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Share-based Payments | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Share-based Payments |
16. | SHARE-BASED PAYMENTS
The Company has three share-based compensation plans under which awards may be granted to employees, namely, the Share Option Scheme , the 2013 Share Award Scheme and the 2021 Share Award Scheme. The maximum aggregate number of ordinary shares that are authorized to be issued under the Share Option Scheme, 2013 Share Award Scheme and 2021 Share Award Scheme is 209,750,000, 215,376,304 and 209,216,310, respectively. These plans have a contractual term of ten years. The share-based awards are accounted for as equity awards and generally vest over a period from two to five years. Share Option Scheme A summary of the activity under the Share Option Scheme is stated below:
|  | Number of options |  |  | Weighted- average exercise price |  |  | Weighted- average grant-date fair value |  |  | Weighted- average remaining contractual term |  |  | Aggregate intrinsic value |
|  |  |  |  | US$ |  |  | US$ |  |  | Years |  |  | US$ |
Outstanding, December 31, 2020 |  |  | 86,759,375 |  |  |  | 0.07 |  |  |  | 0.54 |  |  |  | 7.12 |  |  |  | 2.83 |
Granted |  |  | 12,292,710 |  |  |  | 0.07 |  |  |  | 2.80 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (7,384,942 | ) |  |  | 0.07 |  |  |  | 1.38 |  |  |  |  |  |  |  |  |
Exercised |  |  | (29,906,941 | ) |  |  | 0.07 |  |  |  | 0.71 |  |  |  |  |  |  |  |  |
Outstanding, December 31, 2021 |  |  | 61,760,202 |  |  |  | 0.07 |  |  |  | 0.87 |  |  |  | 6.61 |  |  |  | 0.98 |
Vested and expected to vest at December 31, 2021 |  |  | 61,760,202 |  |  |  | 0.07 |  |  |  | 0.87 |  |  |  | 6.61 |  |  |  | 0.98 |
Exercisable at December 31, 2021 |  |  | 28,437,976 |  |  |  | 0.07 |  |  |  | 0.46 |  |  |  | 5.22 |  |  |  | 0.98 |
The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s ordinary share as of December 31, 2021 and the option’s respective exercise price. Total intrinsic value of options exercised for the years ended December 31, 2019, 2020 and 2021 were RMB308,665, RMB906,120 and RMB79,224 (US$12,432), respectively. The total weighted average grant-date fair value of the share-based awards granted during the years ended December 31, 2019, 2020 and 2021 were US$0.65, US$1.16 and US$2.80 per option, respectively. The aggregate fair value of the share-based awards vested during the years ended December 31, 2019, 2020 and 2021 were RMB36,060, RMB44,135 and RMB51,892 (US$8,143), respectively. As of December 31, 2021, there was RMB119,582 (US$18,765) of total unrecognized employee share-based compensation expenses, related to unvested share-based awards, which are expected to be recognized over a weighted-average period of 1.41 years. Total unrecognized compensation cost may be adjusted for actual forfeitures occurring in the future. 2013 Share Award Scheme A summary of the activity for the restricted shares issued under the Share Award Scheme is stated below:
|  | Number of shares |  |  | Weighted-average grant date fair value |
|  |  |  |  | US$ |
Outstanding, December 31, 2020 |  |  | 53,602,560 |  |  |  | 0.76 |
Granted |  |  | 29,076,828 |  |  |  | 2.04 |
Vested |  |  | (19,020,640 | ) |  |  | 0.71 |
Forfeited |  |  | (5,671,482 | ) |  |  | 1.61 |
Outstanding, December 31, 2021 |  |  | 57,987,266 |  |  |  | 1.32 |
Expected to vest at December 31, 2021 |  |  | 57,987,266 |  |  |  | 1.32 |
The total weighted average grant-date fair value of the share-based awards granted during the years ended December 31, 2019, 2020 and 2021 were US$0.74, US$0.78 and US$2.04 per share, respectively. The aggregate fair value of the share-based awards vested during the years ended December 31, 2019, 2020 and 2021 were RMB19,580, RMB91,683 and RMB90,121 (US$14,142 ) , respectively. As of December 31, 2021, there was RMB315,641 (US$49,531) of total unrecognized share-based compensation expenses related to unvested share-based awards which are expected to be recognized over a weighted-average period of 1.86 years. The fair value of the restricted shares is the fair value of the Company’s ordinary shares at their respective grant dates, which was determined with the assistance of an independent third party valuer prior to the completion of the IPO and based on the price of the Company’s publicly traded shares after completion of the IPO. Total unrecognized compensation cost may be adjusted for actual forfeitures occurring in the future. A summary of the activity for the options issued under the Share Award Scheme is stated below:
|  | Number of options |  |  | Weighted- average exercise price |  |  | Weighted- average grant- date fair value |  |  | Weighted- average remaining contractual term |  |  | Aggregate intrinsic value |
|  |  |  |  | US$ |  |  | US$ |  |  | Years |  |  | US$ |
Outstanding, December 31, 2020 |  |  | 37,191,840 |  |  |  | 0.82 |  |  |  | 0.31 |  |  |  | 9.00 |  |  |  | 2.09 |
Exercised |  |  | (8,081,820 | ) |  |  | 0.64 |  |  |  | 0.33 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (1,241,600 | ) |  |  | 0.87 |  |  |  | 0.30 |  |  |  |  |  |  |  |  |
Outstanding, December 31, 2021 |  |  | 27,868,420 |  |  |  | 0.83 |  |  |  | 0.31 |  |  |  | 7.99 |  |  |  | 0.22 |
Vested and expected to vest at December 31, 2021 |  |  | 27,868,420 |  |  |  | 0.83 |  |  |  | 0.31 |  |  |  | 7.99 |  |  |  | 0.22 |
Exercisable at December 31, 2021 |  |  | 12,566,340 |  |  |  | 0.80 |  |  |  | 0.30 |  |  |  | 8.00 |  |  |  | 0.25 |
