short-term investments

 

864,557

 

802,159

Accounts receivable

 

1,002

 

1,946

Amounts due from Group companies

 

86,989

 

100,805

Amounts due from related parties

 

6,615

 

9,583

Prepayments and other current assets

 

487,598

 

450,841

Total current assets

 

2,311,612

 

2,610,422

Non-current assets

Property, equipment and software, net

 

368,381

 

544,171

Intangible assets, net

 

458

 

413

Right-of-use assets, net

 

301,288

 

287,032

Other non-current assets

 

4,000

 

4,000

Total non-current assets

 

674,127

 

835,616

Total assets

 

2,985,739

 

3,446,038

LIABILITIES

 

  

 

  

Current liabilities

Accounts payable

 

52,938

 

135,098

Deferred revenue

 

1,958,570

 

1,979,019

Other payables and accrued liabilities

 

626,151

 

557,568

Amounts due to Group companies

 

27,223

 

37,362

Operating lease liabilities, current

 

124,464

 

139,625

Total current liabilities

 

2,789,346

 

2,848,672

Non-current liabilities

Operating lease liabilities, non-current

 

178,844

 

155,954

Total non-current liabilities

 

178,844

 

155,954

Total liabilities

 

2,968,190

 

3,004,626

F-9

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

1.

PRINCIPAL ACTIVITIES AND ORGANIZATION (CONTINUED)

(d)

Risks in relations to the VIE structure (continued)

    

For the six months ended June 30,

2021

2022

    

RMB

    

RMB

Total revenues

 

1,956,717

 

2,250,118

Cost of revenues

 

(250,007)

 

(351,566)

Net (loss)/income

 

(41,429)

 

162,265

    

For the six months ended June 30,

2021

    

2022

RMB

RMB

Net cash generated from operating activities

 

861,135

 

486,939

Net cash used in investing activities

 

(167,365)

 

(106,702)

Net cash used in financing activities

 

(438,586)

 

Net increase in cash and cash equivalents

 

255,184

 

380,237

Cash and cash equivalents at beginning of the period

 

183,199

 

864,851

Cash and cash equivalents at end of the period

 

438,383

 

1,245,088

Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE through the WFOE that most significantly impact the VIE such as having assets transferred out of the VIE at its discretion. Therefore, the Company considers that there is no asset of the VIE that can be used to settle obligations of the VIE except for registered capital and PRC statutory reserves of the VIE amounting to RMB9,002 and RMB9,002 as of December 31, 2021 and June 30, 2022, respectively. Since the VIE was incorporated as a limited liability company under the PRC Company Law, the creditors do not have recourse to the general credit of the WFOE for all the liabilities of the VIE.

The Group believes that the contractual arrangements between or among the WFOE, VIE and the Registered Shareholders are following PRC laws and regulations, as applicable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. On March 15, 2019, the PRC Foreign Investment Law was approved and took effect from January 1, 2020. Since the PRC Foreign Investment Law is relatively new, there are substantial uncertainties exist with respect to its implementation and interpretation and the possibility that the VIE will be deemed as a foreign-invested enterprise and subject to relevant restrictions in the future shall not be excluded. If the contractual arrangements establishing the Company’s VIE structure are found to be in violation of any existing law and regulations or future PRC laws and regulations, the relevant PRC government authorities will have broad discretion in dealing with such violation, including, without limitation, levying fines, confiscating the Group’s income or the income from the VIE, revoking the Group’s business licenses or the business licenses, requiring the Group to restructure its ownership structure or operations and requiring the Group to discontinue any portion or all of the Group’s value-added businesses or other prohibited businesses. Any of these actions could cause significant disruption to the Company’s business operations and have a severe adverse impact on the Company’s cash flows, financial position and operating performance. If the imposing of these penalties causes the WFOE to lose its rights to direct the activities of and receive economic benefits from the VIE, which in turn may restrict the Company’s ability to consolidate and reflect in its financial statements the financial position and results of operations of its VIE.

(e)

COVID-19 impact and liquidity

The Group’s financial performance was impacted by the COVID-19 although the pandemic had been largely contained in China. However, based on the assessment on the Group’s liquidity and financial positions, the Group believes that its current cash and cash equivalents will be sufficient to enable it to meet its anticipated working capital requirements and capital expenditures for at least the next twelve months from the date these unaudited interim condensed consolidated financial statements are issued.

