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Investments | 12 Months Ended
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Dec. 31, 2023
Schedule of Investments [Abstract] |
Investments |
4. | INVESTMENTS
Short-term Investments As of December 31, 2022 and 2023, the Group’s short-term investments primarily comprised of deposits in commercial banks with maturities between three months and one year and wealth management products issued by commercial banks and other financial institutions. During the years ended December 31, 2021, 2022 and 2023, the Group recorded interest income from its short-term investments of RMB4.5 billion, RMB4.5 billion and RMB5.1 billion (US$721 million) in the consolidated statements of comprehensive income, respectively. Short-term investments classification as of December 31, 2022 and 2023 were shown as below:
|  | As of December 31, 2022 |
|  | Cost or Amortized cost less allowance for credit losses |  |  | Gross unrecognized holding gains |  |  | Gross unrecognized holding losses |  |  | Gross unrealized gains |  |  | Gross unrealized losses |  |  | Fair value |
| RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |
|  | (In millions) |
Held-to-maturity debt investments |  |  | 119,984 |  |  |  | 631 |  |  |  | (151 | ) |  |  | — |  |  |  | — |  |  |  | 120,464 |
Available-for-sale debt investments |  |  | 847 |  |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | — |  |  |  | 855 |
|  | As of December 31, 2023 |
|  | Cost or Amortized cost less allowance for credit losses |  |  | Gross unrecognized holding gains |  |  | Gross unrecognized holding losses |  |  | Gross unrealized gains |  |  | Gross unrealized losses |  |  | Fair value |
| RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Held-to-maturity debt investments |  |  | 166,999 |  |  |  | 835 |  |  |  | (94 | ) |  |  | — |  |  |  | — |  |  |  | 167,740 |  |  |  | 23,626 |
Available-for-sale debt investments |  |  | 1,642 |  |  |  | — |  |  |  | — |  |  |  | 29 |  |  |  | — |  |  |  | 1,671 |  |  |  | 235 |
Long-term Investments The following table sets forth a breakdown of the categories of long-term investments held by the Group as of the dates indicated:
|  | As of December 31, |
|  | 2022 |  |  | 2023 |  |  | 2023 |
|  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Equity investments at fair value with readily determinable fair value |  |  | 12,100 |  |  |  | 9,610 |  |  |  | 1,354 |
Equity investments without readily determinable fair value using the NAV practical expedient |  |  | 945 |  |  |  | 942 |  |  |  | 133 |
Equity investments without readily determinable fair value using the measurement alternative |  |  | 9,249 |  |  |  | 8,093 |  |  |  | 1,140 |
Available-for-sale debt investments |  |  | 2,447 |  |  |  | 3,682 |  |  |  | 519 |
Equity method investments |  |  | 25,940 |  |  |  | 20,789 |  |  |  | 2,927 |
Investments accounted for at fair value |  |  | 4,616 |  |  |  | 4,841 |  |  |  | 682 |
Total long-term investments |  |  | 55,297 |  |  |  | 47,957 |  |  |  | 6,755 |
Equity investments at fair value with readily determinable fair value Equity investments at fair value with readily determinable fair value represent investments in the equity securities of publicly listed companies, for which the Group does not have significant influence. Equity investments without readily determinable fair value The Group accounted for private equity funds of which the Group does not have the ability to exercise significant influence using the NAV practical expedient in accordance with ASC 820. For equity investments without readily determinable fair value and do not qualify for the NAV practical expedient, the Group elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any in accordance with ASC 321. Impairment charges recognized on equity investments without readily determinable fair value were RMB4,259 million, RMB2,456 million and RMB753 million (US$106 million) for the years ended December 31, 2021, 2022 and 2023, respectively. The total carrying value of equity investments without readily determinable fair value that do not qualify for the NAV practical expedient held as of December 31, 2022 and 2023 were as follows:
|  | As of December 31, 2022 |  |  | As of December 31, 2023 |  |  | As of December 31, 2023 |
|  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Initial cost basis |  |  | 13,741 |  |  |  | 13,586 |  |  |  | 1,914 |
Cumulative unrealized gains |  |  | 4,026 |  |  |  | 3,099 |  |  |  | 436 |
Cumulative unrealized losses (including impairment) |  |  | (8,518 | ) |  |  | (8,592 | ) |  |  | (1,210 | )
Total carrying value |  |  | 9,249 |  |  |  | 8,093 |  |  |  | 1,140 |
Total unrealized and realized gains and losses of equity securities without readily determinable fair values that do not qualify for the NAV practical expedient for the years ended December 31, 2021, 2022 and 2023 were as follows:
|  | For the years ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2023 |
|  | RMB |  |  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Gross unrealized gains |  |  | 1,062 |  |  |  | 218 |  |  |  | 571 |  |  |  | 80 |
Gross unrealized losses (including impairment) (i) |  |  | (4,424 | ) |  |  | (2,418 | ) |  |  | (744 | ) |  |  | (105 | )
Net unrealized losses on equity securities held |  |  | (3,362 | ) |  |  | (2,200 | ) |  |  | (173 | ) |  |  | (25 | )
Net realized gains on equity securities sold |  |  | — |  |  |  | 90 |  |  |  | 251 |  |  |  | 35 |
Total net (losses) gains recognized |  |  | (3,362 | ) |  |  | (2,110 | ) |  |  | 78 |  |  |  | 10 |
(i) | Gross unrealized losses (downward adjustments excluding impairment) were RMB165 million, nil and RMB8 million (US$1 million) for the years ended December 31, 2021, 2022 and 2023, respectively.
