(*)	As of December 31, 2019, the weighted average remaining life of the intangible assets not included in Yonghui’s consolidated financial statements was 15 years.

As of December 31,

2017,

2018 and 2019, the market value of the Group’s investment in Yonghui was

RMB9,666,167

RMB8,609,614 and RMB8,248,601 based on its quoted closing price, respectively.

The proportionate share of Yonghui’s net income recorded in “share of results of equity investees” in the consolidated statements of operations and comprehensive income/(loss) was a gain of RMB122,893, RMB96,558 and RMB164,068 for the years ended December 31, 2017, 2018 and 2019, respectively. The following table includes the

results of operations of Yonghui for each of the periods presented.


	For the year ended December 31, 2017			For the year ended December 31, 2018			For the year ended December 31, 2019
	RMB			RMB			RMB
Revenue s		55,524,229			67,975,691			81,367,849
Gross profit		11,319,620			14,912,887			18,019,934
Income from operations		2,065,795			1,296,271			2,024,586
Net income		1,721,628			1,189,513			1,774,888
Net income attributable to shareholders		1,818,910			1,548,833			2,000,842
Percentage of ownership in Yonghui		10	%		12	%		12	%

Proportionate share of Yonghui’s net income, before basis adjustments		181,891			160,630			232,580
Basis adjustments		(58,998	)		(64,072	)		(68,512	)

Proportionate share of Yonghui’s net income		122,893			96,558			164,068

Investment in Bitauto

On February 16, 2015, the Group completed its investment in Bitauto through the subscription of newly issued ordinary shares, representing approximately 25% of the outstanding ordinary shares of Bitauto. Bitauto is a leading provider of internet content and marketing services for China’s fast-growing automotive industry that is listed on Nasdaq. Total consideration for the initial investment in Bitauto was RMB5,496,188 with a combination of RMB2,450,920 in cash and RMB3,045,268 in the form of future services, including exclusive access to the new and used car channels on the

JD Platform and additional support

from

the Group’s key platforms for a period of 5 years. On June 17, 2016, the Group additionally acquired Bitauto’s newly issued ordinary shares by paying the cash consideration of RMB328,975. As of December 31, 2019, the Group held approximately 24% of Bitauto’s issued and outstanding shares.

Investment in Bitauto is accounted for using the equity method with the investment cost allocated as follows:


	As of December 31, 2017			As of December 31, 2018			As of December 31, 2019
	RMB			RMB			RMB
Carrying value of investment in Bitauto (*)		2,128,409			2,544,367			1,817,781
Proportionate share of Bitauto’s net tangible and intangible assets		2,228,925			2,619,609			2,347,924

Positive/(negative) basis difference		(100,516	)		(75,242	)		(530,143	)

Positive/(negative) basis difference has been assigned to:
Goodwill (*)		—			—			—
Amortizable intangible assets (**)		(100,516	)		(75,242	)		(530,143	)

		(100,516	)		(75,242	)		(530,143	)


Cumulative losses in equity interest in Bitauto		(3,696,754	)		(3,280,796	)		(3,910,223	)

(*)

In the first quarter of 2019, the Group conducted impairment assessment on its investment in Bitauto considering the duration and severity of the decline of Bitauto’s stock price after the investment, as well as the financial condition, operating performance and the prospects of Bitauto, and concluded the decline in fair value of the investment was other-than-temporary. Accordingly, the Group recorded impairment charge of RMB488,453 to write down the carrying value of its investment in Bitauto to the fair value, based on quoted closing price of Bitauto’s stock as of March 31, 2019.

(**)	As of December 31, 2019, the negative basis difference between carrying value of investment in Bitauto and proportionate share of Bitauto’s net tangible and intangible assets was RMB530,143. This difference would not be amortized.

As of December 31, 2017, 2018 and 2019, the market value of the Group’s investment in Bitauto was approximately RMB3,773,634 and

RMB

3,087,400

and RMB

1,793,871

based on its quoted closing price, respectively.

Investment in Dada

In April 2016, the Group signed series of agreements with Dada, China’s largest crowdsourcing delivery platform. The Group obtained a) the newly issued ordinary shares of Dada which represents approximately 81% of the issued and outstanding ordinary shares, or approximately 41% of the equity interests of Dada on a fully diluted basis, b) the newly issued preferred shares of Dada which represents approximately 7% of the equity interest in Dada on a fully diluted basis, and c) a warrant to purchase additional preferred shares of Dada at a

pre-determined

price for the next 2 years. Total consideration for the above investments and warrant was RMB3,508,200 with a combination of RMB1,298,700 in cash, the Group’s future services, including supply chain support for a period of 10 years, traffic and other additional support for a period of 7 years,

non-compete

obligation in O2O business for a period of 7 years, and the Group’s O2O business, JD Daojia. The Group holds

two

board seats out of

six

with the founder of Dada holding the casting vote after the transaction.