The aggregate intrinsic value in the table above represents the difference between the fair value of the Company’s ordinary share as of December 31, 2021 and the option’s respective exercise price. No option was exercised during the year ended December 3 1, 2019. Total intrinsic value of options exercised for the year s ended December 31, 2020 and 2021 were RMB3,230 and RMB1,561 (US $ 245), respectively. The total weighted average grant-date fair value of the share-based awards granted during the years ended December 31, 2019, 2020 and 2021 were US$0.30, US$0.31 and US$0.31 per option, respectively. The aggregate fair value of the share-based awards vested during the years ended December 31, 2019, 2020 and 2021 were RMB nil, RMB15,981 and RMB16,192 (US$2,541), respectively. As of December 31, 2021, there was RMB12,898 (US$2,024) of total unrecognized employee share-based compensation expenses, related to unvested share-based awards, which are expected to be recognized over a weighted-average period of 1.16 years. Total unrecognized compensation cost may be adjusted for actual forfeitures occurring in the future. 2021 Share Award Scheme In November 2021, the Company adopted the 2021 Share Award Scheme. As of December 31, 2021, there was no award granted under the 2021 Share Award Scheme. Others In connection with the acquisition of Shenzhen Yunfan, the Company granted 11,684,432 restricted shares to certain employees that contain 1-3 years service vesting condition. As of December 31, 2021 , 2,278,360 of restricted shares were vested, and there was RMB101,871 (US$15,986) of total unrecognized share-based compensation expenses related to these unvested share-based awards that will be recognized over approximately 2 years. Fair value of share options The fair value of share options was determined using the binomial tree model, with the assistance from an independent third-party valuation firm. The binomial model requires the input of highly subjective assumptions, including the expected share price volatility and the exercise multiple. For expected volatility, the Company has made reference to historical volatility of several comparable companies. The exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested options. As the Company did not have sufficient information of past employee exercise history, it has considered the statistics on exercise patterns of employees compiled by Huddart and Lang in Huddart, S., and M. Lang. 1996. “Employee Stock Option Exercises: An Empirical Analysis.” Journal of Accounting and Economics, vol. 21, no. 1 (February):5-43, which are widely adopted by valuers as authoritative guidance on expected exercise multiples. For the employee exit rate, which represents the annual turnover rate of employees leaving services, the Group uses the historical employee exiting data to have an estimate of that input. The risk-free rate for the period within the contractual life of the options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. Prior to the completion of the IPO, the estimated fair values of the ordinary shares, at the option grant dates, was determined with the assistance from an independent third-party valuation firm. The Company’s management is ultimately responsible for the determination of the estimated fair value of its ordinary shares. Subsequent to the completion of the IPO, fair value of the ordinary shares is the price of the Company’s publicly traded shares. The estimated fair values of the ordinary shares, at the share award grant dates, was determined with the assistance from an independent third-party valuation firm. The assumptions used to estimate the fair value of the share options granted are as follows:
|  | For the year ended December 31
|  | 2019 |  | 2020 |  | 2021
Risk-free rate |  | 1.58%-1.80% |  | 0.66%-1.84% |  | 1.13%-1.62%
Expected volatility range |  | 37.40%-37.90% |  | 37.3%-37.8% |  | 36.28%-38.03%
Exercise multiple |  | 2.20-2.80 |  | 2.20-2.80 |  | 2.20-2.80
Fair market value per ordinary share as at valuation dates |  | US$0.72-US$0.76 |  | US$0.76-US$1.94 |  | US$1.97-US$3.49
Share-based awards of Camelot Camelot subsidiary also has an equity incentive plan granting share-based awards that contain 3 year service vesting condition (the “Camelot Award”). The portion the acquisition-date fair-value-based measure of the Camelot Award that was attributable to precombination service was recognized as non-controlling interest and the portion relating to any remaining postcombination service was recognized as share based compensation expenses in the Group’s consolidated financial statements. As of December 31, 2021 , there was RMB 95,165 (US$ 14,933 ) of total unreco gni zed share-based compensation expenses related to these unvested share-based awards that will be recognized over approximately 1.67 year s . The acquisition date fair value of each Camelot award is estimated on the date of modification using the binomial tree option pricing model with the following assumptions:
|  | 2021 |
Risk-free rate |  |  | 0.21 | %
Expected volatility range |  |  | 50.56 | %
Exercise multiple |  |  | 2.20 |
Fair market value per Camelot’s ordinary share |  |  | RMB23.00 |
The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items:
|  | For the year ended December 31 |
|  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2021 |
|  | RMB |  |  | RMB |  |  | RMB |  |  | US$ |
Cost of revenues |  |  | 8,509 |  |  |  | 10,614 |  |  |  | 17,481 |  |  |  | 2,743 |
Selling and marketing expenses |  |  | 37,808 |  |  |  | 62,270 |  |  |  | 72,594 |  |  |  | 11,392 |
General and administrative expenses |  |  | 31,988 |  |  |  | 169,101 |  |  |  | 193,886 |  |  |  | 30,425 |
Research and development expenses |  |  | 42,974 |  |  |  | 88,129 |  |  |  | 150,389 |  |  |  | 23,599 |
|  |  | 121,279 |  |  |  | 330,114 |  |  |  | 434,350 |  |  |  | 68,159 |

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