Equity method investments The carrying amount of the Group’s equity method investments were RMB25.9 billion and RMB20.8 billion (US$2.9 billion) as of December 31, 2022 and 2023, respectively. For the years ended December 31, 2021, 2022 and 2023, the impairment recognized for equity method investments were RMB 57 million, RMB569 million and RMB62 million (US$9 million), respectively. For the year ended December 31, 2023, the Group recognized share of losses from equity method investments of RMB 3.8 billion (US$535 million). One of the equity method investees modified certain terms of its preferred shares issued and the Group recognized RMB3.0 billion losses from this investee mainly as a result of the modification. Equity Investment in Trip.com International, Ltd. (“Trip”) (formally known as Ctrip) As of December 31, 2022, the Group held approximately 12% of Trip’s outstanding shares. The Group was considered to have significant influence over Trip and accounts for such investment as an equity method investment in accordance with ASC 323. During the year ended December 31, 2023, the Group disposed an aggregate of 10 million American Depositary Shares of Trip and recognized disposal gains in aggregate of RMB1.4 billion. After the partial disposal of the investment in Trip, the Group held approximately 9% equity interest in Trip, and the Group can actively participate in the operating and financing policies of Trip through its one seat on Trip’s board of directors with a total of eight members. Accordingly, the Group continues to have significant influence over Trip and accounts for its remaining investment as an equity method investment in accordance with ASC 323. As of December 31, 2023, the Group’s investments in Trip had a fair value of RMB15.1 billion (US$2.1 billion), based on the closing share price. Equity Investment in Jidu Auto Inc. (“Jidu”) In January 2021, the Group entered into an agreement with Zhejiang Geely Holding Group (“Geely”) to established Jidu to produce intelligent electric vehicles. In 2022, the Group purchased the ordinary shares with amount of US$371 million including common stock of US$171 million and in-substance common stock of US$200 million, and preferred shares with amount of US$193 million. In 2023, the Group purchased the Series C Warrant of Jidu with amount of RMB650 million giving rights to acquire 14,443,320 Series C Preferred Shares. After the exercise of such warrants, the Group will hold an equity interest of 51.14%. However, considering the substantive participating rights held by Geely, the Group accounts for its investment of the ordinary shares as an equity method investment in accordance with ASC 323. Furthermore, the Group accounts for its investment of the preferred shares and Series C Warrant as an equity investment without a readily determinable fair value in accordance with ASC 321. Equity Investment in Du Xiaoman After finishing a series of legal restructuring and recapitalization of the financial services business (“Du Xiaoman”), the Group retained 41% of Du Xiaoman’s shares on a fully diluted basis, and accounted for it as an equity method investment in accordance with ASC 323, as the Group retained significant influence over Du Xiaoman. As of December 31, 2022 and 2023, in addition to the aforementioned equity method investments, the Group held other equity method investments through its subsidiaries or VIEs and over which the Group had significant influence. For the year ended December 31, 2023, equity method investments held by the Group in aggregate have met the significance criteria as defined under Rule 4-08(g) of Regulation S-X. Financial information for the Group’s equity method investments are summarized as a group as follow:
|  | As of December 31, |
|  | 2022 |  |  | 2023 |  |  | 2023 |
|  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Current assets |  |  | 230,934 |  |  |  | 271,407 |  |  |  | 38,227 |