With the assistance of an independent appraiser, the Group estimated the fair value of the assets/investments received as follows:


	As of April 26, 2016
	RMB
Assets/investments received by the Group
Dada’s ordinary shares		2,164,050
Dada’s preferred shares		1,298,700
Warrant to purchase Dada’s preferred shares		45,450

		3,508,200

The investment in Dada’s ordinary shares is accounted for using the

equity

method with the investment cost allocated as follows:


	As of December 31, 2017			As of December 31, 2018			As of December 31, 2019
	RMB			RMB			RMB
Carrying value of investment in Dada’s ordinary shares		139,147			—			—
Proportionate share of Dada’s net tangible and intangible assets		(1,579,323	)		(1,709,458	)		(1,701,718	)

Positive basis difference		1,718,470			1,709,458			1,701,718

Positive basis difference has been assigned to:
Goodwill		1,605,891			1,605,891			1,605,891
Amortizable intangible assets (*)		150,105			138,089			127,770
Deferred tax liabilities		(37,526	)		(34,522	)		(31,943	)

		1,718,470			1,709,458			1,701,718


Cumulative losses in equity interest in Dada’s ordinary shares		(2,024,903	)		(2,164,050	)		(2,164,050	)

(*)	As of December 31, 2019, the weighted average remaining life of the intangible assets not included in Dada’s consolidated financial statements was 6 years.

The investment in Dada’s preferred shares is accounted for under the Measurement Alternative as the underlying preferred shares were not considered

in-substance

common stock and had no readily determinable fair value as of December 31, 2019. The warrant is a freestanding financial instrument and was recorded at fair value of RMB45,450 upon initial recognition. On December 28, 2017, the Group exercised the warrant in entirety in cash and purchased additional preferred shares of Dada, at the

pre-determined

price with the total consideration of RMB983,820. On August 9, 2018, the Group further invested RMB1,230,808 to acquire the newly issued preferred shares of Dada. The Group’s investment in Dada’s ordinary shares has been reduced to

zero

in 2018. According to ASC

323-10-35-25,

as the Group’s total investment in Dada includes the preferred shares investment, the

Group

should continue to recognize Dada’s losses up to the Group’s carrying value in the preferred shares investment. As of December 31, 2019, the Group recognized a cumulative loss of RMB1,373,385 against the investment in Dada’s preferred shares based on the ownership level and seniority of preferred shares investment the Group held in Dada. As of December 31, 2019, the carrying amount of preferred shares of Dada was RMB2,376,775.

Investment in Tuniu

In December 2014, the Group acquired 7% equity interest in Tuniu with cash consideration of RMB305,930. Tuniu is a leading online leisure travel company in China that is listed on Nasdaq. The Group accounted for the

nitial

nvestment as an

available-for-sale

security.

On May 22, 2015, the Group additionally acquired Tuniu’s newly issued ordinary shares for total consideration of RMB2,188,490 with a combination of RMB1,528,275 in cash and RMB660,215 in the form of future services, including granting Tuniu an exclusive right

, for a period of 5 years, to operate the leisure travel channels on the

JD Platform, and Tuniu

becomes the Group’s preferred partner for hotel and air ticket booking services. After the subsequent investment in May 2015, the Group held approximately 28% of Tuniu’s issued and outstanding shares and had

one

board seat. Hence, the Group adopted equity method of accounting to account for the investment in Tuniu.

Investment in Tuniu is accounted for using the equity method with the investment cost allocated as follows:


	As of December 31, 2017			As of December 31, 2018			As of December 31, 2019
	RMB			RMB			RMB
Carrying value of investment in Tuniu (*)		947,500			858,566			457,443
Proportionate share of Tuniu’s net tangible and intangible assets		779,525			714,009			633,295

Positive/(negative) basis difference		167,975			144,557			(175,852	)

Positive/(negative) basis difference has been assigned to:
Goodwill (*)		23,899			23,899			—
Amortizable intangible assets (**)		192,101			160,877			(175,852	)
Deferred tax liabilities		(48,025	)		(40,219	)		—

		167,975			144,557			(175,852	)


Cumulative losses in equity interest in Tuniu		(1,546,645	)		(1,635,579	)		(2,036,702	)

(*)

In the second

and fourth

quarter of 2019, the Group conducted impairment assessment

on its investment in Tuniu considering the duration and severity of the decline of Tuniu’s stock price after the investment, and concluded the decline in fair value of the investment was other-than-temporary. Accordingly, the Group recorded impairment charge

of RMB222,212

and R

86,072 in the second and fourth

quarter

of 2019, respectively, to write down the carrying value of its investment in Tuniu to its fair value, based on quoted closing price

of Tuniu as of June 30, 2019 and December 31, 2019, respectively.

(**)	As of December 31, 2019, the negative basis difference between carrying value of investment in Tuniu and proportionate share of Tuniu’s net tangible and intangible assets was RMB175,852. This difference would not be amortized.

As of December 31, 2017, 2018

and 2019, the market value of the Group’s investment in Tuniu was approximately

RMB1,304,082,

RMB867,921 and RMB457,443 based on quoted closing price, respectively.

