XD : Publication of the Offering Circular dated 31 March 2021 by XD Inc. in relation to the US$280,000,000 1.25% Convertible Bonds due 2026

April 13, 2021 at 12:53 am EDT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to acquire, purchase or subscribe for securities.

This announcement and the listing document referred to herein have been published for information purposes only as required by the Listing Rules and do not constitute an offer to sell nor a solicitation of an offer to buy any securities. Neither this announcement nor anything referred to herein (including the listing document) forms the basis for any contract or commitment whatsoever. For the avoidance of doubt, the publication of this announcement and the listing document referred to herein shall not be deemed to be an offer of securities made pursuant to a prospectus issued by or on behalf of the issuer for the purposes of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong nor shall it constitute an advertisement, invitation or document containing an invitation to the public to enter into or offer to enter into an agreement to acquire, dispose of, subscribe for or underwrite securities for the purposes of the Securities and Futures Ordinance (Cap. 571) of Hong Kong.

Nothing in this announcement constitutes an offer of securities for sale in the United States or any other jurisdiction where it is unlawful to do so. The securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act''), or the securities laws of any other place. Accordingly, the securities may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The securities may be offered and sold only in offshore transactions in reliance on Regulation S under the Securities Act ("Regulation S"), and in each case, in accordance with any other applicable law. This announcement is not for distribution, directly or indirectly, in or into the United States. There will be no public offering of securities in the United States.

Notice to Hong Kong investors: The Issuer (as defined below) confirms that with respect to the Hong Kong market, the Bonds (as defined below) are intended for purchase by professional investors only (as defined in Chapter 37 of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange) and have been listed on the Hong Kong Stock Exchange on that basis. Accordingly, the Issuer confirms that the Bonds are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved.

XD Inc.

心动有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2400)

(the "Issuer")

US$280,000,000 1.25% Convertible Bonds due 2026

(Stock Code: 40646)

This announcement is issued pursuant to Rule 37.39A of the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange").

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Please refer to the offering circular dated 31 March 2021 (the "Offering Circular") appended hereto in relation to the US$280,000,000 in aggregate principal amount of 1.25% Convertible Bonds due 2026 (the "Bonds"). As disclosed in the Offering Circular, the Bonds were intended for purchase by professional investors only (as defined in Chapter 37 of the Listing Rules) and have been listed on the Hong Kong Stock Exchange on that basis.

The Offering Circular does not constitute a prospectus, notice, circular, brochure or advertisement offering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for or purchase any securities, nor is it circulated to invite offers by the public to subscribe for or purchase any securities.

By Order of the Board

XD Inc.

HUANG Yimeng

Chairman and Chief Executive Officer

Hong Kong, 13 April 2021

As at the date of this announcement, the Board of the Issuer comprises Mr. HUANG Yimeng, Mr. DAI Yunjie, Mr. SHEN Sheng, and Mr. FAN Shuyang as executive Directors, Mr. TONG Weiliang, and Mr. LIU Wei as non-executive Directors and Mr. PEI Dapeng, Mr. XIN Quandong and Ms. LIU Qianli as independent non- executive Directors.

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IMPORTANT NOTICE

NOT FOR DISTRIBUTION TO ANY PERSON OR ADDRESS IN THE UNITED STATES

IMPORTANT: You must read the following before continuing. The following applies to the offering circular following this page (the "Offering Circular") and you are therefore advised to read this carefully before reading, accessing or making any other use of the Offering Circular. In accessing the Offering Circular, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from the Issuer (as defined in the Offering Circular) as a result of such access.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO AND ACCESS HAS BEEN LIMITED SO THAT IT SHALL NOT CONSTITUTE A GENERAL ADVERTISEMENT OR GENERAL SOLICITATION (AS THOSE TERMS ARE USED IN REGULATION D UNDER THE SECURITIES ACT) OR DIRECTED SELLING EFFORTS (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT) IN THE UNITED STATES OR ELSEWHERE. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE U.S. OR OTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE U.S. (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS.

THE FOLLOWING OFFERING CIRCULAR MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER, AND IN PARTICULAR, MAY NOT BE FORWARDED TO ANY U.S. ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.

Confirmation of your Representation: In order to be eligible to view this Offering Circular or make an investment decision with respect to the securities, investors must be outside of the U.S. (within the meaning of Regulation S under the Securities Act). This Offering Circular is being sent at your request and by accepting the e-mail and accessing this Offering Circular, you shall be deemed to have represented to the Joint Managers and the Issuer that (1) you are outside of the U.S., the electronic mail address that you gave the Issuer and to which this e-mail has been delivered is not located in the U.S. (2) you consent to delivery of such Offering Circular by electronic transmission, (3) you (and any nominee and any person on whose behalf you are subscribing for the securities to which the attached offering circular relates) are not a "connected person" (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")) of the issuer, which includes but is not limited to any director, chief executive or substantial shareholder of the issuer or any of its respective subsidiaries or any associate of any of them within the meaning of the Listing Rules, and (4) you (and any nominee and any person on whose behalf you are subscribing for the securities to which the attached offering circular relates) are, and will immediately after completion of the offering of such securities be, independent of and not acting in concert with, any of such connected persons in relation to the control of the issuer.

You are reminded that this Offering Circular has been delivered to you on the basis that you are a person into whose possession this Offering Circular may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, nor are you authorized to, deliver this Offering Circular to any other person.

The materials relating to the offering do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that the offering be made by a licensed broker or dealer and the underwriter or any affiliate of the underwriter is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by the underwriter or such affiliate on behalf of the Issuer in such jurisdiction.

This Offering Circular has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither Credit Suisse (Hong Kong) Limited and CLSA Limited (the "Joint Managers" or "Joint Bookrunners") nor XD Inc. (the "Issuer" or the "Company") (in this Offering Circular, all references to "Group", "the Group" and "the Company" refer to the Issuer and, as the context requires, its subsidiaries and its Consolidated Affiliated Entities (as defined below)) nor any person who controls the Joint Managers, the Issuer, nor any director, officer, employee or agent of the Joint Managers, the Issuer or affiliate of any such person accepts any liability or responsibility whatsoever in respect of any difference between the Offering Circular distributed to you in electronic format and the hard copy version available to you on request from the Joint Managers.

Actions that You May Not Take: If you receive this document by e-mail, you should not reply by e-mail to this announcement, and you may not purchase any securities by doing so. Any reply e-mail communications, including those you generate by using the "Reply" function on your e-mail software, will be ignored or rejected.

You are responsible for protecting against viruses and other destructive items. If you receive this document by e-mail,your use of this e-mailis at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature.

XD Inc.

心动有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2400)

US$280,000,000 1.25% Convertible Bonds due 2026

Issue Price: 100%

The 1.25 per cent. convertible bonds due 2026 in the aggregate principal amount of US$280,000,000 (the "Bonds") will be issued by XD Inc. (the "Issuer" or the "Company"). The issue price will be 100 per cent. of the aggregate principal amount of the Bonds.

The Bonds will constitute direct, unsubordinated, unconditional and (subject to Condition 4(A) (Negative Pledge) of the Terms and Conditions of the Bonds (the "Terms and Conditions" or the "Conditions")) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to the Conditions, at all times rank at least equally with all of its other present and future senior, unsecured and unsubordinated obligations.

Each Bond will, at the option of the holder, be convertible (unless previously redeemed, converted or purchased and cancelled) on or after 23 May 2021 up to the close of business (at the place where the certificate evidencing such Bond is deposited for conversion) on the seventh day prior to 12 April 2026 (the "Maturity Date") (both days inclusive) into fully paid ordinary shares with a nominal value of US$0.0001 each of the Company (the "Shares") at an initial conversion price of HK$63.45 per Share. The conversion price is subject to adjustment in the circumstances described under "Terms and Conditions of the Bonds - Conversion".

The Bonds will bear interest on their outstanding principal amount from and including the Issue Date at the rate of 1.25 per cent. per annum (the "Interest Rate"), payable semi-annually in arrear in equal instalments of US$6.25 per Calculation Amount (as defined in the Terms and Conditions) on 12 April and 12 October in each year.

Unless previously redeemed, converted or purchased and cancelled as provided in the Terms and Conditions, the Issuer will redeem each Bond at its principal amount, together with accrued and unpaid interest thereon, on the Maturity Date. The Bonds may be redeemed, at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days' notice to the Bondholders in accordance with the Terms and Conditions and in writing to the Trustee and the Principal Agent (which notice shall be irrevocable), on the Tax Redemption Date (as defined in the Terms and Conditions), at their principal amount together with interest accrued but unpaid up to but excluding the date of redemption in the event of any change in, or amendment to, the laws or regulations of the PRC, Cayman Islands or Hong Kong or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 31 March 2021, subject to the non-redemption option of each holder after the exercise by the Issuer of its tax redemption option as described in the Terms and Conditions. The Bonds may be redeemed, at the option of the Issuer in whole, but not in part, at any time (i) after 26 April 2024 but prior to the Maturity Date, provided that the Closing Price (as defined in the Terms and Conditions) of the Shares of the Company, translated into U.S. dollars at the Prevailing Rate (as defined in the Terms and Conditions) applicable to the relevant Trading Day (as defined in the Terms and Conditions), for 20 out of 30 consecutive Trading Days (as defined in the Terms and Conditions) prior to the date upon which notice of such redemption is published was at least 130 per cent. of the Conversion Price then in effect (translated into U.S. dollars at the Fixed Exchange Rate (as defined in the Terms and Conditions)) or (ii) if prior to the date the relevant Optional Redemption Notice (as defined in the Terms and Conditions) is given, Conversion Rights (as defined in the Terms and Conditions) shall have been exercised and/or purchased (and corresponding cancelations) and/or redemptions effected in respect of 90 per cent. or more in principal amount of the Bonds originally issued, the Bonds at their principal amount together with accrued but unpaid interest to but excluding the Optional Redemption Date (as defined in the Terms and Conditions). The holder of each Bond will also have the right, at such holder's option, to require the Issuer to redeem all or some only of such holder's Bonds, on the Relevant Event Redemption Date (as defined in the Terms and Conditions), at their principal amount together with interest accrued up to but excluding the date of redemption, following the occurrence of a Relevant Event (as defined in the Terms and Conditions). The holder of each Bond shall have the right to require the Issuer redeem all or some only of such holder's Bonds on 12 April 2024 at its the principal amount. See "Terms and Conditions of the Bonds - Redemption, Purchase and Cancellation".

PRIIPs REGULATION/PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the "EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); and/or (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Bonds or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Bonds or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.

PROHIBITION OF SALES TO UK RETAIL INVESTORS - The Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (the "UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "EUWA"); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the Bonds or otherwise making them available to retail investors in the UK has been prepared and, therefore, offering or selling the Bonds or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

Application will be made to the Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") for (i) the listing of, and permission to deal in, the Bonds on the Hong Kong Stock Exchange by way of debt issues to professional investors (as defined in Chapter 37 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the "Listing Rules")) (the "Professional Investors") only; and (ii) the listing of, and permission to deal in, the Shares issuable on conversion of the Bonds, and such permissions are expected to become effective on 13 April 2021 and when such Shares are issued, respectively. This Offering Circular is for distribution to Professional Investors only.

Notice to Hong Kong investors: The Company confirms that the Bonds are intended for purchase by Professional Investors only and will be listed on the Hong Kong Stock Exchange on that basis. Accordingly, the Company confirms that the Bonds are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved.

The Hong Kong Stock Exchange has not reviewed the contents of this Offering Circular, other than to ensure that the prescribed form disclaimer and responsibility statements, and a statement limiting distribution of this Offering Circular to Professional Investors only have been reproduced in this Offering Circular. Listing of the Bonds on the Hong Kong Stock Exchange in not to be taken as an indication of the commercial merits or credit quality of the Bonds or the Issuer, or quality of disclosure in this Offering Circular. Hong Kong Exchanges and Clearing Limited and the Hong Kong Stock Exchange take no responsibility for the contents of this Offering Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Offering Circular.

This Offering Circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Issuer. The Issuer accepts full responsibility for the accuracy of the information contained in this Offering Circular and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

Investors should be aware that the Bonds are unsecured, there are risks attached to the exercise of Conversion Rights of the Bonds, and there are various other risks relating to the Bonds and the Issuer and the Group, their business and their jurisdictions of operations which investors should familiarise themselves with before making an investment in the Bonds.

Investing in the Bonds and the Shares involves certain risks. See "Risk Factors" beginning on page 19 for a discussion of certain factors to be considered in connection with an investment in the Bonds and the Shares.

The Bonds and the Shares to be issued upon conversion of the Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and, or other securities laws and, subject to certain exceptions, may not be offered or sold within the United States. The Bonds are being offered and sold only outside the United States in reliance on Regulation S under the Securities Act ("Regulation S"). For a description of these and certain further restrictions on offers and sales of the Bonds and the Shares to be issued upon conversion of the Bonds and the distribution of this Offering Circular, see "Transfer Restrictions".

The Bonds will be represented by beneficial interests in a global certificate (the "Global Certificate") in registered form, which will be registered in the name of a nominee of, and shall be deposited on or about 12 April 2021 (the "Issue Date" or "Closing Date") with, a common depositary for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking S.A.("Clearstream"). Beneficial interests in the Global Certificate will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream. Except as described in the Global Certificate, certificates for Bonds will not be issued in exchange for interests in the Global Certificate.

The Bonds are not intended to be initially placed and may not be initially placed to "connected persons" of the Issuer as defined in the Listing Rules ("Connected Persons"). Each holder of the Bonds (and the beneficial owners of the Bonds, if applicable) will be deemed to have represented to the Issuer and Credit Suisse (Hong Kong) Limited and CLSA Limited (the "Joint Managers") that it is not a Connected Person of the Issuer, and will not after completion of the subscription of the Bonds be a Connected Person of the Issuer. Each prospective investor will be deemed to have agreed with the Issuer and the Joint Managers that it may, to the extent required by the Listing Rules and/or the Hong Kong Stock Exchange and/or the Hong Kong Securities and Futures Commission (the "SFC"), disclose information about such potential investor (including but not limited to its name, company registration number and the number of Bonds allotted to it) to certain parties.

Joint Bookrunners and Joint Managers

Offering Circular dated 31 March 2021

TABLE OF CONTENTS
	Page
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
TERMS AND CONDITIONS OF THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	78
SUMMARY OF PROVISIONS RELATING TO THE BONDS IN GLOBAL FORM . .	125
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	128
CAPITALIZATION AND INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	129
TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	130
DESCRIPTION OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	132
DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	174
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	179
EXCHANGE RATE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	185
MARKET PRICE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	188
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	189
DESCRIPTION OF THE SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	192
DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	200
SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	201
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	209

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IMPORTANT INFORMATION

This Offering Circular is strictly confidential. The Offering Circular is being furnished in connection with an offering exempt from the registration requirements of the Securities Act, solely for the purpose of enabling a prospective investor to consider the purchase of the Bonds as described herein. You are reminded that the information in this Offering Circular is not complete and may be changed. This Offering Circular is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the Bonds. You may not copy, reproduce or distribute this Offering Circular, in whole or in part, and may not disclose any content or use any information in this Offering Circular for any purpose other than considering an investment in the Bonds. By accepting delivery of this Offering Circular, you agree to the foregoing.

The contents of this Offering Circular have not been reviewed by any regulatory authority in Hong Kong or elsewhere. Investors are advised to exercise caution in relation to the offering of the Bonds described herein. If investors are in any doubt about any of the contents of this Offering Circular, they should obtain independent professional advice.

This Offering Circular includes particulars given in compliance with the Rules Governing the Listing of Securities on the Stock Exchange (as amended, supplemented or otherwise modified from time to time) for the purpose of giving information with regard to the Issuer. The Issuer accepts full responsibility for the accuracy of the information contained in this Offering Circular and confirm, having made all reasonable enquiries, that to the best of its knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

You should rely only on the information contained in this Offering Circular. The Issuer has not, and the Joint Managers have not, authorized any other person to provide you with any other information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in this Offering Circular is accurate only as of the date on the front cover of this Offering Circular or otherwise as of the date specifically referred to in connection with the particular information. The Issuer's business, financial condition, results of operations and prospects may have changed since that date. Neither the delivery of this Offering Circular nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the Issuer's affairs since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

The Issuer, having made all reasonable inquiries, confirm that this Offering Circular contains all information with respect to the Issuer, the Group and the Bonds, which are convertible into the Shares, which is material in the context of the issue and offering of the Bonds, that the information contained in this Offering Circular is true and accurate in all material respects and is not misleading in any material respect, that the opinions and intentions expressed in this Offering Circular are honestly held and have been reached after considering all relevant circumstances and are based on reasonable assumptions. The Issuer accepts responsibility accordingly. Statements

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contained in this Offering Circular as to the contents of any agreement or other document referred to in this Offering Circular may not set forth all of the terms and conditions of such agreements or other documents, and such statements are qualified by reference to the full text of each such agreement or other document. The Issuer has compiled all industry and market information and statistics contained in this Offering Circular from various published and private sources, which may be inconsistent with other information compiled elsewhere. Neither the Issuer nor the Joint Managers, have independently verified the accuracy of any of such information and the Issuer accepts responsibility only for accurately extracting information from such sources.

This Offering Circular has been prepared by the Issuer solely for use in connection with the proposed offering of the Bonds described in this Offering Circular. The distribution of this Offering Circular and the offering of the Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer, the Joint Managers, the Trustee and the Agents (each as defined in the "Terms and Conditions of the Bonds") to inform themselves about and to observe any such restrictions. No action is being taken to permit a public offering of the Bonds or the Shares deliverable upon conversion of the Bonds or the distribution of this Offering Circular in any jurisdiction where action would be required for such purposes.

The Bonds are offered in reliance upon certain exemptions from the registration requirements under the U.S. Securities Act for an offer and sale of securities that does not involve a public offering in the United States. This Offering Circular is personal to you and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the Bonds. In making a purchase of the Bonds, you will be deemed to have made the acknowledgments, representations and agreements provided in the section of this Offering Circular entitled "Transfer Restrictions."

No person has been or is authorized to give any information or to make any representation concerning the Issuer, the Group, the Bonds or the Shares other than as contained herein and, if given or made, any such other information or representation should not be relied upon as having been authorized by the Issuer, the Joint Managers, the Trustee or the Agents. Neither the delivery of this Offering Circular nor any offering, sale or delivery made in connection with the issue of the Bonds shall, under any circumstances, constitute a representation that there has been no change or development reasonably likely to involve a change in the Issuer's affairs, the affairs of the Group or any of them since the date hereof or create any implication that the information contained herein is correct as of any date subsequent to the date hereof. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Joint Managers, the Trustee or the Agents to subscribe for or purchase any of the Bonds and may not be used for the purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such offer or solicitation is not authorized or is unlawful. This Offering Circular is not intended to invite offers to subscribe for or purchase Shares.

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Singapore SFA Product Classification - In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the "SFA") and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the "CMP Regulations 2018"), the Issuer has determined, and hereby notify all relevant persons (as defined in Section 309A(1) of the SFA), that the Bonds are "prescribed capital markets products" (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

In making an investment decision regarding the Bonds, you must rely on your own examination of the Company and the terms of this offering, including the merits and risks involved. The contents of this Offering Circular are not to be considered as legal, business, financial or tax advice. You should consult your own counsel, accountants and other advisers as to legal, tax, business, financial and related aspects of a purchase of the Bonds. No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted,

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by the Joint Managers, Trustee or the Agents or any of their respective affiliates, as to the accuracy or completeness of the information contained in this Offering Circular or any other information supplied in connection with the Issuer, the Group, the issue and offering of the Bonds or the Shares. None of the Joint Managers, the Trustee or the Agents has independently verified any of the information contained in this Offering Circular and none of them can give any assurance that this information is accurate, truthful or complete. This Offering Circular is not intended to provide the basis of any credit or other evaluation nor should it be considered as a recommendation by the Issuer, the Group, the Joint Managers, the Trustee or the Agents that any recipient of this Offering Circular should purchase the Bonds. Each person receiving this Offering Circular acknowledges that such person has not relied on any of the Joint Managers, the Trustee or the Agents or any person affiliated with any of the Joint Managers, the Trustee or the Agents in connection with its investigation of the accuracy of such information or its investment decision. To the fullest extent permitted by law, none of the Joint Managers, the Trustee or the Agents accept any responsibility for the contents of this Offering Circular or for any other statement, made or purported to be made by the Joint Managers, the Trustee, the Agents or the Registrar or on their behalf in connection with the Issuer, the Group, the issue and offering of the Bonds or the Shares. The Joint Managers, the Trustee or the Agents accordingly disclaim all and any liability whether arising in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this Offering Circular or any such statement.

None of the Joint Managers, the Trustee or the Agents undertakes to review the financial condition or affairs of the Issuer or the Group after the date of this Offering Circular nor to advise any investor or potential investor in the Bonds of any information coming to the attention of any of the Joint Managers, the Trustee or the Agents. Except as otherwise indicated in this Offering Circular, all non-company specific statistics and data relating to the industry or to the economic development of China have been extracted or derived from publicly available information and industry publications. Such information has not been independently verified by the Issuer, the Trustee, the Agents or the Joint Managers or by their respective directors and advisers, and none of the Issuer, the Group, the Trustee, the Agents, the Joint Managers or their respective directors and advisers make any representation as to the correctness, accuracy or completeness of that information. In addition, third-party information providers may have obtained information from market participants and such information may have not been independently verified.