F-10

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES

2.1

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Significant accounting policies followed by the Group in the preparation of its accompanying unaudited interim condensed consolidated financial statements are summarized below.

2.2

Basis of consolidation

The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries for which the Company is the ultimate primary beneficiary.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

The Company applies the guidance codified in ASC 810, Consolidations on accounting for the VIE, which requires certain variable interest entities to be consolidated by the primary beneficiary of the entity in which it has a controlling financial interest. A VIE is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional financial support; (b) as a group, the holders of the equity investment at risk lack the ability to make certain decisions, the obligation to absorb expected losses or the right to receive expected residual returns; or (c) an equity investor has voting rights that are disproportionate to its economic interest and substantially all of the entity’s activities are on behalf of the investor with disproportionately fewer voting rights.

All transactions and balances between the Company, its subsidiaries, the consolidated VIE and VIE’s subsidiaries have been eliminated upon consolidation.

2.3

Use of estimates

The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reporting periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Accounting estimates reflected in the Group’s unaudited interim condensed consolidated financial statements include but are not limited to the useful lives of property, equipment and software, impairment of long-lived assets, valuation allowance for deferred tax assets, valuation of ordinary shares and share-based compensation. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable under current circumstances. Actual results could differ from those estimates.

2.4

Foreign currency

The Group’s reporting currency is RMB. The functional currency of the Company and subsidiaries incorporated in Hong Kong and United States of America, is the United States dollars (“US$”). The functional currency of the Group’s PRC subsidiaries, consolidated VIE and VIE’s subsidiaries is RMB. The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters.

F-11

Table of Contents

KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.4

Foreign currency (continued)

Transactions denominated in currencies other than the functional currency are translated into the functional currency of the entity at the exchange rates quoted by authoritative banks prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Exchange gain or loss resulting from those foreign currency transactions denominated in foreign currencies is recorded in the Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income.

The financial statements of the Company and subsidiaries located outside of the PRC are translated from their functional currency into RMB. Their assets and liabilities are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gain and loss are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive income in the consolidated financial statements.

2.5

Fair value measurement

Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 — Unobservable inputs which are supported by little or no market activity.

Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount and the measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

Financial assets and liabilities of the Group mainly consist of cash and cash equivalents, short-term investments, accounts receivables, amounts due from related parties, prepayments and other current assets, accounts payable, certain accrued expenses and other current liabilities. Except for short-term investments, the carrying values of other financial assets and liabilities approximate their fair values due to the short-term maturity of these instruments. The Group reports short-term investments at fair value based on Level 2 measurement.

2.6

Cash and cash equivalents

Cash includes cash on hand and deposits held by financial institutions that can be added to or withdrawn without limitation or restriction. Cash equivalents represent short-term, highly liquid investments that are readily convertible to known amounts of cash and with original maturities of three months or less.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.7

Short-term investments

Short-term investments are wealth management products issued by commercial banks or other financial institutions, which contains fixed or variable interest with original maturities within one year. These investments are stated at fair value. Changes in the fair value are reflected in investment income in the Consolidation Statements of Comprehensive (Loss)/Income.

2.8

Accounts receivable

Accounts receivable are presented net of allowance for doubtful accounts (if any). The Group provides general and specific provisions for bad debts when facts and circumstances indicate that the receivables are unlikely to be collected. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. No allowance for doubtful accounts was recognized for the six months ended June 30, 2021 and 2022.

2.9

Property, equipment and software

Property, equipment and software are stated at cost less accumulated depreciation and impairment, if any. Property, equipment and software are depreciated at rates sufficient to write off their cost less impairment and residual value, if any, over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows:

Category

    

Estimated useful lives

Electronic equipment

3-5 years

Leasehold improvement

Shorter of lease term or estimated useful life of the assets

Furniture and fixtures

5 years

Motor vehicles

3-5 years

Software

5 years

The majority of electronic equipment includes servers. The Group recognized the gain or loss on the disposal of property, equipment and software in the Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss)/Income.

