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Discontinued operations

12 Months Ended

Dec. 31, 2020

Discontinued operations

Discontinued operations

4.            Discontinued operations

In December 2017, the Company signed a contract (“Disposal Agreement”) to divest its web game business, a major line of the Group’s online game business, to Shenzhen Xunyi Network Technology Corp., Ltd. (“Shenzhen Xunyi”), a company operated by a few former core members of Xunlei’s web game business at a consideration of RMB 4,180,000 (equivalent to approximately USD 640,000). The disposal was due to a shift of strategy to allow the Group better manages its internal resources, including internal traffic referral and corporate allocation. The disposal was completed in January 2018 and a gain of USD 1.4 million was recognized.

As part of the disposal and according to the Disposal Agreement, Xunlei agreed to assist the Buyer to collect and pay certain receivables and payables of the web game business for a period of no longer than one year after the completion of disposal. In addition, the Buyer agreed to enter into business cooperation services with Xunlei, including purchase of advertising services in the next 24 months, after signing the Disposal Agreement, under a separate negotiated term. Relevant business cooperation agreements have been signed in January 2018 at market term.

Results of the discontinued operation

​	​	​
​	​	Year ended
USD (In thousands)		December 31, 2018
Revenues, net of rebates and discounts		656
Business taxes and surcharges		(1)
Net revenues		655
Cost of revenues		(16)
Gross profit		639
Operating expenses		​
Research and development expenses		(419)
Sales and marketing expenses		(63)
General and administrative expenses		(18)
Total operating expenses		(500)
Operating income		139
Gain on disposal of web game		1,394
Income tax expenses		(230)
Income from discontinued operations		1,303

​

Cash flows generated from the discontinued operation

​	​	​
​	​	Year ended
USD (In thousands)		December 31, 2018
Net cash generated from operating activities		1,065
Net cash flow for the year		1,065

​

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- References

No definition available.

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- Definition

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-URI http://asc.fasb.org/topic&trid=2155823

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=2122178

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