Each person receiving this Offering Circular acknowledges that: (i) such person has been afforded an opportunity to request from the Issuer and to review, and has received, all additional information considered by it to be necessary to verify the accuracy of, or to supplement, the information contained herein; (ii) such person has not relied on the Joint Managers, the Trustee or the Agents or any person affiliated with any of them in connection with any investigation of the accuracy of such information or its investment decision; (iii) no person has been authorized to give any information or to make any representation concerning the Group, the Bonds or the Shares (other than as contained herein and information given by the Issuer's duly authorized officers and employees in connection with investors' examination of the Group and the terms of the offering of the Bonds) and, if given or made, any such other information or representation should not be relied

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upon as having been authorized by the Issuer, the Joint Managers, the Trustee or the Agents; (iv) such person (and any nominee and any person on whose behalf such person is subscribing for the Bonds) is not a "connected person" (as defined in the Listing Rules) of the Issuer, which includes but is not limited to any director, chief executive or substantial shareholder of the Issuer or any of their respective subsidiaries or any associate of any of them within the meaning of the Listing Rules; and (v) such person (and any nominee and any person on whose behalf such person is subscribing for the Bonds) is, and will immediately after completion of the offering of the Bonds be, independent of and not acting in concert with, any of such connected persons in relation to the control of the Issuer.

The laws of some jurisdictions may restrict the distribution of this Offering Circular and the offer and sale of the Bonds or the Shares. To purchase the Bonds, you must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or resell the Bonds or possess this Offering Circular. You must also obtain any consent, approval or permission required for your purchase, offer or sale of the Bonds under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchase, offer or resale. None of the Issuer, the Joint Managers and their respective representatives is making any representation to you or any person regarding the legality of any investment in the Bonds, or the Shares, by you or any person under applicable legal investment or similar laws or regulations. This Offering Circular does not constitute an offer to sell to you or any person, or a solicitation of an offer from you or any person to buy any of the Bonds or the Shares, in any jurisdiction where it is unlawful to make such an offer or solicitation. This Offering Circular is not intended to invite offers to subscribe for or purchase Shares.

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CERTAIN DEFINITIONS, CONVENTIONS AND CURRENCY PRESENTATION

In this Offering Circular:

"BVI" means the British Virgin Islands.
"connected person(s)" has the meaning ascribed to it under the Listing Rules.
"Contractual Arrangements" are the series of contractual arrangements entered into by, among others, WFOE, X.D. Network and the Registered Shareholders, details of which are described in the section headed "Contractual Arrangements".
"Controlling Shareholder(s)" has the meaning ascribed thereto under the Listing Rules and unless the context requires otherwise, refers to Mr. Huang and Happy Today Holding Limited.
"CSRC" means the China Securities Regulatory Commission (中國證券監督管理委員會).
"Director(s)" means the directors of the Company.
"Dream Network" means The Dream Network Technology Co., Ltd. (上海駿夢網絡科技有限公司).
"EIT Law" means the PRC Enterprise Income Tax Law (中華人民共和國企業所得稅法) adopted by the National People's Congress on March 16, 2007, and became effective on 1 January 2008 and amended on 24 February 2017 and on 29 December 2018.
"Foreign Investment Law" means the Foreign Investment Law of the PRC 《( 中華人民共和國外商投資法》) adopted by the National People's Congress on 15 March 2019 with effect from 1 January 2020.
"Gravity" means GRAVITY Co., Ltd., a company established in South Korea on April 4, 2000 and listed on NASDAQ (ticker symbol: GRVY).
"Hong Kong" means the Hong Kong Special Administrative Region of the People's Republic of China.
"IFRS" means the International Financial Reporting Standards, which include standards and interpretations as issued from time to time by the International Accounting Standards Board.

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"Implementation Programme" means the Implementation Programme on Comprehensive Prevention and Control of Juveniles Myopia 《( 綜合防控兒童青少年近視實施方案》) released by eight PRC government authorities at national government level, including NAPP and the Ministry of Education on August 30, 2018.
"Longcheng" means Shanghai Longcheng Network Technology Co., Ltd. (上海龍成網絡科技有限公司).
"MIIT" means the Ministry of Industry and Information Technology of the PRC (中華人民共和國工業和信息化部).
"MOC" and "MCT" means the Ministry of Culture of the PRC (中華人民共和國文化部), which is reformed and known as the Ministry of Culture and Tourism (中華人民共和國文化和旅遊部) since March 2018.
"MOFCOM" means the Ministry of Commerce of the PRC (中華人民共和國商務部).
"NAPP" means the National Administration of Press and Publication (國家新聞出版總署).
"NDRC" means the National Development and Reform Commission (中華人民共和國發展與改革委員會) of the PRC.
"NEEQ" means the National Equities Exchange and Quotations (全國中小企業股份轉讓系統).
"Negative List" means the Special Administrative Measures for the Access of Foreign Investment (Negative List) (2019 Edition) (外商投資准入特別管理措施(負面清單) (2019年版)).
"New Anti-addictionNotice" means the Notice on Preventing Minors from Indulging in Online Games 《( 關於防止未成年人沉迷網絡遊戲的通知》) issued by NAPP on October 25, 2019, which took effect from November 1, 2019.
"PBOC" means the People's Bank of China (中國人民銀行).
"PRC" or "China" and "mainland China" means the People's Republic of China (excluding Hong Kong, the Macao Special Administrative Region of the People's Republic of China and Taiwan).
"PRC Consolidated Affiliated Entities" means the entities the Company controls through the Contractual Arrangements, namely X.D. Network and its respective subsidiaries.

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"Ragnarok M" means Ragnarok M: Eternal Love (仙境傳說：守護永恆的愛).
"Registered Shareholders" means the shareholders of X.D. Network.
"Reorganisation" means the offshore and onshore reorganisation of the Group in January 2019 in preparation for the listing of the Company on the Stock Exchange of Hong Kong.
"RSU Scheme" means the restricted share unit scheme of the Company adopted on 3 June 2019.
"SAFE" means the State Administration of Foreign Exchange of the PRC (中華人民共和國國家外匯管理局).
"SAIC" means the State Administration of Industry and Commerce of the PRC (中華人民共和國國家工商行政管理總局), which is reformed and known as the State Administration of Market Regulation of the PRC (中華人民共和國市場監督管理總局) since 21 March 2018.
"SAT" or "State Administration of Taxation" means the State Administration of Taxation of the PRC (中華人民共和國國家稅務總局).
"Share(s)" means the ordinary shares in the share capital of the Company with a par value of US$0.0001.
"Shareholder(s)" means holder(s) of the Company's Shares.
"United States" or "U.S." means the United States of America.
"VAT" means the PRC value-added tax.
"WFOE" or "XD Interactive" means XD Interactive Entertainment Co., Ltd. (心動互動娛樂有限公司), a wholly foreign-owned enterprise established in the PRC on June 6, 2019 by XD (HK) Limited, an indirect wholly-owned company of the Company.
"X.D. Network" means X.D. Network Inc. (心動網絡股份有限公司), a company established in the PRC on July 29, 2011 and the Company's PRC Consolidated Affiliated Entity.
"Yiwan" means Yiwan (Shanghai) Network Science and Technology Co., Ltd. (易玩(上
海)網絡科技有限公司), a company established in the PRC on March 28, 2016, and the Company's PRC Consolidated Affiliated Entity.

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In this Offering Circular, the technical terms have the following meanings:

"ACT" means action game, which emphasises physical challenges where real-timehand-eye coordination is usually required and usually include a series of subdivisions, such as shooting games, platform games and battle arena games.
"Android" is a mobile operating system developed and maintained by Google Inc. used in smartphones and tablets.
"App Store" is a digital distribution platform operated and developed by Apple Inc., which is the official app store for the iOS operating system.
"ARPG" means action role-playing game, which incorporates elements of action or action-adventure games and normally has real-time combat system rather than turn-based or menu-based combat system.
"ARPPU" means average revenue per month per paying user, which represents the revenue recognised for a particular game or all of the Company's games, as applicable, in the period divided by the number of paying users of the game or all of the Company's games, as applicable, in such period.
"CAGR" means compound annual growth rate.
"CCG" means collective card games, in which players acquire cards into a personal collection from which they create customized decks of cards and challenge other players in matches by strategically crafting customized decks that play to synergies of card combinations.
"CPA" means cost per acquisition, also known as cost per action, which refers to an online advertising pricing model where the advertiser pays for a specified acquisition, for example a sale, click, or form submit.
"CPS" means cost per sale, which refers to an online advertisement pricing model where the advertiser pays on the basis of the number of sales that are directly generated by an advertisement.
"DAUs" means daily active users, which measures the stickiness of an online product by measuring how many unique product users visit the product daily.
"Google Play" is a digital distribution platform operated and developed by Google LLC. It serves as both the official app store for the Android operating system, and a digital media store offering music, books, movies, and television programs.

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"iOS" is a mobile operating system developed and maintained by Apple Inc. used exclusively in Apple devices, such as iPhones and iPads.
"MAUs" means monthly active users, which refers to the number of users who log into a particular game or all of the Company's games, as applicable, in the relevant calendar month for games, and refers to the number of users who access the TapTap mobile app in the relevant calendar month for TapTap, both of which include multiple accounts held by one single user. Average MAUs for a particular period are calculated by dividing the aggregate of the MAUs during that period by the number of months of that period.
"MMORPG" means massively multiplayer online-role-playing games.
"MPUs" means monthly paying users, which refers to the number of paying users in the relevant calendar month in the Company's games.
"nijigen" is a Romanised Japanese word which literally means second dimension, which refers in particular to anime, manga and video games, or the fictional world or characters created in such works.
"PC" means personal computer.
"RPG" means role-playing games, which refers to games that involve a large number of users who interact with each other in an evolving fictional world; each user adopts skill sets (such as melee combat or casting magic spells) and controls the avatars' actions; there are unlimited possible game scenarios where the evolution of the game world is determined by the actions of the users, and the storyline continuously evolves even while the users are offline and away from the games.
"SLG" means simulation games, which refers to, in a broad sense, games designed to closely simulate aspects of real-world activities and, in a narrow sense and for purpose of this prospectus, turn-based strategy games.

The term "Issuer" and "Company" refers to XD Inc., and the term "Group" refers to the Company and its subsidiaries taken as a whole.

Market data and certain industry forecasts and statistics in this Offering Circular have been obtained from both public and private sources, including market research, publicly available information and industry publications ("Third Party Information"). Although the Group believes this information to be reliable, it has not been independently verified by the Group, the Joint Managers or the Trustee or the Agents or any of their respective directors, officers, employees, agents, advisers, representatives or affiliates, and neither the Group, the Joint Managers, the Trustee or the Agents nor any of their respective directors, officers, employees, agents, advisers, representatives or affiliates make any representation as to the accuracy or completeness of Third

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Party Information. In addition, third-party information providers may have obtained information from market participants and such information may not have been independently verified. This Offering Circular summarises certain documents and other information, and investors should refer to them for a more complete understanding of what is discussed in those documents. In making an investment decision, each investor must rely on its own examination of the Group and the terms of the offering and the Bonds, including the merits and risks involved.

The statistics set forth in this Offering Circular relating to the PRC and the gaming industry in the PRC were taken or derived from various government and private publications. None of the Joint Managers, the Trustee and the Agents or any of their respective directors, officers, employees, agents, advisers, representatives or affiliates do not make any representation as to the accuracy of such statistics, which may not be consistent with other information compiled within or outside the PRC. Due to possibly inconsistent collection methods and other problems, the statistics herein may be inaccurate and should not be unduly relied upon.

In this Offering Circular, all references to "U.S.$" and "U.S. dollars" are to United States dollars; all references to "HK$" and "H.K. dollars" are to Hong Kong dollars, the official currency of Hong Kong; and all references to "RMB" or "Renminbi" are to Renminbi, the official currency of the PRC. Historical amounts translated into Renminbi have been translated at historical rates of exchange. Such translations should not be construed as representations that the amounts referred to herein could have been or could be exchanged into Renminbi at those rates or any other rate at all.

The Group records and publishes its financial statements in Renminbi. Unless otherwise stated in this Offering Circular, all translations from Renminbi amounts to U.S. dollars were made at the rate of RMB6.5250 to U.S.$1.00, the noon buying rate in New York City for cable transfers payable in Renminbi as certified for customs purposes by the Federal Reserve Bank of New York on 31 December 2020, and all translations from HK dollars into U.S. dollars were made at the rate of HK$7.7534 to U.S.$1.00, the noon buying rate in New York City for cable transfers payable in H.K. dollars as certified for customs purposes by the Federal Reserve Bank of New York on 31 December 2020. All such translations in this Offering Circular are provided solely for your convenience and no representation is made that the Renminbi amounts referred to herein have been, could have been or could be converted into U.S. dollars or H.K. dollars, or vice versa, at any particular rate or at all. For further information relating to the exchange rates, see "Exchange Rate Information".

In this Offering Circular, the English names of the PRC nationals, entities, departments, facilities, laws, regulations, certificates, titles and the like are translations or transliterations of their Chinese names and are included for identification purposes only.

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INCORPORATION BY REFERENCE

The audited consolidated financial statements of the Group (including the notes thereto) which are contained in pages 66 to 143 of the annual report of the Company as at and the year ended 31 December 2019, and pages 12 to 29 of the annual results announcement of the Company as at and for the year ended 31 December 2020 (the "Annual Financial Statements") are incorporated by reference in this Offering Circular. Copies of the Annual Financial Statements are available and may be downloaded free of charge from the website of the Hong Kong Stock Exchange at www.hkex.com.hk. The Annual Financial Statements have been prepared and presented in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board and have been audited by PricewaterhouseCoopers in accordance with International Standards on Auditing ("ISAs") issued by the International Auditing and Assurance Standards Board (the "IAASB").

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Offering Circular contains forward-looking statements that state the Issuer's or the Group's beliefs, expectations or predictions for the future that are, by their nature, subject to significant risks and uncertainties.

These forward-looking statements include, without limitation, statements relating to:

the Group's operations and business prospects;
the Group's business and operating strategies and the Group's ability to implement such strategies;
the Group's ability to develop and manage the Group's operations and business;
the Group's ability to maintain or increase utilization of the Group's facilities;
the Group's capital expenditure programs and future capital requirements;
the Group's future general and administrative expenses;
competition for, among other things, capital, technology and skilled personnel;
the Group's ability to control costs;
the Group's dividend policy;
general economic conditions;
the actions and developments of the Group's competitors;
changes to regulatory and operating conditions in the industry and geographical markets in which the Issuer operates; and
other factors beyond the Group's control.

When used herein, the words "aim," "anticipate," "believe," "can," "could," "estimate," "expect," "going forward," "intend," "may," "ought to," "plan," "potential," "project," "prospects," "seek," "should," "sustain," "will," "would" and similar expressions, as they relate to the Issuer and the Group, are intended to identify these forward looking statements. All statements (other than statements of historical facts included in this Offering Circular), including statements regarding the Group's strategy, plans and objectives of management for future operations, are forward-looking statements. These forward-looking statements reflect the current views of the

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Group's management as of the date of this Offering Circular with respect to future events and are subject to certain risks, uncertainties and assumptions, including the risk factors described under "Risk Factors" and elsewhere in this Offering Circular. One or more of these risks or uncertainties may materialize, or the underlying assumptions may prove to be incorrect. Actual results and events may differ materially from information contained in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove to be incorrect, the Group's results of operations and financial condition may be adversely affected and may vary materially from those described herein as anticipated, believed or expected. Accordingly, such statements are not a guarantee of future performance and you should not place undue reliance on such forward-looking information. Moreover, the inclusion of forward-looking statements should not be regarded as representations by the Issuer or the Group that the Issuer's or the Group's plans and objectives will be achieved or realized.

Subject to the requirements of applicable laws, the Issuer undertakes no obligation to update or otherwise revise any forward-looking statements contained in this Offering Circular, whether as a result of new information, future events or otherwise. As a result of these and other risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Offering Circular might not occur in the way the Issuer expects or at all. All forward-looking statements contained in this Offering Circular are qualified by reference to this cautionary statement.

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SUMMARY

This summary aims to give you an overview of the information contained in this Offering Circular. As it is a summary, it does not contain all the information that may be important to you. You should read this entire Offering Circular carefully, including the "Risk Factors" section and the financial statements and related notes.

Overview

The Group is a national and international game developer and operator of quality games, with a diverse portfolio of games across different genres. TapTap, which was co-founded by the Group in 2016, is the largest by MAU and fast-growing online game community and platform in China.

Leveraging the Group's deep understanding of gamers' needs for high-quality games and the Group's insights in latest market trends, the Group has been able to consistently develop and operate popular games in China, such as Ragnarok M, Shen Xian Dao (HD) (神仙道高清重製版), Girls' Frontline (少女前線), Heng Sao Qian Jun (橫掃千軍), Sausage Man (香腸派對), and Ulala (不休的烏拉拉). As of 31 December 2020, the Group had 33 online games and 13 premium games in operation, comprising many popular games in the major game genres of RPG, CCG, SLG, battle arena game and placement game. In addition, the Group has strong in-house games development capabilities and develops games in-house.

For the years ended 31 December 2018, 2019 and 2020, the Group's revenue was RMB1,887.1 million, RMB2,838.1 million and RMB2,847.6 million respectively. The Group's revenue from game business contributed 84.4%, 83.8% and 81.9%, respectively, and revenue from information service business, comprising primarily online marketing services provided by TapTap, contributed 15.6%, 16.2% and 18.1%, respectively, to total revenue during the same periods. In addition, for the years ended 31 December 2018, 2019 and 2020, the Group's profit for the year was RMB352.7 million, RMB513.4 million and RMB55.8 million, respectively.

The Group's Strengths

The Group believes the following competitive strengths contribute to the Group's success and position them for continued growth:

Proven track record of developing and operating popular games;
Vibrant and engaging game development ecosystem and platform;
Established overseas game publishing and operating capabilities;
Excellent game development and data analytics capabilities; and

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Experienced management team dedicated to innovation.

The Group's Strategies

The Group intends to pursue the following strategies to further grow the Group's business:

Further enhance the Group's game portfolio;
Increase active user base and engagement of TapTap;
Deepen overseas operations;
Upgrade information infrastructure and technology; and
Seek strategic investments and acquisitions.

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THE OFFERING

The following is a general summary of the terms of the offering of the Bonds. This summary is partly derived from, and should be read in conjunction with, the full text of the Terms and Conditions (see "Terms and Conditions of the Bonds"), the Trust Deed and the Agency Agreement (both terms as defined in the "Terms and Conditions of the Bonds") relating to the Bonds. The Conditions, the Trust Deed and the Agency Agreement will prevail to the extent of any inconsistency with the terms set out in this summary. Defined terms used in this summary that are not defined herein shall have the meanings accorded to them in the Conditions.

Issuer. . . . . . . . . . . . . . . . . . . . . . . .

Issue . . . . . . . . . . . . . . . . . . . . . . . .

Shares . . . . . . . . . . . . . . . . . . . . . . .

Issue Price . . . . . . . . . . . . . . . . . . . .

Form and Denomination of the

Bonds. . . . . . . . . . . . . . . . . . . . . .

XD Inc.

US$280,000,000 1.25 per cent. convertible bonds due 2026

Ordinary shares of US$0.0001 each in the share capital of the Issuer.

100 per cent. of the principal amount of the Bonds.

The Bonds are issued in registered form in the denomination of US$200,000 each and integral multiples of US$1,000 in excess thereof. The Bonds will upon issue be initially represented by the Global Certificate which will, on the Issue Date, be deposited with, and registered in the name of a nominee of, a common depositary for Euroclear SA/NV and Clearstream Banking S.A.

Interest . . . . . . . . . . . . . . . . . . . . . .	The Bonds will bear interest on their outstanding principal
	amount from and including 12 April 2021 at the rate 1.25
	per cent. per annum, payable semi-annually in arrear in
	equal instalments of US$6.25 per Calculation Amount (as
	defined in the Terms and Conditions) on 12 April and 12
	October in each year. See "Terms and Conditions of the
	Bonds - Interest".
Issue Date . . . . . . . . . . . . . . . . . . . .	12 April 2021.
Maturity Date . . . . . . . . . . . . . . . . .	12 April 2026.

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Negative Pledge. . . . . . . . . . . . . . . . So long as any Bond remains outstanding, the Issuer will not, and will ensure that none of its Principal Subsidiaries (as defined in the Terms and Conditions) will, create, permit to subsist or arise or have outstanding, any mortgage, charge, pledge, lien or other encumbrance or security interest securing any obligation of any person or any other arrangement with similar economic effect upon the whole or any part of its present or future undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness (as defined in the Terms and Conditions), or any guarantee or indemnity in respect of any Relevant Indebtedness (as defined in the Terms and Conditions) without at the same time or prior thereto according to the Bonds the same security as is created or subsisting to secure any such Relevant Indebtedness (as defined in the Terms and Conditions), guarantee or indemnity equally and rateably or such other security as shall be approved by an Extraordinary Resolution of the Bondholders. See "Terms and Conditions of the Bonds - Covenants - Negative Pledge".

Status of the Bonds . . . . . . . . . . . . . The Bonds will constitute direct, unsubordinated, unconditional and (subject to Condition 4(A) of the Terms and Conditions) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. See "Terms and Conditions of the Bonds - Status".

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Taxation. . . . . . . . . . . . . . . . . . . . . . All payments of principal and interest made by or on behalf of the Issuer under or in respect of the Bonds or the Trust Deed will be made free from any restriction or condition and be made without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Cayman Islands, the PRC or Hong Kong or any authority thereof or therein having power to tax, unless deduction or withholding of such taxes, duties, assessments or governmental charges is compelled by law. In such event, the Issuer shall pay Additional Tax Amounts (as defined in the Terms and Conditions) as will result in the receipt by the Bondholders of such amounts as would have been received by them had no such deduction or withholding been required, except in circumstances specified in Condition 9 of the Terms and Conditions. See "Terms and Conditions of the Bonds - Taxation".

Conversion Price . . . . . . . . . . . . . . . The Conversion Price will initially be HK$63.45 per Share, which will be subject to adjustments for, among other things, capitalisation of profits and reserves, capital distributions, rights issues, consolidation, subdivision, redesignation and reclassification of Shares, issuance of options, rights, warrants, further convertible or exchangeable bonds or Shares at beyond a certain discount to current market price and certain other dilutive events. See "Terms and Conditions of the Bonds - Conversion - Adjustments to Conversion Price".