2.10

  Intangible assets

Intangible assets purchased are recognized and measured at cost less accumulated amortization and impairment, if any. Intangible assets are amortized using the straight-line method over the estimated useful lives as below:

Category

    

Estimated useful lives

Domains

10 years

The estimated useful lives of domains are the periods over which they are expected to be available for use by the Group, which are mainly determined based on the periods of effective registration of the domains.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.11

  Impairment of long-lived assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than that the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the asset, the Group recognizes an impairment loss based on the excess of the carrying value of the asset over the fair value of the asset. No impairment of long-lived assets was recognized for the six months ended June 30, 2021 and 2022.

2.12

  Revenue recognition

The Group accounted for revenue under ASC 606, Revenue from Contracts with Customers, and all periods have been presented under ASC 606. Consistent with the criteria of ASC 606, the Group recognizes revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the Group expects to receive in exchange for those services.

To achieve that core principle, the Group applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) a performance obligation is satisfied.

According to ASC 606, revenue is recognized net of value-added tax (“VAT”) when or as the control of services is transferred to a customer. Depending on the terms of the contract, control of services may be transferred over time or at a point in time. Control of services is transferred over time if the Group: (i) provides all of the benefits received and consumed simultaneously by the customer; (ii) creates and enhances an asset that the customer controls as the Group performs; or (iii) does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of services is transferred over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the services.

Online recruitment services to enterprise customers

The Group provides online recruitment services carrying different kinds of features to enterprise customers, including direct recruitment services such as job postings, and value-added tools such as bulk invite sending, which could be purchased as a part of subscription packages or on a standalone basis.

Based on the pattern by which the Group provides services and how enterprise customers benefit from services, these services can be divided into two categories in terms of revenue recognition: (i) services over a particular subscription period, which provide enterprise customers certain rights during a particular subscription period; for example, paid job postings allow enterprise customers to present certain job positions, receive job seeker recommendations, browse the mini-resume of and chat with a certain number of job seekers in its platform during the subscription period; and (ii) services with definite and limited number of usages within an expiration period, such as bulk invite sending and advanced filer. Accordingly, the Group recognizes its revenues from online recruitment services either over time or at a point in time as following:

For services over a particular subscription period, the Group has a stand-ready obligation to deliver the corresponding services on a when-and-if-available basis during the subscription period and enterprise customers simultaneously and continuously receive and consume the benefits as the Group provides the services throughout the subscription period. Therefore, a time-based measure of progress best reflects the satisfaction of the performance obligations and the Group recognizes revenues on a straight-line basis over the subscription period. Revenues recognized over time for the six months ended June 30, 2021 and 2022 were RMB1,338,480 and RMB1,647,892, respectively.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.12  Revenue recognition (continued)

For services with definite and limited number of usages within an expiration period, upon the delivery of the individual services, the Group satisfies its performance obligations and enterprise customers benefit from its performance obligations, and therefore revenues are recognized at a point in time; and if these services are unused within the expiration period, the Group recognizes the relevant revenues when they expire. Revenues recognized at a point in time for the six months ended June 30, 2021 and 2022 were RMB601,439 and RMB579,292, respectively.

Other services

Other services mainly represent paid value-added tools offered to job seekers such as increased exposure of resume and candidate competitive analysis.

The Group defines enterprise customers who contributed revenue of RMB50 or more annually as key accounts, who contributed revenue between RMB5 and RMB50 annually as mid-sized accounts, and who contributed revenue of RMB5 or less annually as small-sized accounts.

    

For the six months ended June 30,

    

2021

    

2022

RMB

RMB

Online recruitment services to enterprise customers

– Key accounts

362,763

517,925

– Mid-sized accounts

633,685

 

910,848

– Small-sized accounts

943,471

 

798,411

Others

16,798

 

23,040

Total

1,956,717

 

2,250,224

Arrangements with multiple performance obligations

Multiple performance obligations exist when enterprise customers purchase subscription packages which include an array of services. For those services included in subscription packages, the selling prices are consistently made references to the standalone selling prices when sold separately. The Group allocates the transaction price to each performance obligation based on the relative standalone selling price, considering bulk-sale price discounts offered to certain enterprise customers where applicable.