Investment in Jiangsu Five Star

In April 2019, the Group invested RMB1,274,257 with a combination of cash and assumption of the seller’s debt as consideration to acquire ordinary shares of Jiangsu Five Star, a leading offline retailer of home appliances and consumer electronics, from its existing shareholder (the “Seller”), in exchange for 46% of Jiangsu Five Star’s total

equity interest. The Group also provided a fifteen months interest-bearing loan of

RMB1,024,946 to the Seller and has the right

to purchase additional shares. Investment in Jiangsu Five Star is accounted for using the equity method as the Group obtained significant influence by the rights to nominate two board members out of five.

Investment in Jiangsu Five Star is accounted for using the equity method with the investment cost allocated as follows:


	As of April 29, 2019			As of December 31, 2019
	RMB			RMB
Carrying value of investment in Jiangsu Five Star		1,274,257			1,317,045
Proportionate share of Jiangsu Five Star’s net tangible and intangible assets		432,310			480,438

Positive basis difference		841,947			836,607

Positive basis difference has been assigned to:
Goodwill		586,325			586,325
Amortizable intangible assets (*)		208,840			206,069
Property (*)		131,990			127,641
Deferred tax liabilities		(85,208	)		(83,428	)

		841,947			836,607


Cumulative gains in equity interest in Jiangsu Five Star		—			42,788

(*)	As of December 31, 2019, the weighted average remaining lives of the intangible assets and property were 19 years and 24 years, respectively.

Investment in Yixin

In February 2015 and August 2016, the Group invested US$100,000 and US$30,000 in cash, respectively, to acquire Yixin’s newly issued preferred shares. Yixin, a controlled subsidiary of Bitauto, is a leading online automobile retail transaction platform in China. The investment in Yixin was accounted for under the cost method as the underlying shares the Group invested in were not considered

in-substance

common stock and had no readily determinable fair value.

On November 16, 2017, Yixin successfully completed the global offering and traded on the Main Board of

he Stock Exchange of Hong Kong Limited. After the offering, the Group held approximately 11% of Yixin’s issued and outstanding shares and the investment is accounted for using the equity method, as the preferred shares the Group previously invested in were automatically converted into ordinary shares upon listing and the Group obtained significant influence by the rights to nominate

one

non-executive

board member out of

nine

and the significant influence on its controlling shareholder, Bitauto.

Investment in Yixin is accounted for using the equity method with the investment cost allocated as follows:


	As of December 31, 2017			As of December 31, 2018			As of December 31, 2019
	RMB			RMB			RMB
Carrying value of investment in Yixin		860,992			1,044,537			1,206,741
Proportionate share of Yixin’s net tangible and intangible assets		1,703,448			1,641,276			1,663,071

Negative basis difference		(842,456	)		(596,739	)		(456,330	)


Cumulative gains in equity interest in Yixin		—			183,545			345,749

As of December 31, 2019, the negative basis difference between carrying value of investment in Yixin and proportionate share of Yixin’s net tangible and intangible assets was RMB456,330. This difference would not be amortized.

As of December 31, 2017,

2018 and 2019, the market value of the Group’s investment in Yixin was approximately

RMB3,586,393,

RMB1,049,246 and RMB1,060,433 based on quoted closing price, respectively.

The Group summarizes the condensed financial information of the Group’s equity investments

under e

quity me

thod

as a group below in accordance with Rule

4-08

of Regulation

S-X:


	For the year ended December 31,
	2017			2018			2019
	RMB			RMB			RMB
Operating data:
Revenue s		72,206,753			94,099,295			128,942,238
Gross profit		19,162,739			26,893,544			34,540,510
Loss from operations		(2,200,140	)		(1,471,960	)		(534,006	)
Net loss		(2,549,137	)		(1,722,715	)		(564,940	)
Net loss attributable to shareholder s		(2,977,210	)		(1,748,305	)		(1,235,224	)

	As of December 31,
	2017			2018			2019
	RMB			RMB			RMB
Balance sheet data:
Current assets		78,125,211			110,276,278			117,073,881
Non-current assets		62,806,104			78,546,934			97,456,584
Current liabilities		58,734,790			80,643,552			94,482,219
Non-current liabilities		16,703,429			22,755,496			18,910,340
Redeemable stock		5,877,854			9,897,962			10,593,025
Non-controlling interests		717,106			431,498			380,510

The Group recorded its interests in Yonghui, Bitauto, Dada, Tuniu, Jiangsu Five Star and Yixin one quarter in arrears to enable the Group to provide its financial disclosure independent of the reporting schedule of these equity investees.

The Group performs impairment assessment of its investments under the Measurement Alternative and equity method whenever events or changes in circumstances indicate that the carrying value of the investment may not be fully recoverable. Impairment charges in connection with the Measurement Alternative investments of RMB59,987, RMB593,138 and RMB1,612,139 were recorded in others, net in the consolidated statements of operations and comprehensive income/(loss) for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, the accumulated impairment of the Group’s Measurement Alternative investments was RMB

2,458,382. Impairment charges in connection with the equity method investments of nil, nil and RMB796,737 were recorded in share of results of equity investees in the consolidated statements of operations and comprehensive income/(loss) for the years ended December 31, 2017, 2018 and 2019, respectively.