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Conversion Right and Period . . . . . . Subject to and upon compliance with the Terms and Conditions, the Conversion Right (as defined in the Terms and Conditions) attaching to any Bond may be exercised, at the option of the holder thereof, at any time on or after 23 May 2021 (i) up to the close of business (at the place where the Certificate evidencing such Bond is deposited for conversion) on the seventh day prior to the Maturity Date (both days inclusive) (but, except as provided in Condition 6(A)(iv) and Condition 10 of the Terms and Conditions, in no event thereafter) or (ii) if such Bond shall have been called for redemption by the Issuer before the Maturity Date, then up to the close of business (at the place aforesaid) on a date no later than 15 days (both days inclusive and in the place aforesaid) prior to the date fixed for redemption thereof or (iii) if notice requiring redemption has been given by the relevant holder of such Bond pursuant to Condition 8(D) or Condition 8(E) of the Terms and Conditions, then up to the close of business (at the place aforesaid) on the business day prior to the giving of such notice in respect of the Bonds held by such holder of the Bonds. See "Terms and Conditions of the Bonds - Conversion - Conversion Right".

Redemption at Maturity . . . . . . . . . . Unless previously redeemed, converted or purchased and cancelled as provided in the Terms and Conditions of the Bonds, the Issuer will redeem each Bond at its principal amount together with accrued and unpaid interest thereon on the Maturity Date. See "Terms and Conditions of the Bonds - Redemption, Purchase and Cancellation - Maturity".

- 6 -

Redemption for Taxation Reasons . . The Bonds may be redeemed at the option of the Issuer in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days' notice to the Bondholders in accordance with Condition 17 of the Terms and Conditions and in writing to the Trustee and the Principal Agent (which notice shall be irrevocable) on the Tax Redemption Date (as defined in the Terms and Conditions), at their principal amount together with interest accrued but unpaid up to (but excluding) the redemption date (if any), if immediately prior to the giving of such notice, the Issuer determines and certifies to the Trustee (i) the Issuer has or will become obliged to pay Additional Tax Amounts (as defined in the Terms and Conditions) as a result of any change in, or amendment to, the laws or regulations of the PRC, the Cayman Islands or Hong Kong or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 31 March 2021, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no Tax Redemption Notice (as defined in the Terms and Conditions) shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Tax Amounts (as defined in the Terms and Conditions) were a payment in respect of the Bonds then due. See "Terms and Conditions of the Bonds

Redemption, Purchase and Cancellation - Redemption for Taxation Reasons".

Bondholders' Tax Option . . . . . . . . . If the Issuer exercises its tax redemption right, each Bondholder shall have the right to elect that its Bonds shall not be redeemed. Upon a Bondholder electing not to have its Bonds redeemed in such circumstances, any payments due after the relevant date shall be made subject to any deduction or withholding of any tax required to be withheld or deducted. See "Terms and Conditions of the Bonds - Redemption, Purchase and Cancellation - Bondholders' Tax Option".

- 7 -

Redemption at the Option of the On giving not less than 30 nor more than 60 days' notice to Issuer . . . . . . . . . . . . . . . . . . . . . . the Bondholders and to the Trustee and the Principal Agent in writing (which notice will be irrevocable), the Issuer may redeem all, but not some only, of the Bonds on the date specified in the Optional Redemption Notice (as defined in the Terms and Conditions) at their principal amount together with interest accrued to (but excluding) such date (if any), (i) at any time after 26 April 2024 but prior to the Maturity Date, provided that the Closing Price of the Shares of the Issuer, translated into U.S. dollars at the Prevailing Rate (as defined in the Terms and Conditions) applicable to the relevant Trading Day (as defined in the Terms and Conditions), for 20 out of 30 consecutive Trading Days prior to the date upon which notice of such redemption is published was at least 130 per cent. of the Conversion Price then in effect (translated into U.S. dollars at the Fixed Exchange Rate (as defined in the Terms and Conditions)) or (ii) at any time if, immediately prior to the date the relevant Optional Redemption Notice is given, Conversion Rights shall have been exercised and/or purchased (and corresponding cancellations) and/or redemptions effected in respect of 90 per cent. or more in principal amount of the Bonds originally issued (which shall for this purpose include any further bonds issued in accordance with Condition 15 of the Terms and Conditions and consolidated and forming a single series therewith).

See "Terms and Conditions of the Bonds - Redemption,

Purchase and Cancellation - Redemption at the Option of the Issuer".

- 8 -

Redemption at the Option of the	On 12 April 2024, each Bondholder will have the right to
Bondholders . . . . . . . . . . . . . . . . .	require the Issuer to redeem all or some only of the Bonds
	of such Bondholder at 100 per cent. of their principal
	amount together with interest accrued but unpaid up to (but
	excluding) the date fixed for redemption upon giving notice
	(together with the Certificate evidencing the Bonds to be
	redeemed) not more than 60 days and not less than 30 days
	prior to 12 April 2024. See "Terms and Conditions of the
	Bonds - Redemption, Purchase and Cancellation -
	Redemption at the Option of the Bondholders".
Redemption for Relevant Event . . . .	Each Bondholder shall have the right, at such holder's
	option, to require the Issuer to redeem all or some only of
	such Bondholder's Bonds on the Relevant Event
	Redemption Date (as defined in the Terms and Conditions)
	at their principal amount together with interest accrued but
	unpaid up to (but excluding) such date.
	A "Relevant Event" occurs:
	(i)	when the Shares cease to be listed or admitted to
		trading or are suspended from trading for a period
		equal to or exceeding 30 consecutive Trading Days on
		the Hong Kong Stock Exchange or, if applicable, the
		Alternative Stock Exchange (as defined in the Terms
		and Conditions); or
	(ii)	when there is a Change of Control (as defined in the
		Terms and Conditions); or
	(iii)	when less than 25 per cent. of the Issuer's total
		number of issued Shares are held by the public (as
		interpreted under LR8.24 of the Rules Governing the
		Listing of Securities on The Stock Exchange of Hong
		Kong Limited); or

- 9 -

when (a) there is any change in or amendment to the laws, regulations and rules of the PRC or the official interpretation or official application thereof (a "change in law") that results in (x) the Issuer, its Subsidiaries and its consolidated affiliated entities (collectively, the "Group") (as in existence immediately subsequent to such change in law), as a whole, being legally prohibited from operating substantially all of the business operations conducted by the Group (as in existence immediately prior to such change in law) as of the last date of the period described in the Issuer's consolidated financial statements for the most recent fiscal year or half year and (y) the Issuer being unable to continue to derive substantially all of the economic benefits from the business operations conducted by the Group (as in existence immediately prior to such change in law) in the same manner as reflected in the Issuer's consolidated financial statements for the most recent fiscal year or half year and (b) the Issuer has not furnished to the Trustee, prior to the date that is twelve months after the date of the change in law, an opinion from an independent financial adviser or an independent legal counsel addressed to the Trustee stating either (x) that the Issuer is able to continue to derive substantially all of the economic benefits from the business operations conducted by the Group (as in existence immediately prior to such change in law), taken as a whole, as reflected in the Issuer's consolidated financial statements for the most recent fiscal year or half year (including after giving effect to any corporate restructuring or reorganization plan of the Group) or (y) that such change in law would not materially adversely affect the Issuer's ability to make principal and interest payments on the Bonds when due or to convert the Bonds in accordance with the Terms and Conditions.

See "Terms and Conditions of the Bonds - Redemption, Purchase and Cancellation - Redemption for Relevant Event".

- 10 -

Events of Default. . . . . . . . . . . . . . . If any of the events set out in "Terms and Conditions of the Bonds - Events of Default" occurs, the Trustee at its discretion may, and if so requested in writing by the Bondholders holding not less than 25 per cent. in principal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution (as defined in the Trust Deed) shall (subject in any such case to being indemnified and/or secured and/or prefunded by the Bondholders to its satisfaction), give written notice to the Issuer that the Bonds are, and they shall accordingly thereby become, immediately due and repayable at its principal amount together with interest accrued but unpaid up to (but excluding) the date of payment. See "Terms and Conditions of the Bonds - Events of Default".

Share Ranking . . . . . . . . . . . . . . . . . The Shares to be issued upon exercise of Conversion Rights will be fully paid and will in all respects rank pari passu with the fully paid Shares in issue on the relevant Registration Date. Save as set out in the Terms and Conditions of the Bonds, a holder of Shares issued on conversion of the Bonds shall not be entitled to receive any rights, the record date for which falls prior to the relevant Registration Date. See "Terms and Conditions of the Bonds

- Conversion".

Further Issues . . . . . . . . . . . . . . . . . The Issuer may from time to time, without the consent of the Bondholders, create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects except for the issue date, the first payment of interest on them and the timing for the making of the NDRC Post-issue Filing) and so that such further issue shall be consolidated and form a single series with the Bonds. See "Terms and Conditions of the Bonds - Further Issues".

Clearance. . . . . . . . . . . . . . . . . . . . . The Bonds will be cleared through Euroclear and Clearstream. Euroclear and Clearstream each hold securities for their customers and facilitate the clearance and settlement of securities transactions by electronic book entry transfer between their respective account holders.

- 11 -

Governing Law . . . . . . . . . . . . . . . .	The Bonds and any non-contractual obligations arising out
	of or in connection with them will be governed by and will
	be construed in accordance with English law.
Jurisdiction . . . . . . . . . . . . . . . . . . .	The courts of Hong Kong are to have exclusive jurisdiction
	to settle any disputes which may arise out of or in
	connection with the Bonds.

Securities Lending Agreement . . . . . Happy Today Holding Limited, an existing shareholder of the Issuer (the "Lender"), has entered into (i) a securities lending contract with Credit Suisse AG, Singapore Branch (the "Borrower") dated 17 March 2021 and (ii) a letter agreement authorising stock borrow dated 31 March 2021 (collectively, the "Securities Lending Agreement"), pursuant to which the Lender will lend, in aggregate, 27,800,000 fully paid, ordinary shares in the Issuer to the Borrower, for the purposes of facilitating stock lending by the Borrower and/or its affiliates to investors in the Bonds.

Legal Entity Identifier . . . . . . . . . . .

ISIN . . . . . . . . . . . . . . . . . . . . . . . .

Common Code . . . . . . . . . . . . . . . . .

Listing and Trading of the Bonds

and the Shares . . . . . . . . . . . . . . .

655600SO97YJOKFJGL95

XS2327118928

232711892

Application will be made to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Bonds to Professional Investors only and formal permission is expected to become effective on or about 13 April 2021. The Shares are listed on the Hong Kong Stock Exchange. Application will be made to the Hong Kong Stock Exchange for the listing of the Shares issuable upon conversion of the Bonds.

Trustee. . . . . . . . . . . . . . . . . . . . . . . The Bank of New York Mellon, London Branch

Principal Agent . . . . . . . . . . . . . . . . The Bank of New York Mellon, London Branch

Registrar and Transfer Agent . . . . . . The Bank of New York Mellon SA/NV, Luxembourg Branch

Conversion Agent . . . . . . . . . . . . . . The Bank of New York Mellon, London Branch

- 12 -

Selling Restrictions . . . . . . . . . . . . .	There are restrictions on the offer, sale and transfer of the
	Bonds in, among others, the United States, the United
	Kingdom, Hong Kong, Singapore, Japan, the PRC, the
	European Economic Area and the Cayman Islands.
Global Certificate . . . . . . . . . . . . . .	For as long as the Bonds are represented by the Global
	Certificate and the Global Certificate is deposited with a
	common depository, payments of principal and interest in
	respect of the Bonds represented by the Global Certificate
	will be made without presentation and, if no further
	payment falls to be made in respect of the Bonds, against
	surrender of the Global Certificate to or to the order of the
	Principal Agent or such other Paying Agent as shall have
	been notified to Bondholders for such purpose. The Bonds
	which are represented by the Global Certificate will be
	transferable only in accordance with the rules and
	procedures for the time being of the relevant clearing
	system.
Use of Proceeds. . . . . . . . . . . . . . . .	For a description of the use of proceeds of this Offering,
	see "Use of Proceeds".
Risk Factors . . . . . . . . . . . . . . . . . .	For a discussion of certain factors that should be
	considered in evaluating an investment in the Bonds, see
	"Risk Factors".

- 13 -

Issuer Lock-up . . . . . . . . . . . . . . . . . Subject to certain exceptions, the Issuer has agreed in the Subscription Agreement that neither the Issuer, any member of the Group or any person acting on their behalf will (i) issue, offer, sell, pledge, contract to sell or otherwise dispose of or grant options, issue warrants or offer rights entitling persons to subscribe or purchase any interest in any Shares or securities of the same class as the Bonds or the Shares or any securities convertible into, exchangeable for or which carry rights to subscribe or purchase the Bonds, the Shares or securities of the same class as the Bonds or the Shares or other instruments representing interests in the Bonds, the Shares or other securities of the same class as them, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of the ownership of the Shares,

enter into any transaction with the same economic effect as, or which is designed to, or which may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such transaction of the kind described in (i), (ii) or (iii) is to be settled by delivery of Shares or other securities, in cash or otherwise or (iv) announce or otherwise make public an intention to do any of the foregoing, in any such case without the prior written consent of the Joint Managers between the date of the Subscription Agreement and the date which is 90 calendar days after the Issue Date (both dates inclusive).

- 14 -

Shareholder Lock-up . . . . . . . . . . . . Subject to certain exceptions, each of Happy Today Holding Limited and Kros Dai Inc. has agreed that neither it nor any companies or their subsidiaries over which it exercises direct or indirect management or voting control, nor any person acting on its or their behalf will, for a period commencing from the date of the Subscription Agreement to 90 calendar days after the Issue Date, without the prior written consent of the Joint Managers, (i) issue, offer, sell, pledge, contract to sell or otherwise dispose of or grant options, issue warrants or offer rights entitling persons to subscribe or purchase any interest in any Lock-up Shares (as defined in the Subscription Agreement) or securities of the same class as the Lock-up Shares or any securities convertible into, exchangeable for or which carry rights to subscribe or purchase the Lock-up Shares or securities of the same class as Lock-up Shares or other instruments representing interests in Lock-up Shares or other securities of the same class as them, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of the ownership of Lock-up Shares, (iii) enter into any transaction with the same economic effect as, or which is designed to, or which may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such transaction of the kind described in (i), (ii) or (iii) is to be settled by delivery of Lock-up Shares or other securities, in cash or otherwise or

announce or otherwise make public an intention to do any of the foregoing.

Strategic Equity Placement . . . . . . . Concurrent with the offering of the Bonds, the Issuer proposes to enter into an equity placement 26,318,000 ordinary shares of the Issuer at a placement price of HKD42.38 with Bilibili Inc. and Taobao China Holding Limited (the "Strategic Equity Placement"). The Strategic Equity Placement will be conducted concurrently with the offering of the Bonds but the completion of the issuance of the Bonds and the Strategic Equity Placement are not inter-conditional.

- 15 -

SUMMARY FINANCIAL INFORMATION

The summary financial information set forth below has been extracted from the Group's audited consolidated financial statements as at and for the year ended 31 December 2019 as well as the annual results announcement of the Company as at and for the year ended 31 December 2020 (the "Annual Financial Statements"). The Annual Financial Statements have been audited by PricewaterhouseCoopers. The information set forth below should be read in conjunction with, and is qualified in its entirety by reference to, the relevant published consolidated financial statements of the Group, including the notes thereto, incorporated by reference in this Offering Circular. The Group's Annual Financial Statements are prepared and presented in accordance with International Financial Reporting Standards ("IFRS").

During the year ended 31 December 2020, the Group has applied the following new and amendments to IFRS: Amendments to IAS 1 and IAS 8, Amendments to IFRS 3, Amendments to IFRS 16, Amendments to IFRS 9, IAS 39 and IFRS 7. Details of the changes are set out in note 2 of the Group's audited financial information extracted from the annual results announcement of the company as at and for the year ended 31 December 2020.

- 16 -

Summary Consolidated Income Statements

			For the years ended 31 December
			2018		2019				2020

					(Audited)
					(RMB'000)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . .	1,887,108		2,838,097				2,847,553
Cost of revenues . . . . . . . . . . . . . . . . . . . . .	(776,309)	(1,066,320)		(1,315,525)
Gross profit
1,110,799		1,771,777				1,532,028


Selling and marketing expenses. . . . . . . . . .	(447,989)	(745,101)		(633,394)
Research and development expenses . . . . . .	(197,780)	(317,596)		(657,506)
General and administrative expenses . . . . . .	(107,315)	(202,692)		(179,916)
Net impairment losses on financial assets . .	(299)	(1,889)		(1,624)
Fair value changes on investments
measured at fair value through profit or
loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(3,351)	8,186				(1,426)
Other income . . . . . . . . . . . . . . . . . . . . . . .	8,141		12,426				26,166
Other gains/(losses), net . . . . . . . . . . . . . . .	24,232		4,179				3,361

Operating profit . . . . . . . . . . . . . . . . . . . .	386,438		529,290				87,689
Finance income . . . . . . . . . . . . . . . . . . . . . .	4,993		8,319				15,505
Finance costs. . . . . . . . . . . . . . . . . . . . . . . .	(2,320)	(2,951)		(3,986)

Finance income, net . . . . . . . . . . . . . . . . . .	2,673		5,368				11,519
Share of results of investments accounted
for using equity method . . . . . . . . . . . . . .	285		10,767				14,915
Impairment of investments accounted for
using equity method . . . . . . . . . . . . . . . .	-	-	(7,137)

Profit before income tax . . . . . . . . . . . . . .	389,396		545,425				106,986
Income tax expense . . . . . . . . . . . . . . . . . . .	(36,675)	(31,996)		(51,198)

Profit for the year . . . . . . . . . . . . . . . . . . .	352,721		513,429				55,788

Other comprehensive income:
Items that may be reclassified to profit or
loss
- Currency translation differences . . . . . . .	12,980		7,999				(25,062)
Items that may not be reclassified to profit
or loss
- Currency translation differences . . . . . . .	-	(592)		(96,170)

Total comprehensive income for the year .		365,701		520,836				(65,444)
Profit for the year attributable to:


Equity holders of the Company . . . . . . . . . .	285,028		346,563				9,145
Non-controllinginterests . . . . . . . . . . . . . . .	67,693		166,866				46,643

			352,721		513,429				55,788
Total comprehensive income for the year


attributable to: . . . . . . . . . . . . . . . . . . . .
Equity holders of the Company . . . . . . . . . .	294,874		351,933				(103,896)
Non-controllinginterests . . . . . . . . . . . . . . .	70,827		168,903				38,452

			365,701		520,836				(65,444)
Earnings per share for profit for the


year attributable to the equity holders
of the Company . . . . . . . . . . . . . . . . . . .
Basic and diluted earnings per share
(in RMB) . . . . . . . . . . . . . . . . . . . . . . . . .	0.81		0.98				0.02

- 17 -

Summary Consolidated Balance Sheets

			As at 31 December
		2018	2019		2020

				(Audited)
				(RMB'000)
ASSETS
Non-Current assets
Property, plant and equipment . . . . . . . . . . .	45,553	86,938		112,592
Right-of-useassets . . . . . . . . . . . . . . . . . . .	59,290	37,644		129,555
Intangible assets . . . . . . . . . . . . . . . . . . . . .	192,175	198,938		199,322
Deferred tax assets. . . . . . . . . . . . . . . . . . . .	8,393	11,349		16,810
Investments accounted for using the equity
method. . . . . . . . . . . . . . . . . . . . . . . . . . .	44,305	52,800		66,326
Long term investments measured at fair
value through profit or loss . . . . . . . . . . .	33,687	29,918		23,670
Prepayments, deposits and other assets . . . .	64,966	74,156		26,713

		448,369	491,743		574,988
Current assets

Trade receivables . . . . . . . . . . . . . . . . . . . .	449,070	406,143		299,161
Income tax prepayment . . . . . . . . . . . . . . . .	18,537	14,167		30,254
Prepayments and other assets . . . . . . . . . . .	78,844	119,775		120,827
Short-terminvestments . . . . . . . . . . . . . . . .	156,647	497,363		-
Cash and cash equivalents . . . . . . . . . . . . . .	573,233	1,336,869		2,319,512

		1,276,331	2,374,317		2,769,754

Total assets. . . . . . . . . . . . . . . . . . . . . . . . .	1,724,700	2,866,060		3,344,742
EQUITY


Share capital . . . . . . . . . . . . . . . . . . . . . . . .	-	284		306
Share premium . . . . . . . . . . . . . . . . . . . . . .	-	5,357,114		6,095,544
Other reserves . . . . . . . . . . . . . . . . . . . . . . .	755,457	(4,137,328)	(4,444,279)
Retained earnings . . . . . . . . . . . . . . . . . . . .	322,457	651,800		644,888

Equity attributable to equity holders of
the Company . . . . . . . . . . . . . . . . . . . . .	1,077,914	1,871,870		2,296,459

Non-controllinginterests . . . . . . . . . . . . . . .	264,646	414,660		283,667

Total equity . . . . . . . . . . . . . . . . . . . . . . . .	1,342,560	2,286,530		2,580,126
LIABILITIES


Non-current liabilities
Deferred tax liabilities. . . . . . . . . . . . . . . . .	1,894	2,135		1,621
Lease liabilities . . . . . . . . . . . . . . . . . . . . . .	37,859	23,056		81,920

		39,753	25,191		83,541

Current liabilities
Trade payables . . . . . . . . . . . . . . . . . . . . . .	101,275	200,845		164,560
Advance from customers . . . . . . . . . . . . . . .	9,089	15,756		21,215
Other payables and accruals . . . . . . . . . . . .	83,872	151,705		239,968
Contract liabilities . . . . . . . . . . . . . . . . . . . .	90,921	99,321		128,546
Current Income tax liabilities . . . . . . . . . . .	34,338	70,250		78,713
Lease liabilities . . . . . . . . . . . . . . . . . . . . . .	22,892	16,462		48,073

		342,387	554,339		681,075

Total liabilities . . . . . . . . . . . . . . . . . . . . . .	382,140	579,530		764,616
Total equity and liabilities . . . . . . . . . . . .