Deferred revenue

The Group records deferred revenue when the Group receives customers’ payments in advance of transferring control of services to customers. Substantially all deferred revenue recorded are expected to be recognized as revenues in the next twelve months.

Remaining performance obligations

Remaining performance obligations represent the amount of contracted future revenues not yet recognized as the amount relate to undelivered performance obligations. Substantially all of the Group’s contracts with customers are within one year in duration. As such, the Group has elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

2.13  Cost of revenues

Cost of revenues consist primarily of settlement cost of third-party on-line payment platforms, payroll and other employee-related expenses, server and bandwidth service cost, server depreciation and other expenses incurred by the Group which are directly attributable to the performance of the Group’s online recruitment services.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.14

  Sales and marketing expenses

Sales and marketing expenses consist primarily of advertising expenses, payroll and other employee- related expenses for the Group’s sales and marketing staff as well as other expenses such as office rental and property management fees for sales functions. Advertising expenses generally represent online traffic acquisition and branding activities cost. For the six months ended June 30, 2021 and 2022, advertising expenses totaled RMB723,724 and RMB348,594, respectively.

2.15  Research and development expenses

Research and development expenses primarily consist of payroll and other employee-related expenses and other expenses such as office rental and property management fees for research and development functions. All research and development costs are expensed as incurred.

2.16  General and administrative expenses

General and administrative expenses consist primarily of payroll and other employee-related expenses for the Group’s managerial and administrative staff and other expenses such as office rental and property management fees.

2.17

  Employee benefits

Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries, VIE and VIE’s subsidiaries of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses contributed by the Group, including accrued and unpaid amounts, were RMB109,040 and RMB171,116 for the six months ended June 30, 2021 and 2022, respectively.

2.18  Share-based compensation

The Group grants share options and restricted share units (“RSUs”) to its management, other key employees and eligible nonemployees. Such compensation is accounted for in accordance with ASC 718, Compensation — Stock Compensation. The Group adopted ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, for the periods presented. Under ASU 2018-07, the accounting for nonemployees’ share-based awards is similar to the model for employee awards. And forfeitures are accounted for when they occur.

Share-based awards with service conditions only are measured at the grant-date fair value of the awards and recognized as expenses using the straight-line method over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of an IPO or change of control as a performance condition, are measured at the grant-date fair value, and cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the Company’s IPO in June 2021.

The fair value of share options is estimated using the binomial option-pricing model. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and nonemployee share option exercise behavior, risk-free interest rates and expected dividend yield. Binomial option-pricing model incorporates the assumptions about grantees’ future exercise patterns. The fair value of these awards was determined by management with the assistance from an independent valuation firm using management’s estimates and assumptions. The fair value of the RSUs, which were granted subsequent to the completion of the Company’s IPO, is estimated based on the fair value of the underlying ordinary shares of the Company on the grant date.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.18  Share-based compensation (continued)

The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards.

2.19  Operating leases

The Group applied ASC 842, Leases, on January 1, 2019 on the modified retrospective basis. The Group determines if an arrangement is a lease at inception. Operating leases are primarily for office and are included in operating lease right-of-use assets and operating lease liabilities on the Consolidated Balance Sheets. Operating lease right-of-use assets represent the Group’s right to use an underlying asset for the lease term and operating lease liabilities represent obligation to make lease payments arising from the lease. The operating lease right-of-use assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The Group’s lease term may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. And the Group has elected the practical expedient to account for lease and non-lease components as a single lease component. Upon the adoption of ASC 842, the Group recognized operating lease assets of RMB50,570 and operating lease liabilities of RMB50,089 on the Consolidated Balance Sheets.

For operating lease with a term of one year or less, the Group has elected to not recognize a lease liability or lease right-of-use asset on its Consolidated Balance Sheets. Instead, it recognizes the lease payments as expenses on a straight-line basis over the lease term. Short-term lease expenses are immaterial to its Consolidated Statements of Comprehensive (Loss)/Income.

2.20  Taxation

Current income taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Group accounts for deferred income taxes under the liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the financial statements and their respective tax basis, and operating loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in the Consolidated Statements of Comprehensive (Loss)/Income in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it is considered more likely than not that amount of the deferred tax assets will not be realized.