Non-current assets |  |  | 147,034 |  |  |  | 154,364 |  |  |  | 21,742 |
Current liabilities |  |  | 179,519 |  |  |  | 227,894 |  |  |  | 32,098 |
Non-current liabilities |  |  | 37,397 |  |  |  | 30,226 |  |  |  | 4,257 |
Noncontrolling interests |  |  | 2,434 |  |  |  | 2,461 |  |  |  | 347 |
|  | For the years ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2023 |
|  | RMB |  |  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Total revenues |  |  | 41,693 |  |  |  | 42,123 |  |  |  | 60,042 |  |  |  | 8,457 |
Gross profit |  |  | 23,540 |  |  |  | 23,925 |  |  |  | 40,304 |  |  |  | 5,677 |
Income from operations |  |  | 515 |  |  |  | 617 |  |  |  | 8,120 |  |  |  | 1,144 |
Net income (loss) |  |  | 3,263 |  |  |  | (1,292 | ) |  |  | 9,544 |  |  |  | 1,344 |
Net income (loss) attributable to the investees |  |  | 3,328 |  |  |  | (1,239 | ) |  |  | 9,493 |  |  |  | 1,337 |
Investments accounted for at fair value Long-term equity investments in unlisted companies held by consolidated investment companies are accounted for at fair value in accordance with ASC 946-320. These investments are carried at fair value with realized or unrealized gains and losses recorded in “Others, net” in the consolidated statements of comprehensive income. The methodology used in the determination of fair values for held-to-maturity debt investments, available-for-sale debt investments, equity investments with readily determinable fair values and other investment securities accounted for at fair value are disclosed in Note 26. Long-term investments classification, excluding equity method investments and equity investments without readily determinable fair value, as of December 31, 2022 and 2023 are shown as below:
|  | As of December 31, 2022 |
|  | Cost or Amortized cost |  |  | Gross unrealized gains |  |  | Gross unrealized losses |  |  | Fair value |
|  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |
|  | (In millions) |
Equity investments at fair value with readily determinable fair value |  |  | 15,835 |  |  |  | 2,731 |  |  |  | (6,466 | ) |  |  | 12,100 |
Available-for-sale debt investments |  |  | 3,735 |  |  |  | 283 |  |  |  | (1,571 | ) |  |  | 2,447 |
Investments accounted for at fair value |  |  | 2,331 |  |  |  | 2,855 |  |  |  | (570 | ) |  |  | 4,616 |
|  | As of December 31, 2023 |
|  | Cost or Amortized cost |  |  | Gross unrealized gains |  |  | Gross unrealized losses |  |  | Fair value |
|  | RMB |  |  | RMB |  |  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Equity investments at fair value with readily determinable fair value |  |  | 14,716 |  |  |  | 1,698 |  |  |  | (6,804 | ) |  |  | 9,610 |  |  |  | 1,354 |
Available-for-sale debt investments |  |  | 4,360 |  |  |  | 455 |  |  |  | (1,133 | ) |  |  | 3,682 |  |  |  | 519 |
Investments accounted for at fair value |  |  | 2,547 |  |  |  | 2,942 |  |  |  | (648 | ) |  |  | 4,841 |  |  |  | 682 |
Available-for-sale debt investments Majority of the available-for-sale debt investments are convertible debt instruments issued by private companies and investments in preferred shares that are redeemable at the Group’s option, which are measured at fair value. Investments in preferred shares that are redeemable at the Group’s option have no contractual maturity date. The following table summarizes the estimated fair value of available-for-sale debt investments, classified by the contractual maturity date of the investments:
|  | As of December 31, |
|  | 2022 |  |  | 2023 |  |  | 2023 |
|  | RMB |  |  | RMB |  |  | US$ |
|  | (In millions) |
Due in 1 year through 5 years |  |  | 1,581 |  |  |  | 2,154 |  |  |  | 303 |
Not due at a single maturity date |  |  | 866 |  |  |  | 1,528 |  |  |  | 216 |
Total |  |  | 2,447 |  |  |  | 3,682 |  |  |  | 519 |

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