1,724,700	2,866,060		3,344,742

- 18 -

RISK FACTORS

Investing in the Bonds involves risks, and you should carefully consider the risks described below before making an investment decision. The following describes some of the significant risks that could affect the Issuer, the Group and the value of the Bonds. Some risks may be unknown to the Issuer, the Group and other risks, currently believed to be immaterial, could be material. All of these could materially and adversely affect the Issuer's or the Group's business, financial condition, results of operations and prospects. The market price of the Bonds could decline due to any of these risks and investors may lose all or part of their investment. This Offering Circular also contains forward-looking statements that involve risks and uncertainties. The Issuer's or the Group's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks the Issuer faces described below and elsewhere in this Offering Circular. In addition, you should also carefully consider all of the information.

RISKS RELATING TO THE GROUP'S BUSINESS AND INDUSTRY

The global economy is facing significant uncertainties and disruptions caused by COVID-19.

The World Health Organization declared the outbreak of COVID-19 to be a global epidemic. As a result of widespread infection in the world, many countries, including the PRC, Japan, the United States, members of the European Union and the United Kingdom, declared a state of emergency and imposed extensive business and travel restrictions with a view to containing the pandemic, and there is no assurance that such measures will be, or will continue to be, effective.

Governments and central banks around the globe have introduced, or are planning to introduce, fiscal and monetary stimulus measures including tax cuts, direct subsidies, rate cuts, bond repurchase programmes and suspension or relaxation of prudential bank capital requirements. A number of governments have revised their GDP growth forecasts downward for 2020 in response to the economic slowdown caused by the spread of COVID-19, and it is possible that the outbreak of COVID-19 may cause a prolonged global economic crisis or recession, which may in turn adversely affect the Group's business. There is no assurance that the outbreak will not lead to a decline in demand for the Group's services. In addition, the PRC regulators have promulgated a series of measures to encourage PRC financial institutions to increase financial support to business and consumers to combat the challenges arising from the COVID-19 pandemic. In June 2020, the State Council of the PRC called on financial institutions to make available RMB1.5 trillion of profit for the year ended 31 December 2020 for the benefit of enterprises in response to the outbreak of COVID-19, through offering lower interest rates, cutting fees, deferring loan repayments, and granting more unsecured loans to small businesses. However, there is no assurance that such measures may be introduced in time or will be sufficient or effective in delivering their policy objectives or be successful in containing the economic impact of the pandemic or in stabilising the markets.

- 19 -

In light of the significant uncertainties the global economy is facing and the significant volatilities the global financial markets are experiencing, the Group's business operations and financial condition may be adversely affected.

If the Group fails to maintain and grow its user base or keep its gamers engaged through its

games, its growth and business may not be sustainable.

For the Group's business to achieve sustainable growth, the Group must continuously make strong efforts to attract new gamers, retain existing gamers and ultimately improve the monetisation of its games. This requires that the Group continually launch popular games and release updates of its existing games to keep gamers engaged.

The success of user monetization largely depends on the Group's ability to continue to retain and expand its user base and convert more registered users into paying users. Releasing new games or version updates can help retain and expand the Group's user base. However, developing new games may involve going through many iterations and suffering setbacks. Therefore, the Group may not be able to formulate accurate plans for game development. Gamers might lose faith in the Group because of unexpected delays in releasing new games. In addition, despite the Group's efforts in sourcing and developing high-quality games, there can be no assurance that the games it launches will gain popularity within a short period of time. If a new game does not gain commercial success and the Group fails to introduce additional games or updates in a timely manner to maintain its user base, the Group's existing games would eventually lose popularity, resulting in a decline in the total number of its active users and paying users.

The Group also cannot guarantee that its existing games will sustain their current level of popularity. Gamers may lose interest in the Group's games over time, or they may not choose its games if they become outdated, and they may choose to play games offered by its competitors if they offer better games or gameplay experience.

As a result, the Group's user base may not increase at the rate the Group anticipates or at all, which may, in turn, materially and adversely affect its business, results of operations, financial condition and prospects.

A substantial amount of the Group's revenue is derived from sales of in-game virtual items, and failure to monetise effectively through this item-based revenue model may adversely affect the Group's business.

A majority of the Group's games are free to download and play, adopting an item-based revenue model. A relatively small fraction of users who play the Group's games within a certain period become paying users, which is consistent with the industry norms. The Group's sustainable revenue growth, therefore, depends in part on the Group's ability to effectively encourage more gamers to make or increase their in-game virtual item purchases. Spending in the Group's games is discretionary and gamers can be sensitive to price. The Group puts great effort into marketing and

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pricing in-game virtual items to optimise user monetisation, which may not be as effective as expected. The Group might also fail to identify and introduce new and popular virtual items and price them appropriately.

In addition, this item-based revenue model may cease to be commercially viable. There can be no assurance that gamers will continue to accept this model. New revenue models may emerge given the rapidly evolving game industry and competitive landscape, which may force the Group's transition into such new models and the Group may experience difficulties in effectively adjusting to such new models. As a result, the Group's business, results of operations, financial condition and prospects may be materially and adversely affected.

The Group derived a substantial amount of revenue from a small number of popular games and a small group of high-spending gamers during the years ended 31 December 2018, 2019 and 2020.

The Group derived a significant amount of revenue from a small number of popular games in 2018, 2019 and 2020. The Group's revenue from the its top-five online games in terms of game operating revenue accounted for 75.6%, 77.1% and 67.3% for the years ended 31 December 2018, 2019 and 2020, respectively. In addition, the Group also faces concentration risk relating to certain of the Group's games. There is no guarantee that the Group will not lose those high-spending gamers or such gamers will maintain the same spending habit in Ragnarok M or other popular games in the future. If any of the foregoing happens, the Group's revenue from Ragnarok M or other popular games may decrease accordingly.

The Group expects its existing popular games to continue to contribute to a substantial portion of its revenue in the foreseeable future. However, the Group's top games may have a finite lifespan and may fall out of favour with gamers. There can be no assurance that the Group's efforts in enhancing existing popular games will sustain their current level of popularity and extend their life cycles, and any such decline may materially and adversely affect the Group's business and results of operations.

The PRC laws regulating the playing time of online games and the age of users playing them

may adversely affect the Group's business and operations.

In 2007, eight PRC government authorities, including the National Administration of Press and Publication (國家新聞出版總署) ("NAPP"), the Ministry of Education and the MIIT, jointly issued a notice requiring all Chinese online game operators to adopt an "anti-addiction compliance system" in an effort to curb addiction to online games by minors ("Anti-addictionNotice")《關於保護未成年人身心健康實施網路遊戲防沉迷系統的通知》. Under the anti-addiction compliance system, three hours or less of continuous play is defined to be "healthy", three to five hours is defined to be "fatigue" and five hours or more is defined to be "unhealthy". Game operators, including the Group, are required to reduce the value of game benefits for minor players by half when those players reach the "fatigue" level, and to zero when they reach the "unhealthy" level. In

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July 2011, these government authorities further issued the Notice Regarding Commencement of Authentication of Real Names for Anti-addiction System on Online Games 《( 關於啓動網絡游戲防沉迷實名驗證工作的通知》), which provides, among other things, that the relevant authorities should strengthen how they implement their authentication process in relation to gamers' names in online games (but excluding mobile games), a process that allows game operators to identify which gamers are minors. In addition to the provisions of the foregoing notices, the NAPP did not require mobile games to be equipped with an anti-addiction compliance system in order to be approved in practice before the implementation of the New Anti-addiction Notice. As such, the Group believes that it is not compulsory to put in place an anti-addiction compliance system for mobile games before the implementation of the New Anti-addiction Notice (as defined below), and therefore have not implemented such a system in all of the Group's mobile games. However, there can be no assurance that the government authorities in the PRC will not subsequently take a view contrary to the Group's understanding, that the Group's current anti-addiction compliance system is insufficient, or that the NAPP's approval may be required in order to implement anti-addiction compliance systems in the future, and that failure to do so may materially and adversely affect the Group's business. Furthermore, failure to comply with the Anti-addiction Notice requirements may subject the Group to a number of penalties, including but not limited to suspension of its online games operations, revocation of its operations' licences and approvals, rejection or suspension of its applications for approvals or licences, or for filings for any new game, or prohibition from operating any new game.

On 30 August 2018, eight PRC government authorities at national government level, including the NAPP and the Ministry of Education, released the Implementation Program. As a part of the plan to prevent myopia among children, the Implementation Program plans to regulate the number of new online games and restrict the amount of time juveniles spend playing on electronic devices. As at the date of this Offering Circular, no implementation rule has been issued to regulate the number of new online games, and it is impracticable to forecast the expected quota on the number of online games approved for publication annually in the future. Although it is unclear when and how the Implementation Program on regulating the number of new online games will be enforced, the risk exists that its enforcement could impact the Group's ability to launch and publish new games going forward, and require the Group to spend more time and costs in preparing and receiving the approvals necessary to launch its games.

On 25 October 2019, NAPP issued the New Anti-addiction Notice which mainly stipulates that: (i) the real-name registration system shall be implemented; (ii) the time slot and duration for playing online games by minors shall be subject to strict control; (iii) the provision of paid services to minors shall be regulated; (iv) the regulation of the industry shall be enhanced; and (v) the development and implementation of appropriate age-reminding system shall be explored. Although the Group has implemented real-name registration systems in all of its web games and mobile games since October 2017, not all of the Group's mobile game users from China have registered in its account system using their Chinese identification information. The Group's IT system keeps a record of those users who registered with the Group using their Chinese identification information, who are under 18 years of age and who have made top-up payments.

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However, as the Group's IT system record of registered users with Chinese identification information does not capture all the Group's Chinese users, the contribution of users under 18 years of age to the Group's financial results may be more significant than the Group's IT system has recorded. Furthermore, the implementation of the New Anti-addiction Notice may lead to a decrease in the number of minors in the Group's user base and the play time of minor users, thereby leading to a decrease in the minor users' revenue contribution to the Group's online game business, and therefore may materially and adversely affect the Group's results of operations and prospects.

On 17 October 2020, the new Law of the PRC on the Protection of Minors 《( 中華人民共和國未成年人保護法》, "Minors Protection Law") has been released and will be effective on 1 June 2021. This new Minors Protection Law adopts a new section regarding network protection, requiring online game service providers to further implement authentication of minors gamers' names and to classify game products, give reminders for age appropriateness, and take technical measures to prevent minors from contacting inappropriate games or game functions. The new Minors Protection Law also provides that online game service providers shall not provide online game services to minors from 22:00 to 8:00 the next day. Failure to comply with the requirements under the new Minors Protection Law may subject the Group to penalties, including but not limited to penalties up to 10 times illegal gains, penalties to the person directly in charge, suspension of its operation of online games, revocation of the business license and other licences and approvals for its online game operations.

The performance of the Group's popular game, Ragnarok M, may be affected by other games

of the same genre with similar contents.

Ragnarok M was jointly developed by Gravity, Dream Network and the Group. It is the mobile version of Ragnarok Online, which was developed by Gravity. Dream Network, which was granted a licence by Gravity to develop and publish certain games based on Ragnarok Online in China, supplied the Group with the materials associated with Ragnarok Online such as characters, music and storylines and the Group is responsible for designing, developing and testing Ragnarok M. However, the intellectual property rights of Ragnarok Online granted to the Group by Dream Network during the game development process were not exclusive in China. If other game companies with better game development technologies, more abundant capital resources or more extensive distribution networks are granted the intellectual property rights of Ragnarok Online to develop and publish similar games that compete directly with Ragnarok M, especially those of the same game genre as Ragnarok M, the Group's user base may shrink and the level of user engagement may decrease, and consequently the Group's business, results of operations, financial condition and prospects may be materially and adversely affected.

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The Group faces challenges in expanding operations overseas that the Group may not be able

to successfully deal with, which may adversely affect the Group's business.

Expansion into overseas markets is important for the Group's growth. The Group plans to keep expanding its business globally. The Group faces risks associated with expanding into markets where it has limited or no experience or recognition. The Group may be unable to attract a sufficient number of users, fail to anticipate competitive conditions or face difficulties in operating effectively in these new markets. Due to the evolving and potentially conflicting regulatory environment in relation to the game industry, particularly mobile games, across the globe, the Group may be required to comply with more stringent compliance requirements in its principal overseas markets, such as South Korea, Taiwan, Hong Kong and Southeast Asia. Failure to timely comply with these requirements may adversely affect the Group's business overseas. The Group may become exposed to risks inherent in transacting business globally, including those relating to:

identifying appropriate overseas markets;
challenges caused by distance, language and cultural differences;
customising games and other offerings that appeal to the tastes and preferences of gamers in overseas markets;
competition from local game developers, publishers and operators with an existing market share in those markets and with a better understanding of user preferences;
protecting and enforcing the Group's intellectual properties;
the inability to extend the Group's proprietary brand, content or technology into new jurisdictions;
implementing alternative payment methods for in-game virtual items in a manner that complies with local laws and practices;
adapting to local business practices;
foreign exchange rate fluctuations;
lower levels of consumer spending and fewer growth opportunities compared with the Group's existing geographic markets;
credit risk and payment fraud; and
political, economic and social instability.

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The Group may have difficulty in adequately responding to the challenges and uncertainties it faces. In addition, as the Group expands further into new countries and regions, these risks could intensify. One or more of these factors could adversely impact the Group's overseas operations. If the Group is unable to manage the risks and costs of its international expansion effectively, the Group's growth, results of operations, financial condition and prospects may be materially and adversely affected, and the Group's efforts to expand overseas may not succeed.

Any loss or deterioration of the Group's relationship with the Group's game developer partners may materially and adversely affect the Group's business and results of operations.

The Group works with game developers to publish and operate licensed games. The Group also offers online marketing services to them through TapTap. The Group has benefited from the strong brand recognition of some of these developers and the success of their games in China and overseas markets. The Group believes this is crucial to expanding its user base as well as enhancing its ability to operate and monetize its games. However, there can be no assurance that the Group would be able to maintain stable relationships with existing game developer partners. For example, any failure on the Group's part to help game developer partners effectively localise, operate or monetise games developed by them would adversely affect the Group's relationship with them and further affect the Group's business and results of operations.

The Group's game licensing agreements typically have an initial term of two to five years, renewable upon satisfaction of certain conditions. The Group's game developer partners may terminate agreements with the Group prior to expiration or they may refuse to renew such agreements. Even if they are willing to renew the agreements, they may demand terms less commercially favourable to the Group than the existing agreements. They may choose to partner with the Group's competitors, allowing the Group's competitors to enhance their game portfolios and effectively compete against the Group. They may also fail to perform their obligations under the licence agreements, and parties may fail to reach timely agreement on the version of game products to be published and the publication plan, which may cause delays to the Group's game launch schedule.

The Group provides online marketing services through TapTap. If the Group's pricing mechanism or distribution performance fails to meet the Group's game developer partners' expectation, they may switch to other distribution platforms or seek to co-operate with other distribution platforms. In addition, as the Group continually enhances its in-house game development capabilities, the Group's game developer partners may regard the Group as a competitor, which may therefore adversely impact the Group's relationship with them. Any loss or deterioration of the Group's relationship with any of the Group's game developer partners may result in a loss to the Group's revenue and, in turn, materially and adversely affect the Group's business and results of operations.

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Increment in research and development efforts may adversely affect the Group's profitability.

On 26 February 2021, the Company published a profit warning based on an initial assessment of the unaudited consolidated management accounts of the Group. In addition, the Group recorded a 89.1% decrease in its net profit for the year ended 31 December 2020 as compared with the year ended 31 December 2019. Such decrease in net profit is primarily a result of a significant increase in the Group's research and development expenses for the year ended 31 December 2020 as the Group continued to enhance its game development capabilities and TapTap's user experience. Given the Group has a number of games that are still under development or are expected to launch in the upcoming years, there can be no assurance that the Group's increment in research and development expenses which contributed to the decrease in net profit will not adversely affect the Group's profitability in the next few years.

Failure to maintain relationships with third-party channels that distribute the Group's games

may materially and adversely affect the Group's business.

Apart from the Group's own distribution platforms, which include www.xd.com and TapTap, the Group publishes its games through third-party distribution platforms, such as App Store and Google Play. The Group relies on these third parties to promote its games, record gross billings, process payments from gamers and, in some instances, maintain the security of their channels and provide certain user services. These third-party distribution platforms may have a strong bargaining power when dealing with game developers and publishers, including the Group, and subject the Group to their standard service terms and conditions for the promotion and distribution of its games. The Group's business and results of operations may be adversely affected if these third-party distribution platforms fail to effectively promote the Group's games or otherwise do not fulfil their obligations to the Group, or if they lack the relevant government licences to distribute the Group's games. If the Group's collaboration with an existing third-party distribution platform terminates, the Group may not be able to find a replacement in a timely manner and the distribution of the Group's games may be adversely affected. Any failure on the Group's part to maintain good relationships with a sufficient number of popular distribution platforms could cause the number of downloads and active users of the Group's games to decrease, which may have a material adverse effect on the Group's business, results of operations and financial condition.

Hacking activities may adversely affect the Group's reputation and business.

The Group primarily relies on proprietary encryption and authentication technology to provide the security and authentication necessary to enable the secure transmission of confidential user information, including username and password. However, the Group's security controls over user and game data may not prevent the improper disclosure of personally identifiable information. A party using hacking technology who is able to circumvent these security measures could misappropriate proprietary information or cause interruptions in the Group's operations. Any

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system failure or security breach or lapse that results in the mishandling of user data could harm the Group's reputation and brand and, consequently, the Group's business, in addition to exposing the Group to potential legal liability.

In addition, game operators also face problems arising from the use of unauthorised character enhancements, theft of user account information and other hacking or cheating activities. The Group may from time to time encounter such activities, and have implemented measures in the Group's games to detect, identify and resolve such issues. However, these measures may not be effective, and the continued occurrences of such activities in the Group's games may harm user experience and adversely affect the image of the Group's games and gamers' perception of game reliability, drive away gamers and reduce in-game spending, shorten the lifespan of games, and adversely affect the Group's results of operations.

The Group's failure to timely obtain preapproval for publication of online games from the

NAPP before game launch may adversely affect the Group's game pipelines.

Publishing and monetizing mobile games in China is subject to preapproval by the NAPP. Accordingly, mobile games with in-game virtual items, which the Group intends to publish, are subject to preapproval by the NAPP. If the Group fails to obtain preapprovals from the NAPP, none of them can be successfully launched in China as scheduled, which may adversely affect the Group's game pipeline. Going forward, if any online games with in-game virtual items published or to be published by the Group fails to complete such preapproval in time, or at all, these games may not be allowed to be released or may be ordered to be suspended or cease operation, and, as a result, the Group's business and results of operations may be materially and adversely affected.

If the Group fails to renew the Internet Publishing Service License 《( 網路出版服務許可證》), the Group's business regarding online games operation and distribution may be materially and adversely affected.

The Internet Publishing Service License 《( 網路出版服務許可證》) held by X.D. Network expired on 23 November 2020. The NAPP has confirmed that it received the renewal application documents forwarded by the Shanghai Municipal Press and Publication Bureau on 21 December 2020 and that the licensing application has passed the pro forma examination and been accepted. If the Group fails to pass the substantive review, the Group will not be able to obtain a legal and valid title to engage in online game operation and distribution in PRC, which may materially and adversely affect the Group's business thereof.

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If the Group fails to maintain and grow TapTap's level of popularity and user base, the

Group's business and results of operations may be materially and adversely affected.

The Group operates TapTap to provide a comprehensive suite of contents and services to serve the needs of game developers and gamers such as game distribution, game discovery and social networking and community functions. See "Description of the Group - TapTap." The Group relies on TapTap's sufficient level of popularity and its size of user base to attract game developers and publishers to use its online marketing services.

To maintain and grow TapTap's user base, the Group needs to continue to popularise TapTap with quality mobile game content and enhance user engagement. Accordingly, the Group has invested in, and expects to continue to invest in, the development and promotion of TapTap. However, there can be no assurance that the Group's investment and development strategy for TapTap will succeed, as the content offered through TapTap by the Group and gamers may not successfully stimulate the interests of other gamers and attract them to TapTap. In addition, the Group's competitors may develop and promote more attractive game communities and platforms that divert the Group's existing and new users away. If TapTap loses its popularity, the Group's user base may suffer as a result. Accordingly, developers may not choose TapTap for online marketing services, and the Group's business and results of operations may be adversely affected.

Furthermore, only the Android version of TapTap's mobile app currently offers the game download function. Any changes in the Android system's policy may affect TapTap's game distribution services, which may, in turn, have a material adverse effect on the Group's business, results of operations and financial condition.

The Group's business is subject to third-party-paymentprocessing-related risks.

The Group makes available a variety of mobile payment solutions to gamers, including payment via internet banking and mobile banking as well as through third-party partners, such as WeChat Pay and Alipay, to facilitate in-game purchases of virtual items. The Group relies on payment channel partners to provide payment processing services to gamers, which may subject the Group to payment collection issues beyond its control, or even fraud and other illegal activities in connection with these payment methods. Any interruption in the ability of gamers to use these payment channels could adversely affect the Group's payment collection and, in turn, the Group's revenue.

The Group's payment channel partners are entitled to a prescribed percentage of the gross billings charged to gamers. If they fail to remit to the Group the proceeds collected from gamers in a timely fashion or at all, or if they become unwilling or unable to provide payment services or if their service quality deteriorates, the Group's business may be disrupted.

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The Group's payment channel partners are also subject to evolving rules and regulations, regulatory or otherwise, governing electronic funds transfers, which could become difficult or impossible for them to comply with. As a result, they may be subject to fines or higher transaction fees or lose their ability to accept credit and debit card payments when processing electronic funds transfers or facilitating other types of online payments from gamers, all of which may adversely affect the Group's payment collection and monetisation, and, in turn, the Group's results of operations and financial condition.