The Group recognizes in its consolidated financial statements the benefit of a tax position if the tax position is more likely than not to prevail based on the facts and technical merits of the position. Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group estimates its liability for unrecognized tax benefits which are periodically assessed and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in some cases, appeal or litigation process. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements in the period in which the audit is concluded. Additionally, in future periods, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of June 30, 2022, the Group did not have any significant unrecognized uncertain tax positions.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.21  Statutory reserves

The Company’s subsidiaries, consolidated VIE and VIE’s subsidiaries established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to the foreign investment enterprises established in the PRC, the Group’s subsidiaries registered as wholly owned foreign enterprises have to make appropriations from their after-tax profits as determined under the PRC GAAP to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund on an annual basis. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion.

In addition, in accordance with the PRC Company Law, the Group’s consolidated VIE and VIE’s subsidiaries, registered as Chinese domestic companies, must make appropriations from their after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund on an annual basis. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under the PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the respective company.

The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation.

No appropriation to any reserve fund was made for the six months ended June 30, 2021 and 2022.

2.22  Comprehensive income/(loss)

Comprehensive income/(loss) is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding those resulting from investments by shareholders and distributions to shareholders. The Group recognizes foreign currency translation adjustments as other comprehensive income/(loss) in the consolidated financial statements. As such adjustments do not incur income tax obligations, there are no tax adjustments to arrive at other comprehensive income/(loss) on a net-of-tax basis.

2.23  Segment reporting

In accordance with ASC 280, Segment Reporting, the Group’s chief operating decision maker has been identified as the Chief Executive Officer (the “CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole. Therefore, the Group has only one reportable segment. As the Group’s long-lived assets are substantially located in the PRC and substantially all the Group’s revenues are derived from entities within the PRC, no geographical segments are presented.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

2.

PRINCIPAL ACCOUNTING POLICIES (CONTINUED)

2.24  Net income/(loss) per share

Basic net income/(loss) per share is computed by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The net income/(loss) will be adjusted by deducting (1) dividends declared in the period on preferred shares (if any), (2) cumulative dividends on preferred shares (whether or not declared) and (3) deemed dividends as required by U.S. GAAP. Diluted net income/(loss) per share is calculated by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares consist of shares issuable upon the conversion of the preferred shares using the if-converted method, for periods prior to the completion of the Company’ IPO in June 2021, unvested RSUs and shares issuable upon the exercise of share options using the treasury stock method. The computation of diluted net income/(loss) per share does not assume conversion, exercise or contingent issuance of securities that would have an anti-dilutive effect.

The two-class method is used for computing net income per share in the event the Group has net income available for distribution. Using the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights, if applicable. Prior to the completion of the Company’ IPO in June 2021, the computation of basic net loss per share using the two-class method was not applicable as the Company was in a net loss position and the participating securities did not have contractual obligations to share in the loss of the Company. After the completion of the IPO, net income/(loss) per share is computed on Class A ordinary shares and Class B ordinary shares combined basis, because both classes have the same dividend rights in the Company’s undistributed net income.

2.25  Recent accounting pronouncements

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, to remove specific exceptions to the general principles in Topic 740 and to simplify the accounting for income taxes. The standard is effective for public companies for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Group adopted this ASU from January 1, 2022, which didn’t have a material impact on the consolidated financial statements.

Recent accounting pronouncements not yet adopted

In June 2016, the FASB amended guidance related to the expected credit loss of financial instruments as part of ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In November 2019, the FASB issued ASU 2019-10, which amends the effective date for credit losses as follows: for public business entities that meet the definition of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC, the standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; for all other entities, the standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The standard is effective for the Group’s fiscal year beginning January 1, 2023. The ASU is not expected to have a material impact on the consolidated financial statements.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

3.

CONCENTRATION AND RISKS

3.1

Concentration of credit risk

Financial instruments that potentially expose the Group to the concentration of credit risk primarily consist of cash and cash equivalents and short-term investments. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. The Group places its cash and cash equivalents and short-term investments with financial institutions with high-credit rating and quality. The Group hasn’t noted any significant credit risk.