The Group also relies on the stability of payment transmissions by payment channel partners to ensure that uninterrupted payment services are available to gamers. The Group does not have control over the security measures of third-party payment channels. If any of them fails to process, or ensure the security of, user payments for any reason, the Group's reputation may suffer, and the Group may lose paying users and potential purchases, which, in turn, may materially and adversely affect the Group's business, results of operations, financial condition and prospects.

If the Group is unable to compete effectively, the Group's business and results of operations

may suffer.

The Group faces competition in several major aspects of its business, particularly from companies that publish and operate mobile games. The Group's competitors may have substantially more financial, technical and other resources, and longer operating histories, as well as broader game offerings and a larger market share. The Group may be unable to compete successfully against such competitors or new market entrants, which may adversely affect the Group's business and results of operations.

The mobile game industry in China is highly competitive, which is characterized by the frequent introduction of new products and services, short product life cycles, evolving industry standards, and rapid adoption of technological and product advancements, as well as price sensitivity on the part of gamers. In addition, the Group's mobile game business faces competition from other entertainment formats and mobile apps and content, such as television, movies, music, electronic books, sports, social network services, and other recreational options on the internet. If the Group is not able to compete effectively, the Group's user base may shrink and the level of user engagement may decrease, which could lead to a decrease in the number of the Group's paying users and make the Group less attractive to game developers and other business partners. As a result, the Group's market share may decrease, and the Group's results of operations may be materially and adversely affected.

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Any failure or significant interruption in the Group's technology infrastructure could impact

the Group's operations and harm the Group's business.

The Group's technology infrastructure is critical to the performance of the Group's games and to gamer satisfaction. If a particular game is unavailable when gamers attempt to access it, they may stop playing that game or become unlikely to return to the game as often, if at all. Accordingly, failure or significant interruption in the Group's technology infrastructure would harm the Group's reputation and operations.

Some elements of the Group's technology infrastructure is maintained by third parties and is therefore beyond the Group's control. For example, the Group has leased a number of physical servers hosted by data server providers in Beijing, and the Group also works with cloud server service providers for cloud computing, data storage and bandwidth services. The Group may experience website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. The Group's growing operations are likely to place increasing pressure on the Group's servers and network capacity as the Group launches more games and further expands its user base. The Group's infrastructure is also vulnerable to damage from fires, floods, earthquakes, power loss, and telecommunication failures. To the extent that the Group's disaster recovery systems are not adequate, or the Group does not address issues such as capacity constraints effectively, upgrade the Group's systems as needed and continually develop the Group's technology infrastructure to accommodate increasing traffic, the Group's business and results of operations may suffer.

Undetected programming errors or defects in the Group's games could harm the Group's

reputation and materially and adversely affect the Group's business.

The Group's mobile games are subject to frequent improvement and updates and may contain bugs or flaws that may become apparent only after the updated apps are accessed by gamers. From time to time, gamers may inform the Group of programming bugs or flaws affecting their experience, which the Group may not be able to resolve in a timely manner. As a result, the Group may lose gamers, and the Group's reputation and market acceptance of the Group's games may also suffer, therefore adversely affecting the Group's business.

Gamers may violate the Group's game policies which may harm gameplay experience and

affect the Group's business.

The Group has established game policies against unauthorised and inappropriate user behaviour. For example, the Group does not allow gamers to sell or transfer virtual items. Virtual items offered in the Group's games have no monetary value outside of its games. Nonetheless, some of the Group's users or third parties sell or purchase the Group's virtual items through unauthorised third parties in exchange for real money or other real-world assets. The Group generates no revenue from these unauthorised transactions and does not permit, or facilitate, these unauthorised transactions. Notwithstanding the Group's measures and efforts to deter such

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behaviour, the Group does not have effective controls over these unauthorised transactions. Any such unauthorised purchase and sale could impede the Group's revenue and profit growth by reducing revenue from authorised transactions, creating downward pressure on the prices the Group charges for its virtual items, and increasing the Group's costs associated with developing technological measures to curtail unauthorised transactions and responding to dissatisfied gamers.

The Group may not be successful in promoting the Group's brand or enhancing brand

recognition, and negative publicity may harm the Group's business.

The reputation of the Group as a quality game publisher and game community, through its promotion of such brands as X.D. Network, X.D. Global and TapTap, is growing among gamers in China and overseas. However, the Group may not be able to effectively promote its brand or enhance brand recognition. In addition, negative publicity or disputes regarding the Group's brands, games and services, company or management could materially and adversely affect public perception of the Group and the games and services it offers, regardless of their veracity, which may, in turn, adversely affect the Group's business and prospects.

Unauthorised use of the Group's intellectual properties may harm the Group's brand and

reputation and adversely affect the Group's business.

The Group regards the intellectual property rights granted to it by the Group's game developer partners, as well as the Group's own copyrights, trademarks and other intellectual properties, as critical to its success. Unauthorised use of these intellectual properties may harm the Group's brand and reputation and adversely affect the Group's business. The Group has historically relied on a combination of trademark and copyright laws, trade secret protection, restrictions on disclosure and other agreements of similar functions to protect the Group's intellectual properties.

Although the Group's contracts with the Group's business partners prohibit the unauthorised use of the Group's brands and intellectual properties, there can be no assurance that they will comply with these terms. These agreements may not effectively prevent the disclosure of confidential information and may not provide an adequate remedy in the event of unauthorised disclosure of confidential information. In addition, although the Group currently enters into confidentiality and non-compete agreements or similar provisions with the Group's employees and imposes stringent obligations on the Group's core research and development employees with respect to confidentiality, there can be no assurance that such confidentiality or non-compete agreements or provisions will not be breached, that the Group will have adequate remedies for any breach, or that the Group's proprietary technology, know-how or other intellectual properties will not otherwise become known to, or be independently developed by, third parties.

In addition, the Group's failure to protect its game developer partners' intellectual properties granted to it will also subject it to severe consequences, including loss of game distributorships and payment of indemnity. Moreover, litigation may be necessary in the future to enforce the

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Group's intellectual property rights, which could result in substantial costs and diversion of the Group's management attention and resources, therefore disrupting the Group's business and having a material adverse effect on the Group's business and results of operations.

Third parties may claim that the Group infringes their proprietary rights, which may

adversely affect the Group's business.

The Group may from time to time receive claims that the Group infringes the intellectual property rights of others. Although the Group is not the game developer for games that it licenses, third parties may claim that, as operator of the games, the Group shall also be liable for any infringement upon the third parties' rights, jointly, with the developer. The Group typically relies on its game developer partners' representations that their games do not infringe upon third parties' intellectual property rights in most cases and the Group requires indemnification should any such representations become inaccurate and it suffers damage as a result, including any damage resulting from third-party claims. However, games the Group licenses may from time to time infringe valid patents, trademarks, copyrights or other intellectual property rights held by third parties and indemnification may not be adequate in recovering its loss. Any such claim or litigation, with or without merit, could be costly and distract the Group's management from day-to-day operations. If the Group fails to successfully defend against such claim or does not prevail in such litigation, it could be required to modify, redesign or cease operating the games, pay monetary amounts as damages or enter into royalty or licensing arrangements with the valid intellectual property holders. Any royalty or licensing arrangements that the Group may seek in such circumstances may not be available to it on commercially reasonable terms or at all. Also, if the Group acquires technology licences from third parties, the Group's exposure to infringement actions may increase because the Group must rely upon these third parties to verify the origin and ownership of such technology. This exposure to liability could result in disruptions in the Group's business that could materially and adversely affect the Group's results of operations.

Some of the Group's employees were previously employed at other companies, including the Group's competitors. The Group may hire additional personnel to expand its development team and technical support team as its business grows. To the extent these employees were involved in the development of content or technology similar to the Group's at their former employers, the Group may become subject to claims that these employees or the Group has appropriated these employees' former employers' proprietary information or intellectual properties. If the Group fails to successfully defend such claims against itself, the Group may be exposed to liabilities which could have a material adverse effect on the Group's business.

The Group's data analytics may be inaccurate and affect the Group's ability to adopt

appropriate business strategies.

The Group relies on the Group's data analytics capabilities to continue developing and operating games and TapTap, improve user experience, and optimise user monetisation. The Group's game operation team routinely collects and stores in-game user behavioural data utilising

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the Group's data analysis engine. In addition, it is possible that the Group's data may be inaccurate due to technical errors, security breaches or hacking incidents, or the game operators may refuse to share any such data with the Group. Therefore, the Group might fail to gather or retain data timely, or ensure the quality of data, which would yield inaccurate or misleading analytical results. Furthermore, there is an inherent limitation in statistical inferences that rely on the faulty premise that past behaviour predicts future behaviour.

The Group assesses its business performance by utilising a set of key performance indicators, such as MAUs, MPUs and ARPPU. While data analytics have proven beneficial to the Group's business, the Group might make poor operational and strategic decisions, which may materially and adversely affect the Group's business and prospects.

The Group's business generates and processes a large amount of data, and the improper use

or disclosure of such data may harm the Group's reputation and business.

The Group's business generates and processes a large quantity of personal, transaction, demographic and behavioural data. The Group faces risks inherent in handling large volumes of data and in protecting the security of such data, including those relating to:

protecting the data in and hosted on the Group's system, including against attacks on the Group's system by outside parties or fraudulent behaviour by the Group's employees;
addressing concerns related to privacy and sharing, safety, security and other factors; and
complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including any requests from regulatory and government authorities relating to such data.

The Group is subject to the laws and regulations of the PRC and other countries and regions relating to the collection, use, retention, security and transfer of personally identifiable information with respect to the Group's customers and employees. In many cases, these laws not only apply to third-party transactions, but may also restrict the cross-border transfers of personally identifiable information. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. These laws continue to develop and may vary from jurisdiction to jurisdiction. Complying with emerging and changing international requirements may cause the Group to incur substantial costs or require the Group to change its business practices. For example, the Group's games published in the United States makes the Group subject to the Children's Online Privacy Protection Act, or the COPPA, which regulates the collection of information online from children under the age of 13 and the Federal Trade Commission Act, which prohibits unfair or deceptive actions both online and offline and has been applied to data security and online privacy regulation. The Federal Trade Commission is an enforcer of failure to comply with privacy policies and other data protection laws and regulations and is also COPPA's

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primary enforcer. If the Group fails to accurately anticipate the application, interpretation or legislative expansion of COPPA, the Group could be subject to U.S. governmental enforcement actions, litigations and penalties or adverse publicity. In addition, if the Group plans to publish games in Europe in the future, the European General Data Protection Regulation, or the GDPR, took effect in May 2018 may apply to the Group's business in Europe. The GDPR imposes operational requirements on companies that receive or process the personal data of residents of the European Union that are different from those currently in place within the European Union. Failure to comply with the GDPR may result in substantial fines and other administrative penalties. The GDPR may increase the Group's responsibility and liability in relation to data protection and the Group may be required to put in place additional mechanisms ensuring compliance with the GDPR. This may be onerous and if the Group's efforts to comply with the GDPR or other applicable European Union laws and regulations are not successful, it could adversely affect the Group's business in the European Union. Any failure, or perceived failure, by the Group to comply with any privacy policies or regulatory requirements or privacy-protection-related laws, rules and regulations could result in proceedings or actions against the Group by government authorities or others. These proceedings or actions may subject the Group to significant penalties and result in negative publicity, require the Group to change its business practices, increase its costs and severely disrupt its business.

In addition, the secure transmission of confidential information, such as users' debit and credit card numbers and expiration dates, billing addresses and other personal information, over public networks, including the Group's websites, TapTap and games, is essential for maintaining user confidence. The Group does not have control over the security measures of its third-party payment channel partners, and their security measures may not be adequate. The Group could be exposed to litigation and possible liability if the Group fails to safeguard confidential user information, which could harm the Group's reputation and the Group's ability to attract or retain users, and may materially and adversely affect the Group's business.

The Group's business operations are heavily dependent on the performance and reliability of

the internet infrastructure and telecommunications networks in China.

The Group's game operation and distribution depends heavily on the performance and reliability of China's internet infrastructure. Almost all access to the internet is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT. In addition, the national networks in China are connected to the internet through international gateways controlled by the PRC government. These international gateways are the only channels through which a domestic gamer can connect to the internet. The Group may not have access to alternative networks in the event of disruptions, failures or other problems with the PRC's internet infrastructure.

The mobile network in China is mainly operated by three mobile carriers, all of which are controlled by the PRC government. Mobile coverage may not be reliable, and any disruption in the operation of the mobile carriers may have a negative impact on gamers' ability to download and

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activate the Group's games, as well as their gameplay and payment experience. There is no assurance that the PRC's mobile network infrastructure will continue to improve and further support the operation and expansion of the Group's business.

Any failure to maintain the satisfactory performance, reliability, security and availability of the Group's network and computer infrastructure may cause significant harm to the Group's business operations and the distribution of the Group's games. Any server interruptions, breakdowns or system failures, including failures which may be attributable to events within or outside the Group's control that could result in a sustained shutdown of all or a material portion of the Group's services, could adversely affect the Group's ability to operate its games and service gamers and lead to attrition and revenue reduction. The Group's network systems are also vulnerable to damage from computer viruses, fire, flood, earthquake, power outages, telecommunications failures, computer hacking and other similar events.

The Group's success depends on the continuing and collaborative efforts of the Group's

management team and other key personnel.

The Group's future success depends heavily upon the continuing services of the Group's senior management team and key personnel. If any of the Group's senior management or other key personnel, especially the Group's two founders including their chief executive officer, Mr. HUANG Yimeng, and its president Mr. DAI Yunjie, are unable or unwilling to continue in their present positions, the Group may not be able to replace them in a timely manner with suitable candidates, especially in light of the intense competition for talent in the game industry and the limited pool of qualified candidates. As a result, the Group's business may be disrupted, and the Group's results of operations and financial condition may be materially and adversely affected. If any member of the Group's management team or other key personnel joins a competitor or forms a competing company, the Group may lose customers, distributors, know-how, and key personnel. Some of the Group's key employees entered into an employment agreement with the Group that contains confidentiality and non-compete provisions. If a dispute arises between any of such key employees and the Group, there can be no assurance as to the extent any of these agreements may be enforced.

The Group is subject to risks relating to external investments.

During the years ended 31 December 2018, 2019 and 2020, the Group made minority investments in other companies, which are recorded as investments accounted for using the equity method and as long-term investments measured at fair value though profit or loss in the Group's financial statements. As of 31 December 2018, 2019 and 2020, the Group's investments accounted for using the equity method were RMB44.3 million, RMB52.8 million, and RMB66.3 million, respectively, and the Group's long-term investments measured at fair value though profit or loss were RMB33.7 million, RMB29.9 million and RMB23.7 million, respectively. The Group is subject to the risk that the companies in which the Group invests may make business, financial or management decisions with which the Group does not agree or in relation to which may involve

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the majority shareholders or the management of the companies taking risks or otherwise acting in a manner that does not serve the Group's interests. In particular, the Group's carrying value of its investments accounted for using the equity method may be affected by a number of factors such as share of results, impairment, dilution issuance of equity securities and currency translation differences.

The Group may in the future acquire intellectual properties, game distribution licences and quality games, and enter into strategic acquisitions or alliances with third parties. Such acquisitions could subject the Group to a number of risks, including risks associated with non-performance by the counterparty, and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect the Group's business. These transactions could require that the Group's management develop expertise in new areas, manage new business relationships and attract new types of gamers. The Group may also experience difficulties integrating any investments, acquisitions and/or partnerships into its existing business and operations, which would require significant attention from the Group's management and could result in a diversion of resources from the Group's existing business, which, in turn, could have an adverse effect on the Group's business operations. In addition, acquired assets or businesses may not generate the financial results the Group expects and could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortisation expenses for other intangible assets and exposure to the potential unknown liabilities of the acquired business.

The Group's intangible assets and goodwill may be subject to impairment.

As of 31 December 2020, the Group had intangible assets of RMB199.3 million. Pursuant to applicable accounting standards, intangible assets such as goodwill, that are not amortised are subject to assessment for impairment annually or more frequently if certain events or changes in circumstances indicate that such assets might be impaired. An impairment loss is recognized for the amount by which the assets' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. The impairment may be further affected by the assumptions made by the management. If any of these assumptions does not materialise, or if the performance of the Group's business is not consistent with such assumptions, the Group may be required to have a significant write-off of its intangible assets and record a significant impairment loss. Any significant impairment of intangible assets could have a material adverse effect on the Group's business, financial condition and results of operations.

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The determination of the fair value changes of certain of the Group's financial assets requires the use of estimates that are based on unobservable inputs, and therefore inherently involves a certain degree of uncertainty.

The Group uses significant unobservable inputs, such as expected volatility, discount for lack of marketability, expected rate of return and discount rate, in valuing the Group's financial assets at fair value through profit or loss. The fair value change of financial assets at fair value through profit or loss may significantly affect the Group's financial position and results of operations. Accordingly, such determination requires the Group to make significant estimates, which may be subject to material changes, and therefore inherently involves a certain degree of uncertainty. Factors beyond the Group's control can significantly influence and cause adverse changes to the estimates the Group uses and thereby affect the fair value of such assets and liabilities. These factors include, but are not limited to, general economic conditions, changes in market interest rates and stability of the capital markets. Any of these factors, as well as others, could cause the Group's estimates to vary from actual results, which could materially and adversely affect the Group's results of operations and financial condition.

There are uncertainties about the recoverability of the Group's deferred tax assets, which

could adversely affect the Group's results of operations.

The Group recorded deferred tax assets of RMB8.4 million, RMB11.3 million and RMB16.8 million, respectively, as of 31 December 2018, 2019 and 2020. For each reporting period, the Group evaluates its deferred tax assets to determine whether it is probable that they will be realised. In determining whether it is probable that the deferred tax assets will be realised, the Group assesses the likelihood that it will be able to recover its deferred tax assets using historical levels of income, estimates of future income, future reversal of existing taxable temporary differences, taxable income in carryback years and tax planning strategies. Such determination requires significant judgement from the Group's management on the tax treatment of certain transactions as well as assessment on the probability, timing and adequacy of future taxable profits for the deferred tax assets to be recovered. If such judgements turn out to be incorrect or imprecise, the Group may need to adjust its tax provisions accordingly. Furthermore, the Group cannot predict any future movements in its deferred tax assets and to what extent they may affect the Group's financial position in the future. Any of these events may have a material adverse effect on the Group's business, financial condition and results of operations.

The Group had a net decrease in cash and cash equivalents for a certain period during the

year ended 31 December 2018.

In 2018, the Group recorded a net decrease in cash and cash equivalents of RMB24.8 million. While the Group recorded a net increase in cash and cash equivalents of RMB1,065.8 million in 2020, there is no assurance that the Group will not experience negative net operating cash flow in the future. Negative net operating cash flow requires the Group to obtain sufficient external financing to meet the Group's financial needs and obligations. If the Group is unable to do so, it

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will be in default of its payment obligations and may not be able to implement its business strategies as planned. As a result, the Group's business, financial condition and results of operations may be materially and adversely affected.

The Group may be held liable for inappropriate online communications or content made by

the Group's users.

The Group's games and TapTap enable gamers to exchange information, generate and distribute content, and engage in various other online activities. The Group is unable to always verify gamers' identities or the sources of all information or content made by the Group's users despite the current measures implemented. Therefore, it is possible that certain gamers may engage in illegal, obscene or inflammatory conversations or activities, including the publishing of inappropriate or illegal content that may result in an adverse impact among the gamer community. In severe circumstances, such information or content may be deemed unlawful under applicable laws and regulations, and relevant government authorities may require the Group to discontinue or restrict certain features or services that would have led, or may lead, to such events. The Group may incur significant costs in investigating and defending themselves if the Group finds itself subject to penalties or claims or proceedings based on the nature or content of improperly displayed information, which may materially and adversely affect the Group's reputation, business and prospects.

Fluctuations in exchange rates could result in foreign currency exchange losses.

The Group generates revenue from overseas markets in relation to the Group's international business, and therefore, the Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and Hong Kong dollar. The Group also pays licensing fees for foreign game developers and intellectual property providers, which are primarily in U.S. dollars. During the years ended 31 December 2018, 2019 and 2020, the Group did not hedge against any foreign exchange risk. Fluctuations in exchange rates could therefore result in foreign currency exchange losses, which may have an adverse impact on the Group's results of operations and financial condition. Even if the Group were to hedge against such risk exposures, the availability and effectiveness of hedges may be limited, and the Group may not be able to hedge its exposure successfully, or at all.

The life cycle stages of the Group's games may not be indicative of their rate of growth.

Historically, most of the Group's mobile games experienced in their life cycles (i) the growth stage, during which the number of gamers and revenue generated by the game experience rapid growth; (ii) the maturity stage, during which revenue tends to be continuously generated by the game and the number of gamers generally remains stable during this stage; and (iii) the recession stage, during which the number of gamers and revenue generated by the game may decrease. In general, as the Group tests a new game's viability and builds up its user base during its growth stage, and gradually phases out an old game during the recession stage, the Group strives to

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maintain a game at the mature stage, during which the Group is able to generate steady revenue from its paying users. However, each game matures at a different pace depending on its popularity, and its progression through the three life cycle stages is neither guaranteed nor an indication of its rate of growth, or of the Group's ability to monetise that game. Accordingly, if the Group is unable to achieve a similar rate of growth for a majority of the Group's games, the Group may fail to monetise its users and generate revenue as anticipated, and the Group's results of operations, financial condition and profitability could be materially and adversely affected as a result.

The Group may have potential tax liabilities including new or additional taxes.

As of 31 December 2018, 2019 and 2020, 61.5%, 63.8% and 56.4%, respectively, of the Group's game operating revenue was generated from overseas markets. These overseas markets primarily included South Korea, Hong Kong, Taiwan and Southeast Asia. The international tax environment is evolving, with new policy proposals and regulations at various stages of implementation around the world, dealing with, among other things, the digitisation of the economy. In broad terms, many of these policy proposals and regulations, if implemented, potentially seek to impose new or different forms of taxation on either profits or revenue earned by highly digitised businesses from customers in jurisdictions where an entity does not have an operation, such as a permanent establishment. While these policy discussions are ongoing, it is possible that new tax regulations will be implemented in certain jurisdictions on a unilateral basis in the near future to require certain profits to be taxed in the jurisdictions where the Group has a market presence, including an online presence, through revised nexus and profit allocation rules. There are also proposals around the imposition of a global minimum taxation and measures to counter anti-base erosion payments. In addition, there are two further policy developments which may affect the Group's potential tax liabilities in the future: (i) the proposal by certain countries to introduce digital services taxes, or equivalent, which broadly seeks to tax the revenue of highly digitised businesses from activities relating to advertising or data; and (ii) the introduction of new VAT, goods and services tax, sales and use taxes, or similar indirect tax obligations on the provision of digital services to customers in the jurisdiction where the customer is located. The foregoing proposals may potentially lead to changes in the tax regulations of jurisdictions relevant to the Group's business, which may impose on its business tax liabilities including new or additional taxes and increase the Group's compliance costs, therefore materially and adversely affecting the Group's financial condition and results of operations.

The Group relies on assumptions and estimates to calculate certain key operating metrics, and inaccuracies in such metrics may harm the Group's reputation and adversely affect the Group's business.

In this Offering Circular, there are references to certain key operating metrics, such as MAU, DAU, MPU and ARPPU, which have been calculated using the Group's internal data. This data has not been independently verified by third parties. While these numbers are based on what the Group believes to be reasonable calculations for the applicable periods of measurement, there are inherent challenges in measuring usage and user engagement across the Group's large user base. In

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addition, the Group's key operating metrics are derived and calculated based on different assumptions and estimates, and you should be cautious of such assumptions and estimates when assessing the Group's operating performance.

The Group's measures of user growth and user engagement may differ from estimates published by third parties or from similarly titled metrics used by the Group's competitors due to differences in data availability, sources and methodology. If third parties do not perceive the Group's user metrics to be accurate representations of the Group's user base or user engagement, or if the Group discovers material inaccuracies in its user metrics, the Group's reputation may be harmed and third parties may be less willing to allocate their resources or spending to the Group, which could adversely affect the Group's business and results of operations.

The Group has limited insurance coverage which could expose the Group to significant costs

and business disruption.

The Group has not purchased any insurance to cover all of its assets, property and business. If the Group were to incur substantial losses or liabilities due to fires, explosions, floods, or other natural disasters, accidents or business interruptions, the Group's results of operations could be materially and adversely affected.

The Group is subject to credit risk primarily in relation to the Group's collection of its trade

receivables.

The Group's trade receivables for the years ended 31 December 2018, 2019 and 2020 were primarily due from distribution platforms and game publishers as well as from online marketing service customers. Depending on the credit history of the Group's customers and the Group's relationships with them, the Group typically offers a credit period of 30 to 120 days. For the Group's game operating business in particular, the Group generally offers a credit period of 30 to 90 days for third-party distribution platforms such as App Store, Google Play and other Android-based app stores, and of 90 to 120 days for game publishers. As of 31 December 2018, 2019 and 2020, the Group's trade receivables amounted to RMB449.1 million, RMB406.1 million and RMB299.2 million, respectively, of which RMB1.6 million, RMB3.5 million and RMB4.5 million, respectively, were impaired. The Group made such provisions for impairment based on expected credit loss. If the Group's strategic relationship with distribution platforms, game publishers and/or online marketing service customers is terminated or scaled back; or if distribution platforms, game publishers and/or online marketing service customers alter the co-operative arrangements, or if distribution platforms, game publishers and/or online marketing service customers experience financial difficulties in paying the Group, the Group's corresponding trade receivables might be adversely affected in terms of recoverability, which may adversely affect the Group's results of operations and financial position.

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The Group's results of operations are subject to seasonal fluctuations due to seasonality.

The Group experiences seasonality in its business and, as a result, comparing the Group's operating results on a period-to-period basis may not be meaningful. The Group typically experiences increased levels of in-game spending among paying users during holiday seasons in China, particularly during the Chinese New Year holiday. The Group also sometimes conducts marketing and promotional activities to capitalise on the increased user traffic during such periods, which may further stimulate spending in the Group's games. Accordingly, due to the seasonality of the Group's business, the results of any period of a fiscal year are not necessarily indicative of the results that may be achieved for the full fiscal year or for the corresponding period of any subsequent fiscal year.

The Group's interests in leased property may be defective and the Group's right to lease the properties affected by such defects may be challenged, which could cause disruption to the Group's business.

As at 31 December 2020, with respect to one the Group's leased properties, the relevant lessor had not provided the Group with valid written consent to sublease issued by the legal owner. Such leased property was used as office premises. The absence of the legal owner's consent to sublease limited the Group's ability to determine whether the lessor has the right to lease the properties to the Group and, if the lessor has not been duly authorised to sublease by the legal owner, the relevant lease agreement may be deemed invalid and, as a result, the Group may face challenges from the legal owners of the properties, and may be forced to vacate the relevant property and seek alternative office premises. The Group might incur additional expenses during the process.

As at 31 December 2020, with respect to 20 of the Group's leased properties used as office premises, the property ownership certificates thereof show that their corresponding land use is for industrial purposes. Such leased properties may be determined as "using the state-owned land out of the approved purposes" under the PRC Land Administration Law. There is a possibility that the competent authority may order the return of the relevant land and as a result, the relevant lease agreements may be deemed invalid and the Group may be forced to vacate the relevant property and seek another office premise. The Group might incur additional expenses during the process.

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RISKS RELATED TO THE GROUP'S CONTRACTUAL ARRANGEMENTS

The Group conducted certain aspects of the Group's businesses in the PRC through X.D. Network, or through the Group's PRC Consolidated Affiliated Entities by means of contractual arrangements. If the PRC government determines that these contractual arrangements do not comply with applicable regulations, the Group's business could be materially and adversely affected.

The Group conducts the operation of its business in China mainly through X.D. Network, or through the Group's PRC Consolidated Affiliated Entities. The Group receives substantially all of the economic benefits of the Group's PRC Consolidated Affiliated Entities as their primary beneficiary through contractual arrangements with them and their shareholders. For a description of these contractual arrangements, see "Description of the Group - Contractual Arrangements".

Various regulations in China currently restrict or prevent foreign-invested entities from engaging in telecommunication services, including operating mobile games. On 11 December 2001, the State Council promulgated the Provisions on Administration of Foreign Invested Telecommunications Enterprises 《( 外商投資電信企業管理規定》), which were subsequently amended on 10 September 2008 and on 6 February 2016, respectively. Under such regulations, foreign ownership in companies that provide value-added telecommunication services shall not exceed 50%. Under the Negative List, foreign investment in the value-added telecommunications services (excluding e-commerce) is "restricted". Further, the Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business 《( 信息產業部關於加强外商投資經營增值電信業務管理的通知》 (the "MIT Notice"), issued by the Ministry of Information Industry of the PRC (the "MII", which is the predecessor of the MIIT) in July 2006, reiterates restrictions on foreign investment in telecommunications businesses. Under the MIT Notice, a PRC company that holds a licence to conduct value-added telecommunications businesses, or a VATS Licence, in the PRC is prohibited from leasing, transferring or selling the licence to foreign investors in any form and from providing any assistance, including providing resources, sites or facilities, to foreign investors to conduct value-added telecommunications businesses illegally in the PRC. Furthermore, the relevant trademarks and domain names that are used in a value-added telecommunications business must be owned by the local VATS Licence holder or its shareholder(s). The MIT Notice further requires each VATS Licence holder to have appropriate facilities for its approved business operations and to maintain such facilities in the regions covered by its licence. In addition, all value-added telecommunications service providers are required to maintain network and information security in accordance with the standards set forth under relevant PRC regulations. X.D. Network and Yiwan each holds a VATS Licence. However, due to the lack of interpretative guidance from the authorities, it is uncertain whether the MIIT would consider the Group's corporate structures and contractual arrangements as a type of foreign investment in telecommunication services in the PRC. Therefore, it is unclear what impact the MIT Notice might have on the Group.

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In August 2011, the MOFCOM promulgated the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors 《( 商務部實施外國投資者併購境內企業安全審查制度的規定》), or the MOFCOM Security Review Rules, to implement the Notice of the General Office of the State Council on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors 《( 國務院辦公廳關於建立外國投資者併購境內企業安全審查制度的通知》), or Circular No. 6, which was promulgated on 3 February 2011 and came into effect on 5 March 2011. Under these rules, a security review by the MOFCOM is required for foreign investors' mergers and acquisitions that have "national defence and security" implications and mergers and acquisitions by which foreign investors may acquire "actual control" of domestic enterprises that have "national security" implications. The MOFCOM Security Review Rules further prohibit foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. There is no explicit provision or official interpretation stating that mobile game businesses fall within the scope of transactions subject to security review. The Group does not believe it is required to submit its existing contractual arrangement to the MOFCOM for a security review. However, as there is no clear statutory interpretation regarding the implementation of these rules, there is no assurance that the MOFCOM will have the same view of the Group when applying these national security review-relatedcirculars and rules.

The relevant PRC regulatory authorities have a broad discretion in determining whether a particular contractual structure violates PRC laws and regulations. Although, the Group believes it complies, and will continue to comply with current PRC regulations, the PRC government may not agree that these contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing requirements or policies or with requirements or policies that may be adopted in the future. It is possible that a PRC court, arbitration tribunal or other regulatory authority may determine that such contractual arrangements are illegal or invalid. If the PRC government determines that the Group is not in compliance with applicable laws, it may levy fines on it, confiscate the Group's income if it deems it to have been obtained through illegal operations, revoke or refuse to renew any business and operating licences required to conduct the Group's operations in the PRC, revoke the agreements constituting the contractual arrangements, require the Group to discontinue or restrict its operations, suspend the operation of its games, require it to alter its ownership structure or operations, or impose additional conditions or restrictions on the Group's business operations with which the Group may not be able to comply, or take other regulatory or enforcement actions against the Group that could be harmful to the Group's business.

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If the PRC government determines that the Group's ownership structure does not comply with the restrictions contained in the NAPP Notice, the Group could be subject to severe penalties.

The Group is subject to relevant PRC regulations on operators of online games. On 28 September 2009, the NAPP, together with the National Copyright Administration, and the National Working Group for Crackdown on Pornography and Illegal Publications, jointly issued a Circular on Implementation of the Regulation on the Three Provisions of the State Council and the Relevant Interpretations and Further Strengthening of the Administration of Pre-examination and Approval of Online Games and the Examination and Approval of Imported Online Games 《( 關於

貫徹落實國務院<「三定」規定>和中央編辦有關解釋，進一步加強網絡游戲前置審批和進口網絡游戲審批管理的通知》), or the NAPP Notice. The NAPP Notice provides, among other things, that foreign investors are not permitted to invest in online game operating businesses in the PRC via wholly-owned,equity joint venture or cooperative joint venture investments, and expressly prohibits foreign investors from gaining control over or participating in PRC Consolidated Affiliated Entities' online game operations through indirect routes, such as establishing other joint venture companies, entering into contractual arrangements with or providing technical support for such operating companies, or through a disguised form, such as incorporating user registration, user account management or payment through game cards into online gaming platforms that are ultimately controlled or owned by foreign investors. Due to the ambiguity of various regulations on online games and a lack of interpretative materials from the relevant PRC authorities governing online game operations, there are uncertainties regarding whether PRC authorities would consider the Group's corporate structure and contractual arrangements to be foreign investment in online game business. While the Group is not aware of any online game companies which use the same or similar contractual arrangements as the Group having been penalised or ordered to terminate operations by PRC authorities claiming that the contractual arrangements constitute control over, or participation in the operation of, online game operating businesses through indirect means, it is unclear whether and how the various regulations of the PRC authorities might be interpreted or implemented in the future. If the Group's contractual arrangements were deemed to be such an "indirect means" or "disguised form" under the NAPP Notice, the Group's contractual arrangements may be challenged by the competent press and publication authority. If the Group and its PRC Consolidated Affiliated Entities are found to be in violation of the NAPP Notice in operating the Group's mobile games, the competent press and publication authority, in conjunction with relevant regulatory authorities, would have the power to investigate and deal with such violations, including, in the most serious cases, by suspending or revoking relevant licences and registrations.

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The Group's Contractual Arrangements with X.D. Network and its shareholders may not be as effective in providing control as direct ownership. X.D. Network and its shareholders may fail to perform their obligations under these Contractual Arrangements.

The Group has relied on and expects to continue to rely on the Contractual Arrangements with X.D. Network to conduct the Group's domestic business primarily. For a description of the Contractual Arrangements, see "The Group's Contractual Arrangements". These Contractual Arrangements provide the Group with effective control over X.D. Network through which the Group operates its business and allows the Group to obtain economic benefits from it. However, the Contractual Arrangements may not be as effective in providing control as does direct ownership. For example, if X.D. Network or its shareholders fail to perform their respective obligations under the Contractual Arrangements, or if they take other actions that are detrimental to the Group's interests, the Group may incur substantial costs and use of resources in connection with the Group's enforcing these arrangements. To enforce these arrangements, the Group may rely on legal remedies available under applicable PRC laws, including seeking specific performance and claiming damages. In particular, if the shareholders of X.D. Network refuse to transfer their equity interests to the Group or its designated persons when the Group exercises the purchase option pursuant to the Contractual Arrangements, the Group may need to initiate legal actions to compel them to fulfil their contractual obligations. Such arbitration and legal proceedings and disputes may cause the Group to incur substantial costs and use of other resources and result in disruption to the Group's business; and the outcome might not be in the Group's favour. The relevant PRC arbitral panel may conclude that the Group's Contractual Arrangements violate PRC laws or are otherwise unenforceable and the Group could consequently lose the Group's ability to consolidate X.D. Network's results of operations, assets and liabilities in the Group's combined financial statements and/or to transfer the revenue of X.D. Network to WFOE, the Group's wholly-owned subsidiary. In addition, the shareholders of X.D. Network may not continuously act in the best interests of the Company and follow the Group's instructions despite their contractual obligations to do so.

If the Group had direct ownership of X.D. Network, the Group would be able to exercise its rights as shareholders, rather than its rights under the voting rights proxy agreement and powers of attorney, to effect changes to its board of directors, which in turn could implement changes at management and operational levels. However, under the current contractual arrangements, as a legal matter, if X.D. Network or its shareholders fail to perform their obligations under the Contractual Arrangements, the Group may incur substantial costs in enforcing such arrangements and in relying on legal remedies under PRC laws, which may not be sufficient or effective. For example, if the Group sought to enforce the exclusive option agreements for the transfer of equity interests in X.D. Network, the transfer would be subject to approval by governmental authorities, such as the MOFCOM, and the transfer price requirements of the relevant government authorities. The transferee would be required to comply with various requirements, including qualification and maximum foreign shareholding percentage requirements. As these governmental authorities have wide discretion in granting such approvals, the Group could fail to obtain such approval. In

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addition, the Group's Contractual Arrangements might not be enforceable in the PRC if its governmental authorities or courts took the view that such contracts contravened PRC laws or were otherwise not enforceable for public policy reasons.

All of the Contractual Arrangements are governed by PRC laws and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC laws, and any disputes would be resolved in accordance with PRC legal procedures. However, the legal system in the PRC is not as developed as in other jurisdictions, such as Hong Kong. There are very few precedents and little official guidance as to how contractual arrangements in the context of a variable interest entity should be interpreted or enforced under PRC laws. As a result, uncertainties in the PRC legal system could limit the Group's ability to enforce the Contractual Arrangements. If the Group is unable to enforce these contractual arrangements, the Group may not be able to exert effective control over its PRC Consolidated Affiliated Entities, and the Group's ability to conduct its business may be negatively affected.

If the Group is unable to enforce these contractual arrangements, or there are other obstacles in the process of enforcing these contractual arrangements, a substantial portion of the Group's business and operations in the PRC could be disrupted, which could materially and adversely affect the Group's results of operations and damage the Group's reputation. See "- Risks Related to Doing Business in the PRC - Uncertainties and changes in the PRC legal system could materially and adversely affect the Group's business".

The Group's ability to enforce the equity pledge agreements may be subject to limitations

based on PRC laws and regulations.

Under the Contractual Arrangements, WFOE entered into an equity pledge agreement with X.D. Network and its shareholders. Under the equity pledge agreement, the shareholders of X.D. Network agreed to pledge their equity interests in X.D. Network to WFOE to secure the X.D. Network and the shareholders' performance of their obligations under the relevant contractual arrangements.

The equity pledge agreements with the Group's PRC Consolidated Affiliated Entities' shareholders provide that the pledged equity interests constitute security for all of the payment obligations of the PRC Consolidated Affiliated Entities and the shareholders under the contractual arrangements. However, it is possible that a PRC court may take the position that the amount indicated on the equity pledge registration documents filed with the local branch of the SAIC represents the full debt amount that the pledge secures. If this is the case, the obligations that are supposed to be secured in these equity pledge agreements in excess of the amount indicated on the equity pledge registration documents could be determined by the PRC court as unsecured debt, in which case the protection of the Group's interest in the PRC Consolidated Affiliated Entities' payments to the Group is limited.

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The shareholders of X.D. Network have potential conflicts of interest with the Group, which

may adversely affect the Group's business.

The Group conducts a substantial portion of its operations, and generates a substantial portion of its revenue, through X.D. Network. The Group's control over X.D. Network is based upon the Contractual Arrangements. Certain shareholders of X.D. Network may potentially have a conflict of interest with the Group. Thus, conflicts of interest between their duties to the Company and their interests as the controlling shareholders of the Group's PRC Consolidated Affiliated Entities may arise. They may not act entirely in the Group's interest when conflicts of interest arise and conflicts of interest may not be resolved in the Group's favour. In addition, these Registered Shareholders could violate their non-compete or employment agreements with the Group or their legal duties by diverting business opportunities from the Group. If the Group is unable to resolve any such conflicts, or if the Group suffers significant delays or other obstacles as a result of such conflicts, the Group's business and operations could be severely disrupted, which could materially and adversely affect the Group's results of operations and reputation.

The shareholders of X.D. Network may be involved in personal disputes with third parties or other incidents that may have an adverse effect on their respective equity interests in X.D. Network and the validity or enforceability of the contractual arrangements. For example, in the event that any individual shareholder of X.D. Network divorces his or her spouse, the spouse may claim that the equity interest of X.D. Network held by such individual shareholder is part of their marital or community property. If such claim is supported by the competent PRC court, the relevant equity interest may be obtained by the individual shareholder's spouse or another third party who is not bound by the Group's contractual arrangements, which could result in the Group losing effective control over X.D. Network. Similarly, if any of the equity interests of X.D. Network are inherited by a third party on whom the current contractual arrangements are not binding, the Group could lose its control over X.D. Network or have to maintain such control at unpredictable cost, which could cause significant disruption to the Group's business and operations, and harm the Group's financial condition and results of operations.

Although, under the Group's current contractual arrangements, (i) the spouse of each of the individual shareholders of X.D. Network has executed a spousal undertaking, under which such spouse has undertaken that she or he will not make any assertions in connection with the equity interests of X.D. Network, which are held by the Registered Shareholders, and if such spouse obtains any equity interests of X.D. Network, for any reasons, she or he shall be bound by the contractual arrangements and comply with the obligations thereunder as a shareholder thereof, and

it is expressly provided in the agreements that the rights and obligations thereunder shall be equally effective and binding on the successors of the contracting parties, there can be no assurance that these undertakings and arrangements will be complied with or effectively enforced. If any of these undertakings or arrangements is breached or becomes unenforceable and leads to legal proceedings, it could disrupt the Group's business, distract management and subject the Group to substantial uncertainty as to the outcome of any such legal proceedings.

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The Group may lose the ability to use and enjoy the benefits of the assets held by X.D. Network that are important to the operations of the Group's business if such entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.

X.D. Network is the Group's primary operating entity. It holds assets and performs functions that are important to the operations of the Group's business. If X.D. Network enters into bankruptcy and all or part of X.D. Network's assets become subject to liens or rights of third-party creditors, the Group may be unable to continue some or all of its business activities, which could materially and adversely affect the Group's business, financial condition and results of operations. If X.D. Network undergoes a voluntary or involuntary dissolution or liquidation proceeding, third-party creditors may claim rights to some or all of these assets, thereby hindering the Group's ability to operate its business in the PRC, which may materially and adversely affect the Group's business, financial condition and results of operations.

Contractual arrangements with X.D. Network may result in adverse tax consequences.

Under PRC laws and regulations, an arrangement or transaction among related parties may be subject to audit or challenge by the PRC tax authorities. If this occurs, the PRC tax authorities could request that X.D. Network adjust its taxable income in the form of a transfer pricing adjustment for PRC tax purposes if contractual arrangements among related parties do not represent arm's-length prices. Such a pricing adjustment could adversely affect the Group by reducing, for PRC tax purposes, expense deductions recorded by X.D. Network, which could in turn increase its tax liabilities and expenses. In addition, X.D. Network may be subject to late payment fees and other penalties for underpayment of taxes. As a result, the Group's Contractual Arrangements with X.D. Network may result in adverse tax consequences to the Group. If X.D. Network generates net income from transactions with the Group's PRC subsidiaries under the contractual arrangements in the future and the PRC tax authorities decide to make transfer pricing adjustments on their net income, the Group's consolidated net income may be adversely affected. In addition, the PRC tax authorities may impose interest on late payments on X.D. Network for the adjusted but unpaid taxes.

If the Group exercises the option to acquire the equity ownership or assets of X.D. Network,

the ownership transfer may subject the Group to substantial costs.