3.2

Concentration of customers

Substantially all revenues were derived from customers located in China. No customer accounted for greater than 10% of total revenues of the Group in any of the periods presented.

3.3

Foreign currency exchange rate risk

In July 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the US$, and the RMB appreciated more than 20% against the US$ over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the US$ remained within a narrow band. Since June 2010, the RMB has fluctuated against the US$, at times significantly and unpredictably. The depreciation of the RMB against the US$ was approximately 1.7% in 2019. The appreciation of the RMB against the US$ was approximately 6.5% and 2.3% in 2020 and 2021, respectively. The depreciation of the RMB against the US$ was approximately 5.3% for the six months ended June 30, 2022. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the US$ in the future.

4.

SHORT-TERM INVESTMENTS

As of December 31,

As of June 30,

    

2021

    

2022

RMB

RMB

Wealth management products

 

884,996

 

812,225

The investment income from wealth management products for the six months ended June 30, 2021 and 2022 was RMB8,629 and RMB17,075, respectively.

5.

PREPAYMENTS AND OTHER CURRENT ASSETS

    

As of December 31,

    

As of June 30, 

2021

2022

    

RMB

    

RMB

Prepaid advertising expenses and service fee

 

234,490

 

134,821

Receivables related to the exercise of share-based awards*

 

289,822

 

166,202

Receivables from third-party on-line payment platforms

 

63,866

 

77,608

Deposits

 

63,814

 

64,646

Staff loans and advances

 

52,695

 

53,798

Others

 

19,896

 

23,514

Total

 

724,583

 

520,589

*

It mainly represented receivables from a third-party share option brokerage platform for the exercise of share-based awards due to the timing of settlement.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

6.PROPERTY, EQUIPMENT AND SOFTWARE, NET

    

As of December 31,

    

As of June 30, 

2021

2022

RMB

RMB

Electronic equipment

 

429,683

 

642,042

Leasehold improvement

 

65,885

 

86,129

Furniture and fixtures

 

12,784

 

15,912

Motor vehicles

 

3,904

 

3,904

Software

 

3,126

 

4,055

Total cost

 

515,382

 

752,042

Less: accumulated depreciation

 

(146,256)

 

(205,936)

Total property, equipment and software, net

 

369,126

 

546,106

Depreciation expenses were RMB35,094 and RMB59,703 for the six months ended June 30, 2021 and 2022, respectively.

7.ACCOUNTS PAYABLE

    

As of December 31,

    

As of June 30, 

2021

2022

RMB

RMB

Payables for purchase of property, equipment and software

19,987

84,323

Payables for advertising expenses

 

30,646

 

39,870

Others

 

2,330

 

11,080

Total

 

52,963

 

135,273

8.

OTHER PAYABLES AND ACCRUED LIABILITIES

    

As of December 31,

    

As of June 30, 

2021

2022

RMB

RMB

Salary, welfare and bonus payable

373,286

359,477

Tax payable(1)

 

218,419

 

148,783

Virtual accounts used in the Group’s platform(2)

 

41,070

 

47,748

Contingent liability (Note 17)

 

 

14,882

Others

 

12,363

 

8,091

Total

 

645,138

 

578,981

(1)Tax payable mainly included value-added tax, enterprise income tax and individual income tax payable mainly related to the exercise of share-based awards.
(2)It represents the advance payments from customers that were refundable and stored in their own virtual accounts in the Group’s platform, which they have rights to exchange for services provided on the online recruitment platform.

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KANZHUN LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)

(All amounts in thousands, except for share and per share data, unless otherwise noted)

9.

OPERATING LEASE

The Group has operating leases primarily for offices. The components of lease expenses are as follows:

    

For the six months ended June 30,

    

2021

    

2022

RMB

RMB

Operating lease expenses

 

49,357

 

76,627

Expenses for short-term leases within 12 months

 

1,104

 

922

Total lease expenses

 

50,461

 

77,549

Supplemental balance sheet information related to operating leases is as follows:

    

As of December 31,

    

As of June 30,

2021

2022

RMB

RMB

Right-of-use assets

 

309,085

 

303,609

Operating lease liabilities, current

 

127,531

 

146,134

Operating lease liabilities, non-current

 

183,365

 

166,309

Total operating lease liabilities