By virtue of the Group's Contractual Arrangements, WFOE has the exclusive right to purchase all or any part of the equity interests in X.D. Network from its respective shareholders for a consideration of RMB1 or such minimum purchase price permitted under PRC laws and regulations or by the relevant governmental authorities. WFOE also has the exclusive right to purchase all or any part of the assets in X.D. Network at the minimum purchase price permitted under PRC laws and regulations or by the relevant governmental authorities. The respective shareholders shall return the amount of the purchase price they have received to WFOE. If such a transfer takes place, the competent tax authority may require WFOE to pay enterprise income tax

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for ownership transfer income with reference to the market value instead of the price as stipulated under the Group's Contractual Arrangements, in which case WFOE may be subject to a substantial amount of tax.

Substantial uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of the Group's current corporate structure, corporate governance and business operations.

On 15 March 2019, the Foreign Investment Law was formally passed by the thirteenth National People's Congress and will take effect on 1 January 2020. The Foreign Investment Law will replace the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Contractual Joint Ventures and the Law on Foreign Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate the contractual arrangements as a form of foreign investment.

As advised by the Group's PRC Legal Adviser, since (i) the Foreign Investment Law does not specify contractual arrangements as foreign investment; and (ii) after the promulgation of the Foreign Investment Law on 15 March 2019 and up to the date of this Offering Circular, no laws, administrative regulations or State Council provisions have been issued which specify contractual arrangements as a method of foreign investment, the Foreign Investment Law will not have a material impact on the Contractual Arrangements and each of the agreements under the Contractual Arrangements, and the legality and validity of the Contractual Arrangements would not be affected.

Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes "foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council". Therefore, there are possibilities that future laws, administrative regulations or provisions prescribed by the State Council may regard contractual arrangements as a form of foreign investment, in which case whether the Group's contractual arrangements will be recognised as foreign investment, whether the Group's contractual arrangements will be deemed to be in violation of the foreign investment access requirements, and how the above-mentioned contractual arrangements will be treated, are uncertain. Therefore, there is no guarantee that the contractual arrangements and the business of the Group's PRC Operating Entities will not be materially and adversely affected in the future.

In the extreme case scenario, the Group may be required to unwind the contractual arrangements and/or dispose of its PRC Consolidated Affiliated Entities, which could have a material and adverse effect on the Group's business, financial condition and results of operations. In the event that the Company no longer has a sustainable business after the aforementioned unwinding or disposal or when such requirements are not complied with, the Stock Exchange may take enforcement action against the Group which may have a material adverse effect on the trading of the Group's Shares or even result in the delisting of the Company.

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RISKS RELATED TO DOING BUSINESS IN THE PRC

The Group operates in a new and rapidly changing industry, which makes it difficult to evaluate the Group's business and prospects. The Group's ability to generate revenue could suffer if the PRC mobile game market does not develop as anticipated.

The growth of the mobile game industry in the PRC and the level of demand and market acceptance of the Group's games are subject to a high degree of uncertainty. The Group's future operating results depend on numerous factors affecting the mobile game industry, many of which are beyond the Group's control. The Group's ability to formulate and execute publishing, distribution and marketing strategies will be significantly affected by the Group's ability to anticipate and adapt to relatively rapid changes in the tastes and preferences of the Group's current and potential users. New and different types of entertainment may increase in popularity at the expense of mobile games. A decline in the popularity of mobile games in particular would harm the Group's business and prospects. As the PRC's mobile game market has evolved rapidly in recent years, it is extremely difficult to accurately predict user acceptance and demand for the Group's existing and potential new games, and the future size, composition and growth of this market. Given the limited history and rapidly evolving nature of the Group's market, the Group cannot predict how much users will be willing to pay for its mobile games or whether users will have concerns over security, reliability and cost as well as the quality of service associated with mobile games. If acceptance of the Group's mobile games is different from what was anticipated, the Group's ability to maintain or increase the Group's revenue and profits could be materially and adversely affected.

Concerns about the use of personal data in compliance with PRC laws could damage the Group's reputation and deter current and potential users from using the Group's services.

Pursuant to the applicable PRC laws and regulations concerning the use and sharing of personal data, the Group's PRC subsidiaries and Consolidated Affiliated Entities are required to keep the Group's users' personal information confidential and are prohibited from disclosing such information to any third parties without the consent of users. The Group applies strict management and protection to any information provided by users, and under the Group's privacy policy, without the Group's users' prior consent, the Group will not provide any of its users' personal information to any unrelated third party. New laws and regulations, such as The Decision of the Standing Committee of the PRC National People's Congress on Strengthening Network Information Protection 《( 全國人民代表大會常務委員會關於加強網絡信息保護的決定》), which was issued by the Standing Committee of the PRC National People's Congress on 28 December 2012, the Provisions on Protection of Personal Information of Telecommunication and Internet Users 《( 電信和互聯網用戶個人信息保護規定》), which was promulgated by the MIIT on 16 July 2013 and took effect on 1 September 2013, the Cybersecurity Law of the People's Republic of China 《( 中華人民共和國網絡安全法》), which was promulgated by the Standing Committee of the PRC National People's Congress on 7 November 2016 and took effect on 1 June 2017, and Method for Identifying the Illegal Collection and Use of Personal Information by Apps 《( 違法違規收集使用個

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人信息行為認定方法》), which was promulgated by the Ministry of Industry and Information Technology, the Ministry of Public Security, Cyberspace Administration of China, and State Administration for Market Regulation on 28 November 2019 and took effect on the same day, have further enhanced the legal protection of information security and privacy on the internet. Other relevant laws and regulations being drafted include the Data Security Law (Draft), Measures for the Administration of Data Security (Draft for comment), the Personal Information Protection Bill (Draft), and Measures for Security Assessment for Cross-border Transfer of Personal Information (Draft for Comment). The laws and regulations also require internet operators to take measures to ensure the confidentiality of users' information. While The Group strives to comply with its privacy guidelines as well as all applicable data protection laws and regulations, any failure or perceived failure to comply may result in proceedings or actions against the Group by government entities or others, and could damage the Group's reputation. User and regulatory attitudes towards privacy are evolving, and future regulatory or user concerns about the extent to which personal information is shared with merchants or others may adversely affect the Group's ability to share certain data with merchants, which may limit certain methods of targeted marketing. Concerns about the security of personal data could also lead to a decline in general internet usage, which could lead to lower user traffic on the Group's website. A significant reduction in user traffic could lead to lower revenue from paying users, which could have a material adverse effect on the Group's business, financial condition and results of operations.

Currently there is no law or regulation specifically governing virtual asset property rights and, therefore, it is unclear what liabilities, if any, mobile game operators may have for virtual assets.

One of the features of some of the Group's games that helps to build a large user base and maintain loyalty is that users can accumulate virtual tools, powers and rankings as they play the games. The Group believes that these virtual assets are highly valued by the Group's users, in particular long-termusers. However, on occasion, such assets can be lost if, for example, a user's identity is stolen by another user or the Group experiences a system error or crash. The PRC Supreme People's Court has announced two judicial interpretation documents regarding the general judicial protection of virtual assets, being Opinions of the Supreme People's Court and the National Development and Reform Commission on Providing Judicial Services and Supports to Accelerate Improvement of the Socialist Market Economy System in the New Era 《( 最高人民法院關於人民法院為海南自由貿易港建設提供司法服務和保障的意見》) in 2020 and Opinions of the Supreme People's Court on Judicial Services and Guarantees of the People's Courts for the Construction of Hainan Free Trade Port 《( 最高人民法院關於人民法院為海南自由貿易港建設提供司法服務和保障的意見》) in 2021. The PRC government has not yet enacted any specific laws regarding virtual property rights. Accordingly, the Group has no basis on which to determine what the legal rights are, if any, associated with virtual assets and what liabilities it could be exposed to for the loss or destruction of virtual assets. In the case of a loss of virtual assets, the Group may be sued by its users and held liable for damages, which may negatively affect the Group's

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reputation and business, financial condition and results of operations. The Group has not been involved in any virtual-assets-related law suits. However, there can be no assurance that such law suits will not be brought against the Group in the future.

Based on several judgments by PRC courts regarding the liabilities of game operators for loss of virtual assets by users, the courts have generally required the game operators to provide well-developed securities systems to protect such virtual assets owned by users and have required some game operators to return the virtual items or be liable for the loss and damage incurred therefrom if the online game operators have been determined to be in default or held liable for infringement of users' rights.

Regulation and censorship of information disseminated over the internet in the PRC may adversely affect the Group's business, and the Group may be liable for information displayed on, retrieved from or linked to the Group's games or platforms.

The PRC has enacted laws and regulations governing internet access and the distribution of news and other content, as well as products and services, through the internet. The PRC government prohibits information that it believes to be in violation of PRC laws from being distributed through the internet. In particular, the MIIT, the MOC and other competent government authorities have promulgated regulations that prohibit games from being distributed through the internet if the games contain content that is found to, among other things, propagate obscenity, gambling or violence, instigate crimes, undermine public morality or the cultural traditions of the PRC, or compromise state security or secrets. If any of the games the Group offers is deemed to violate any such content restrictions, the Group would not be able to obtain the necessary government approval to continue such offerings and/or could be subject to penalties, including confiscation of income, fines, suspension of business and revocation of the Group's licences for operating mobile games, any of which would materially and adversely affect the Group's business, financial condition, results of operations and prospects.

The Group may also be subject to potential liability for the actions or communications of the Group's users or for content the Group distributes that is deemed inappropriate. The Group may be required to delete content that violates PRC laws and report content that the Group suspects may violate PRC laws, which may harm the Group's reputation and reduce the Group's user base, the amount of time users can spend on the Group's games or TapTap, or the purchases of virtual items in the Group's games and other products. It may be difficult to determine the type of content that may result in liability for the Group and, if the Group is found to be liable, the Group may be prevented from operating its games or TapTap or offering other services in the PRC.

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Global economic, political and social conditions may continue to affect the Group's business.

The Group's performance has been and will continue to be affected by the PRC's economy, which, in turn, is influenced by the global economy. The uncertainties relating to the global economy as well as the political environment in various regions of the world will continue to impact the PRC's economic growth.

For example, the trade dispute between the PRC and the United States and the increased tariff that the United States plans to impose on Chinese imports may have a material and adverse effect on the PRC's economy as well as global economies, which may result in continuing uncertainty for the overall prospects for these economies. The lasting impacts any trade war may have on the PRC economy and the PRC trading industry remain uncertain. The reduced demand for exports produced in the PRC, reduced levels of foreign and domestic investment in the PRC and decreased consumer confidence may result in a slowdown in growth in the markets of the PRC.

In addition, the U.S. government has recently made statements and taken certain actions that may lead to changes to U.S. and international trade policies, including recently imposed tariffs affecting a range of products manufactured in China or threatening to sanction certain companies with connections to China. In response, the PRC government had on 9 January 2021, promulgated the Measures for Blocking Improper Extraterritorial Application of Foreign Laws and Measures 《( 阻斷外國法律與措施不當域外適用辦法》) to counteract the extra-territorial application of foreign laws to Chinese persons. It is unknown whether and to what extent new tariffs or counter-tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on the Group or the industries in which it operates. There is also a concern that the imposition of additional tariffs by the U.S. could result in the adoption of tariffs by other countries as well. Any unfavourable government policies on international trade, such as capital controls or tariffs, may affect the demand for the Group's products and services, or impact the competitive position of the Group's products. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on the Group's business, financial condition and results of operations.

Adverse changes in the economic and political policies of the PRC government could negatively impact the PRC's overall economic growth, which could materially and adversely affect the Group's business.

The Group's business, financial condition, results of operations and prospects depend significantly on economic developments in the PRC. The PRC's economy differs from the economies of most other countries in many respects, including the amount of government involvement in the economy, the general level of economic development, growth rates, and government control of foreign exchange and the allocation of resources. While the PRC economy has grown significantly over the past few decades, this growth has remained uneven across different periods, regions and economic sectors.

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The PRC government also exercises significant control over the PRC's economic growth by strategically allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Since late 2003, the PRC government has implemented a number of measures, such as increasing the PBOC's statutory deposit reserve ratio and imposing commercial bank lending guidelines, which have had the effect of slowing the growth of credit availability. In 2008 and 2009, however, in response to the global financial crisis, the PRC government loosened such requirements. Any actions and policies adopted by the PRC government or any prolonged slowdown in the PRC's economy, in particular the mobile apps industry, could have a negative impact on the Group's business, operating results and financial condition in a number of ways. For example, the Group's users may reduce spending on the Group's offerings, while the Group may have difficulty expanding the Group's user base quickly enough, or at all, to offset the impact of reduced spending by the Group's existing users.

Uncertainties and changes in the PRC legal system could materially and adversely affect the

Group's business.

The Group conducts its business primarily through the Group's PRC subsidiaries and affiliated entities in the PRC. The Group's operations in the PRC are governed by PRC laws and regulations. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general, and forms of foreign investment (including wholly foreign-owned enterprises and joint ventures) in particular. These laws, regulations and legal requirements, including those governing PRC tax matters, are relatively new and amended frequently, and their interpretation and enforcement often raise uncertainties that could limit the reliability of the legal protections available to the Group. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retrospective effect. As a result, the Group may not be aware of its violations of these policies and rules until the violations have occurred. Furthermore, the PRC administrative and court authorities have significant discretion in interpreting and implementing or enforcing statutory rules and contractual terms, and it may be more difficult to predict the outcome of administrative and court proceedings and the level of legal protection the Group may enjoy in the PRC versus other, more developed legal systems. These uncertainties may affect the Group's judgement on the relevance of legal requirements and the Group's decisions on the measures and actions to be taken to fully comply therewith, and may affect the Group's ability to enforce the Group's contractual or tort rights. Such uncertainties may result in substantial operating expenses and costs, and any litigation in the PRC may result in the diversion of resources and management's attention, and therefore materially and adversely affect the Group's business and results of operations. The Group cannot predict future developments in the PRC legal system. The Group may be required to procure additional permits, authorisations and approvals for

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its operations, which it may not be able to obtain. The Group's inability to obtain such permits or authorisations may materially and adversely affect the Group's business, financial condition and results of operations.

The PRC government extensively regulates the internet industry, including the foreign ownership of, and the licensing and permit requirements pertaining to, companies in the internet industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainty. With regard to the mobile game industry in the PRC, various regulatory authorities of the PRC central government, such as the State Council, the MIIT, the SAIC, the MCT, the NAPP, and the Ministry of Public Security, are empowered to promulgate and implement regulations governing various aspects of the internet and the mobile game industry. There exist inconsistencies and ambiguities in the regulations promulgated by different government authorities. The Group is required to obtain applicable permits or approvals from different regulatory authorities in order to provide mobile game services. As a result, it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.

Risks and uncertainties relating to PRC regulation of internet businesses include, but are not limited to, the following: (1) new laws, regulations or policies may be promulgated or announced that will regulate internet activities, including mobile game businesses. If these new laws, regulations or policies are promulgated, additional licences may be required for the Group's operations. If the Group's operations do not comply with these new regulations after they become effective, or if the Group fails to obtain any licences required under these new laws and regulations, the Group could be subject to penalties and the Group's business operations could be disrupted; (2) there are uncertainties relating to the regulation of the internet industry in the PRC, including evolving licensing requirements. This means that permits, licences or operations of some of the companies may be subject to challenge, or the Group may fail to obtain or renew permits or licences that applicable regulators may deem necessary for the Group's operations. If the Group fails to maintain or obtain the required permits or licences, the Group may be subject to various penalties, including fines and discontinuation of, or restriction on, the Group's operations. Any penalty may disrupt the Group's business operations and may have a material adverse effect on the Group's results of operations; and (3) the interpretation and application of existing or future PRC laws, regulations and policies relating to the internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, internet businesses in the PRC, including the Group's business. There can be no assurance that the Group will be able to maintain its existing licences or obtain any new licences required under any existing or new laws or regulations. There are also risks that the Group may be found to be in violation of existing or future laws and regulations given the uncertainty and complexity of the PRC's regulation of internet businesses. If current or future laws, rules or regulations regarding internet-related activities are interpreted in such a way as to render the Group's ownership structure and/or business operations illegal or non-compliant, the Group's business could be severely impaired and the Group could be subject to severe penalties.

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The Group may rely on dividends and other distributions from the Group's PRC subsidiaries to fund the Group's cash and financing requirements, and any limitation on the ability of the Group's subsidiaries to make payments to the Group could materially and adversely affect the Group's ability to conduct the Group's business.

As an offshore holding company, the Group may rely principally on dividends from the Group's PRC subsidiaries for the Group's cash requirements, dividends payments and other distributions to the Group's shareholders, and to service any debt that the Group may incur and pay the Group's operating expenses. The payment of dividends by entities organised in the PRC is subject to limitations. In particular, PRC regulations permit the Group's PRC subsidiaries to pay dividends only out of their accumulated after-tax profits, if any, as determined in accordance with Chinese accounting standards and regulations. In addition, each of the Group's PRC subsidiaries is required each year to set aside at least 10% of its annual after-tax profits (as determined under PRC accounting standards), if any, into its statutory reserve fund until the aggregate amount of that reserve reaches 50% of such entity's registered capital. These reserves are not distributable as cash dividends.

In addition, if any of the Group's PRC subsidiaries incurs debt on its own behalf, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to the Group. Any limitation on the ability of the Group's subsidiaries to distribute dividends or other payments to the Group could materially and adversely limit the Group's ability to grow, make investments or acquisitions, pay dividends and otherwise fund and conduct the Group's business.

The PRC regulations on loans to and direct investments in PRC entities by offshore holding companies may delay or prevent the Group from using the proceeds of any offering to make loans or capital contributions to the Group's PRC subsidiaries, which could materially and adversely affect the Group's liquidity and ability to fund and expand the Group's business.

Any funds the Group transfers to its PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with the relevant authorities in the PRC. According to the relevant PRC regulations on foreign-invested enterprises in the PRC, capital contributions to the Group's PRC subsidiaries are subject to the requirement of making the necessary filings in the Foreign Investment Comprehensive Management Information System, or FICMIS, and making registrations with other governmental authorities in the PRC. In addition, (i) any foreign loan procured by the Group's PRC subsidiaries is required to be registered with the SAFE, or its local branches; and (ii) each of the Group's PRC subsidiaries may not procure loans which exceed the difference between its registered capital and its total investment amount as recorded in FICMIS. Any medium or long-term loan to be provided by the Group to its consolidated affiliated entities must be recorded and registered by the National Development and Reform Committee and the SAFE or its local branches. The Group may not be able to complete such recording or registrations on a timely basis, if at all. If the Group fails to complete such

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recording or registrations, its ability to use the proceeds of this offering and to capitalise the Group's PRC subsidiaries may be negatively affected, which could adversely affect the Group's liquidity and its ability to fund and expand its business.

On 30 March 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign Invested Enterprises 《( 國家外匯管理局關於改革外商投資企業外匯資本金結匯管理方式的通知》), or SAFE Circular No. 19, which took effect as of 1 June 2015 and replaced the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign Invested Enterprises, or SAFE Circular No. 142, and the Circular on Relevant Issues Concerning the Pilot Reform of the Administration of the Conversion of Foreign Equity Capital of Foreign Invested Enterprises in Certain Areas, or SAFE Circular No. 36, from 1 June 2015. SAFE Circular No. 19 launched a nationwide reform of the administration of the settlement of foreign exchange capital of foreign-investedenterprises and allows foreign-investedenterprises to settle their foreign exchange capital at their discretion. On 9 June 2016, the SAFE promulgated the Circular on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange (國家外匯管理局關於改革和規範資本專案結匯管理政策的通知), or SAFE Circular No. 16. SAFE Circular No. 19 and SAFE Circular No. 16 continue to prohibit foreign-investedenterprises from, among other things, using Renminbi funds converted from their foreign exchange capital for expenditure beyond their business scope, making investment (except for securities investment or non-guaranteedbank products), issuing loans to non-affiliatedenterprises, or constructing or purchasing real estate not for self-use.The applicable foreign exchange circulars and rules may significantly limit the Group's ability to use Renminbi converted from net proceeds from an offering to fund the establishment of new PRC subsidiaries, to invest in or acquire any other PRC companies, to provide additional funding to the Group's consolidated affiliated entities or to establish new consolidated affiliated entities in the PRC, which may adversely affect the Group's liquidity and the Group's ability to fund and expand the Group's business in the PRC.

Fluctuations in exchange rates could have a material and adverse effect on the Group's

results of operations and the value of your investment.

The conversion of Renminbi into foreign currencies, including the Hong Kong dollar and U.S. dollar, is based on rates set by the People's Bank of China. On 30 November 2015, the Executive Board of the International Monetary Fund ("IMF") completed its regular five-year review of the basket of currencies that make up the Special Drawing Right ("SDR") and decided that, with effect from 1 October 2016, Renminbi is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese yen, and the British pound. With the development of the foreign exchange market and progress toward interest rate liberalisation and Renminbi internationalisation, the PRC government may in the future announce further changes to the exchange rate system, and there can be no assurance that the Renminbi will not appreciate or depreciate significantly in value against the Hong Kong dollar or the U.S. dollar in the future.

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As the Group may rely on dividends and other fees paid to it by its subsidiaries and X.D. Network in the PRC, any significant revaluation of the Renminbi may materially and adversely affect the Group's cash flows, revenue, earnings and financial position, and the value of, and any dividends on, the Group's shares payable in Hong Kong dollars or U.S. dollars. For example, if the Group decides to convert its Renminbi into Hong Kong dollars or U.S. dollars for the purpose of making payments for dividends on its shares or for other business purposes, appreciation of the Hong Kong dollar or the U.S. dollar against the Renminbi would have a negative effect on the Hong Kong dollar or the U.S. dollar amount available to the Group. In addition, due to changes in exchange rates, the Group had a foreign exchange gain of RMB9.5 million and RMB1.5 million in 2018 and 2019, respectively, and a foreign exchange gain of RMB2.8 million in 2020.

The net proceeds from the offering of the Bonds are expected to be deposited overseas in currencies other than Renminbi until the Group completes such recording or registrations with the relevant PRC regulatory authorities to convert these proceeds into onshore Renminbi. If the net proceeds cannot be converted into onshore Renminbi in a timely manner, the Group's ability to deploy these proceeds efficiently may be affected, as the Group will not be able to invest these proceeds in Renminbi-denominated assets onshore or deploy them in uses onshore where Renminbi is required, which may adversely affect the Group's business, results of operations and financial condition.

Governmental control of currency conversion may limit the Group's ability to utilise the

Group's revenue effectively and affect the value of your investment.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The Group receives a large proportion of its revenue in Renminbi. Under the Group's current corporate structure, the companies in the Cayman Islands primarily rely on dividend payments from WFOE, the Group's wholly-owned PRC subsidiaries in the PRC, to fund any cash and financing requirements that the Group may have.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the SAFE by complying with certain procedural requirements. Therefore, WFOE may pay dividends in a foreign currency to the Group without preapproval from the SAFE. However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of the PRC to pay capital expenses, such as the repayment of loans denominated in foreign currencies. In light of the significant capital outflows from the PRC since 2016 due to the weakening of Renminbi, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny over major outbound capital movements. More restrictions and a substantial vetting process have been put in place by the SAFE to regulate cross-border transactions falling under the capital account. The PRC government may at its discretion further restrict access to foreign currencies for current account transactions in the future.

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If the foreign exchange control system prevents the Group from obtaining sufficient foreign currencies to satisfy its foreign currency demands, the Group may not be able to pay dividends in foreign currencies to its shareholders.

Discontinuation of any of the preferential tax treatments and government subsidies or imposition of any additional taxes and surcharges could adversely affect the Group's financial condition and results of operations.

The Group's PRC subsidiaries and PRC Consolidated Affiliated Entities are incorporated in the PRC and are governed by applicable PRC income tax laws and regulations. The EIT Law and its implementing rules, both of which came into effect on 1 January 2008, and were amended on 24 February 2017 and on 29 December 2018, impose a statutory rate of 25% on PRC enterprises. Under the EIT Law, its implementation regulations and other relevant rules, companies qualified as "High and New Technology Enterprises" are entitled to enjoy a preferential enterprise income tax rate of 15%. X.D. Network obtained/renewed its qualification as a High and New Technology Enterprise in 2019, and is and will be subject to a reduced preferential tax rate of 15% for a three-year period from 2019 to 2022. Yiwan obtained its qualification as a software enterprise in 2018, and is and will be subject to a reduced preferential tax rate of 12.5% for a three-year period from 2020 to 2022. The government grants that the Group received were RMB8.1 million, RMB12.4 million and RMB25.8 million for the years ended 31 December 2018, 2019 and 2020, respectively.

Preferential tax treatments and incentives granted to the Group by PRC government authorities are subject to review and may be adjusted or revoked at any time in the future. The Group cannot guarantee that the preferential tax treatments and incentives to which its PRC subsidiaries and PRC Consolidated Affiliated Entities are currently entitled would be successfully renewed. There can be no assurance that the local tax authorities will not, in the future, change their position and discontinue any of the Group's current tax treatments, potentially with retrospective effect. The discontinuation of any of the Group's current tax treatments could materially increase the Group's tax obligations and adversely impact the Group's net income.

In addition, the Group's PRC subsidiaries and PRC Consolidated Affiliated Entities have received various financial subsidies from PRC local government authorities, such subsidies being discretionary incentives and policies that those PRC local government authorities have adopted. Local governments may decide to change or discontinue such financial subsidies at any time. The discontinuation of such financial subsidies or imposition of any additional taxes could adversely affect the Group's financial condition and results of operations.

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The Group may be classified as a "resident enterprise" for PRC enterprise income tax purposes, which could result in unfavourable tax consequences to the Group and the Group's non-PRC shareholders.

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a "de facto management body" within the PRC is considered a resident enterprise and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term "de facto management body" as the body that exercises full and substantial control over and overall management of the business, production, personnel, accounts and property of an enterprise. In April 2009, the SAT issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the "de facto management body" of a PRC-controlled enterprise that is incorporated offshore is located in the PRC. According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its "de facto management body" in the PRC and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise's primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.

The Group believes none of its entities outside of the PRC is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body." As substantially all of the Group's management members are based in the PRC, it remains unclear how the tax residency rule will apply in the Group's case. If the PRC tax authorities determine that any of the Group's subsidiaries outside of the PRC is a PRC resident enterprise for PRC enterprise income tax purposes, then such subsidiary could be subject to PRC tax at a rate of 25% on its worldwide income, which could materially reduce the Group's net income. In addition, the Group will also be subject to PRC enterprise income tax reporting obligations. Furthermore, if the PRC tax authorities determine that the Group is a PRC resident enterprise for enterprise income tax purposes, gains realized on the sale or other disposition of the Group's shares may be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Group is treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the shares.

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The EIT Law will affect tax exemptions on dividends to be paid by the Group's PRC subsidiaries to the Group through the Group's Hong Kong subsidiary and the Group may not be able to obtain certain treaty benefits under the relevant tax treaty.

The Group is a holding company incorporated under the laws of the Cayman Islands and as such rely on dividends and other distributions on equity from the Group's PRC subsidiaries to satisfy part of the Group's liquidity requirements. Pursuant to the PRC EIT Law, a withholding tax rate of 10% currently applies to dividends paid by a PRC "resident enterprise" to a foreign enterprise, unless the jurisdiction of the foreign investor's tax residence has a tax treaty with the PRC that provides for preferential tax treatment. Pursuant to the Arrangement between the PRC and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement and relevant PRC tax laws on the interpretation of the Arrangement, a preferential withholding tax rate of 5% may apply if the PRC enterprise is at least 25% held by the Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and certain other conditions, e.g., the beneficial ownership requirement, are met. Furthermore, under the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties, which became effective in January 2020, the applicant for the preferential withholding rate is required to maintain a record with its in-charge tax authority and keep and maintain all the supporting materials for any post examination by the tax authority. No government approval for the application is required, although the relevant tax authorities may subsequently challenge the applicability of the preferential withholding rate. There can be no assurance that the Group's determination regarding the Group's qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or that the Group will be able to complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate under the Double Taxation Arrangement with respect to dividends to be paid by the Group's PRC subsidiaries to the Company.

Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a

negative impact on potential acquisitions the Group may pursue in the future.

According to the Announcement of the SAT on Several Issues Concerning the Enterprise Income Tax on Indirect Property Transfer by Non-Resident Enterprises, or Circular No. 7, promulgated by the SAT in February 2015 and further revised in October and December 2017, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly through the transfer of the equity interests of an offshore holding company without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of the transaction and treat the indirect equity transfer as a direct transfer. As a result, the gain derived from such transfer, i.e., the transfer price minus the cost of equity, will be subject to PRC withholding tax at a rate of up to 10%. Under the terms of Circular 7, a transfer that meets all of the following circumstances shall be directly deemed as having no reasonable commercial purposes: (i) over 75% of the value of the equity interests of the offshore holding company are directly or indirectly derived from PRC taxable properties; (ii) at any time during the year before the indirect transfer, over 90% of the total properties of the offshore holding company are

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investments within PRC territory, or in the year before the indirect transfer, over 90% of the offshore holding company's revenue is directly or indirectly derived from PRC territory; (iii) the function performed and risks assumed by the offshore holding company are insufficient to substantiate its corporate existence; and (iv) the foreign income tax imposed on the indirect transfer is lower than the PRC tax imposed on the direct transfer of the PRC taxable properties.

The Group faces uncertainties as to the reporting and other implications of certain future transactions where PRC taxable assets are involved, such as offshore restructuring and sale of the shares in the Group's offshore subsidiaries. The Group and its non-PRC resident investors may be subject to filing obligations in such transactions, under Circular 7. For transfers of shares in the Company by investors that are non-PRC resident enterprises, the Group's PRC subsidiaries may be requested to assist with the filing under Circular 7. As a result, the Group may be required to expend valuable resources to comply with Circular 7 or to request that the relevant transferors from whom the Group purchases taxable assets comply with these circulars, or to establish that the Company should not be taxed under these circumstances, which may have a material adverse effect on the Group's business, financial condition and results of operations.

The enforcement of labour contract law and increase in labour costs in the PRC may

adversely affect the Group's business and the Group's profitability.

The PRC adopted a labour contract law and its implementation rules effective on 1 January 2008 and 18 September 2008, respectively. The labour contract law and its implementation rules impose more stringent requirements on employers with regard to, among others, minimum wages, severance payment upon permitted termination of the employment by an employer and non-fixed term employment contracts, time limits for probation periods as well as the duration and the times that an employee can be placed on a fixed term employment contract. The Group's employment policies and practices may violate the labour contract law or its implementation rules and the Group may be subject to related penalties, fines or legal fees. Compliance with the labour contract law and its implementation rules may increase the Group's operating expenses, in particular the Group's personnel expenses, as the continued success of the Group's business depends significantly on the Group's ability to attract and retain qualified personnel. In the event that the Group decides to terminate some of the Group's employees or otherwise change the Group's employment or labour practices, the labour contract law and its implementation rules may also limit the Group's ability to effect those changes in a manner that the Group believes to be cost-effective or desirable, which could adversely affect the Group's business and results of operations.

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Failure to comply with the registration requirements for employee share option plans may subject the Group's PRC equity incentive plan participants or the Group to fines and other legal or administrative sanctions.

On 15 February 2012, the SAFE promulgated the Circular of the SAFE on Relevant Issues Concerning the Foreign Exchange Administration for Domestic Individuals' Participating in the Share Incentive Schemes of Overseas-Listed Companies 《( 國家外匯管理局關於境內個人參與境外

上市公司股權激勵計劃外匯管理有關問題的通知》), or SAFE Circular No. 7, to replace the previous Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of Offshore Listed Companies (境內個人參與境外上市公司員工持股計劃和認股期權計劃等外匯管理操作規程) issued by SAFE in March 2007. SAFE Circular No. 7 regulates foreign exchange matters associated with employee stock option incentives or similar incentives permitted under applicable laws and regulations granted to PRC residents by companies whose shares are listed on offshore stock exchanges.

In accordance with SAFE Circular No. 7, all PRC residents who participate in share incentive plans of an overseas public company are required, through the PRC subsidiaries of the overseas public company, to jointly entrust a PRC agent to handle foreign exchange registration with the SAFE or its local office and complete procedures relating to the share incentive schemes, such as opening accounts and capital transfers. PRC residents include PRC nationals or foreign citizens having consecutively resided in PRC for not less than one year, acting as directors, supervisors, senior management personnel or other employees of PRC companies affiliated with such offshore listed company. A PRC agent can be one of the PRC subsidiaries of the offshore listed company participating in the share incentive scheme or another PRC institution qualified for asset trusteeship as designated by the PRC subsidiaries and in accordance with PRC laws. The foreign exchange proceeds received by PRC residents from the sale of shares under share incentive plans granted by offshore listed companies must be remitted to bank accounts in the PRC opened by the PRC agents. Further, a Notice Concerning Individual Income Tax on Earnings from Employee Stock Options, jointly issued by the Ministry of Finance and the State Administration of Taxation, or the SAT, provides that domestic companies which implement employee share option programs must file the employee share option plans and other relevant documents with local tax authorities having jurisdiction over the companies before implementing such plans, and must file share option exercise notices and other relevant documents with local tax authorities before their employees exercise any share options.

After the offering, the Group and its PRC employees who are granted restricted shares or exercised share options granted under its share incentive plans are subject to these regulations. The Group plans to complete, and advise the Group's employees to complete, these procedures in connection with the Group's share incentive plans. However, there can be no assurance that registration procedures with the SAFE or its local counterparts in full compliance with SAFE Circular No. 7 will be completed on a timely basis, if at all. The failure to complete these procedures may subject the Group or its PRC employees holding restricted shares or share options under the Group's share incentive plans to fines and other legal or administrative sanctions.

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Investors may experience difficulties in effecting service of legal process and enforcing

judgments against the Group and the Group's management.

The Group is incorporated in the Cayman Islands. Almost all of the Group's assets are located in the PRC. Therefore, it may not be possible for investors to effect service of process upon the Group or those persons inside the PRC. The PRC has not entered into treaties or arrangements providing for the recognition and enforcement of judgments made by courts of most other jurisdictions. On 14 July 2006, the PRC Supreme Court and the Hong Kong government signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland China and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned (最高

人民法院關於內地與香港特別行政區法院相互認可和執行當事人協議管轄的民商事案件判决的安排) (the "Arrangement"). Under the Arrangement, where any designated people's court of the PRC or any designated Hong Kong court has made an enforceable final judgment requiring payment of money in a civil and commercial case pursuant to a choice of court agreement in writing by the parties, any party concerned may apply to the relevant people's court of the PRC or Hong Kong court for recognition and enforcement of the judgment. The Arrangement came into effect on 1 August 2008, but the outcome and enforceability of any action brought under the Arrangement is still uncertain. In addition, the PRC currently is not a party to any treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States, the United Kingdom, most other Western countries or Japan, and therefore enforcement in the PRC of judgments of a court in any of these jurisdictions may be difficult or impossible. On 18 January 2019, the Supreme People's Court of the PRC and the government of the Hong Kong Special Administrative Region entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and Hong Kong (最高人民法院關於內地與香港特別行政區法院相互認可和執行民商事案件判決的安排) (the "New Arrangement") which will take effect once the governments of the PRC and Hong Kong have enacted legislation and implementing rules for the New Arrangement. Pursuant to the New Arrangement, if the parties have already signed the choice of court agreement in writing under the Arrangement before the New Arrangement enter into force, the Arrangement shall still apply.

The Group faces risks of health epidemics and other disasters in the PRC, which could

severely disrupt the Group's business operations.

The Group's business could be materially and adversely affected by the outbreak of infectious diseases, such as COVID-19, H1N1, or swine influenza, avian influenza, severe acute respiratory syndrome, or SARS, or another epidemic. Any adverse public health developments in the PRC could require the temporary closure of the Group's offices. Such closures could severely disrupt the Group's business operations and adversely affect the Group's results of operations. The Group's operations are vulnerable to interruption and damage from man-made or natural disasters, including wars, acts of terrorism, earthquakes, fire, floods, environmental accidents, power loss,

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communications failures and similar events, all of which may disrupt the Group's business. If any significant man-made or natural disaster were to occur in the future, the Group's ability to operate its business could be seriously impaired.

Inflation in the PRC could negatively affect the Group's profitability and growth.

Economic growth in the PRC has, in the past, been accompanied by periods of high inflation, and the PRC government has implemented various policies from time to time to control inflation, including imposing various corrective measures designed to restrict the availability of credit or regulate growth. High inflation in the future may cause the PRC government to once again impose controls on credit and/or price of commodities, or to take other actions, which could inhibit economic activities in the PRC. Any action on the part of the PRC government that seeks to control credit and/or price of commodities may adversely affect the Group's business operations, causing negative impact on the Group's profitability and growth.

RISKS RELATING TO OWNERSHIP OF THE BONDS AND THE GROUP'S SHARES AND THE OFFERING OF THE BONDS

The Bonds are unsecured obligations.

The Bonds constitute direct, unsubordinated, unconditional, and (subject to "Terms and Conditions of the Bonds - Covenants - Negative Pledge") unsecured obligations of the Issuer ranking pari passu and rateably, without any. The payment obligations of the Issuer under the Bonds, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to the negative pledge contained in Condition 4(A) of the Terms and Conditions rank equally with all of its other present and future unsecured and unsubordinated obligations. The obligations under the Bonds may be adversely affected if:

the Group enters into bankruptcy, liquidation, rehabilitation or other winding-up proceedings;
there is a default in payment under the Group's future secured indebtedness or other unsecured indebtedness; or
there is an acceleration of any of the Group's indebtedness.

If any of the above events occurs, the Group's assets may not be sufficient to pay amounts due on the Bonds.

Changes in market interest rates may adversely affect the value of the Bonds.

Investment in the Bonds, which carry a fixed rate of interest, involves the risk that subsequent changes in market interest rates may adversely affect the value of the Bonds.

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The Bonds may not be a suitable investment for all investors.

Each potential investor in the Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained or incorporated by reference in this Offering Circular;
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Bonds and the impact such investment will have on its overall investment portfolio;
have sufficient financial resources and liquidity to bear all of the risks of an investment in the relevant Bonds; and
understand thoroughly the terms of the Bonds and be familiar with the behaviour of any relevant indices and financial markets; and be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

A potential investor should not invest in Bonds, which are complex financial instruments, unless it has the expertise (either alone or with the help of a financial adviser) to evaluate how the Bonds will perform under changing conditions, the resulting effects on the value of such Bonds and the impact this investment will have on the potential investor's overall investment portfolio. Additionally, the investment activities of certain investors are subject to investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (a) the Bonds are legal investments for it, (b) the Bonds can be used as collateral for various types of borrowing and (c) other restrictions apply to its purchase of the Bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Bonds under any applicable risk-based capital or similar rules.

Holders will have no rights as holders of the Shares prior to conversion of the Bonds, but are

subject to changes made with respect to the Shares.

Unless and until the Bondholders acquire the Shares upon conversion of the Bonds, they will have no rights with respect to the Shares, including any voting rights or rights to receive any regular dividends or other distributions with respect to the Shares. However, such Bondholders are subject to all changes affecting the Shares. For example, in the event that an amendment is proposed to the Company's articles of association requiring shareholders' approval, and the record date for determining the registered shareholders entitled to vote on the amendment occurs prior to the date of conversion of the Bonds for such Shares and (as applicable) the date of registration by

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the relevant Bondholder as the holder thereof, that Bondholder would not be entitled to vote on the amendment but would nevertheless be subject to any resulting changes in the powers, preferences or special rights that affect the Shares after conversion. Upon conversion of the Bonds, these holders will be entitled to exercise the rights of holders of the Shares only as to actions for which the applicable record date occurs after the date of conversion.

The Issuer may not have the ability to redeem the Bonds.

The Issuer will at maturity be required to redeem all of the Bonds and the Bondholders may require the Issuer to redeem for cash all or some of their Bonds on 12 April 2024 or upon a transaction or event constituting a change of control or delisting or otherwise as described under the headings "Terms and Conditions of the Bonds - Redemption, Purchase and Cancellation - Redemption at the Option of the Bondholders" and "Terms and Conditions of the Bonds - Redemption, Purchase and Cancellation - Redemption for Relevant Event." The Issuer may not have sufficient funds or other financial resources to make the required redemption in cash at such time or the ability to arrange necessary financing on acceptable terms, or at all. The Issuer's ability to redeem the Bonds in such event may also be limited by the terms of other debt instruments. Failure to repay, repurchase or redeem tendered Bonds by the Issuer would constitute an event of default under the Bonds, which may also constitute a default under the terms of other indebtedness held by the Issuer.

If the Issuer fails to complete the post-issuance report to the NDRC in connection with the Bonds, NDRC may impose penalties or other administrative procedures on the Issuer.

On 14 September 2015, the NDRC promulgated the Circular of the NDRC on Pushing Forth Administrative Reform for Filing and Registration for Issuance of Foreign Debt by Enterprises 《( 國家發展改革委關於推進企業發行外債備案登記制管理改革的通知》) (the "NDRC Circular") pursuant to which if a PRC enterprise or an offshore enterprise controlled by a PRC enterprise wishes to issue bonds outside of the PRC with a maturity of more than one year, such PRC enterprise must in advance of issuing such bonds, file certain prescribed documents with the NDRC and procure a registration certificate from the NDRC in respect of such issue. According to the NDRC Circular, the NDRC is expected to issue a decision on the submission within seven working days after it accepts the submission. The enterprise must also report certain details of the bonds to the NDRC within 10 business days upon the completion of the note issue.

The NDRC Circular is silent on the legal consequences of noncompliance with the pre-issue registration requirement. In the worst case scenario, it might become unlawful for the Issuer to perform or comply with any of its obligations under the Bonds. Similarly, there is no clarity on the legal consequences of noncompliance with the post-issue notification requirement under the NDRC Circular. Additional guidance has been issued by the NDRC 《( 企業境外發行債券指引》) (the "NDRC Circular Guidelines") on 18 December 2015, which states that companies, investment banks, law firms and other intermediaries involved in debt securities issues which do not comply with the registration requirement under the NDRC Circular will be subject to a blacklist and

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sanctions. The NDRC Circular Guidelines are silent as to how such blacklist will be implemented or the exact sanctions that will be enacted by the NDRC, or any impact on the Bondholders, in the event of a noncompliance by the Issuer with the NDRC Circular. The Issuer has undertaken to notify the NDRC of the particulars of the issue of the Bonds within the prescribed period under the NDRC Circular.

There is no assurance that the NDRC will not issue further implementation rules or notices which may require additional steps in terms of the registration or provide sanctions or other administrative procedures the NDRC may impose in case of failure of such registration with, or post issuance report to, the NDRC. If the Issuer does not report the post issuance information with respect to the Bonds within the time frame as provided under the NDRC Circular, the NDRC may impose sanctions or other administrative procedures on the Issuer which may have a material adverse impact on its business, financial condition or results of operations.

The Bonds may be early redeemed at the Issuer's option.

The Issuer may, on giving not less than 30 nor more than 60 days' notice to the Bondholders, the Trustee and the Principal Agent in writing, redeem the Bonds in whole, but not in part at their principal amount, together with interest accrued but unpaid to but excluding such date: (i) at any time after 26 April 2024 but prior to the Maturity Date, provided that the Closing Price of the Shares of the Issuer, translated into U.S. dollars at the Prevailing Rate applicable to the relevant Trading Day, for 20 out of 30 consecutive Trading Days prior to the date upon which notice of such redemption is published was at least 130 per cent. of the Conversion Price then in effect (translated into U.S. dollars at the Fixed Exchange Rate); or (ii) at any time if, prior to the date of such notice, Conversion Rights shall have been exercised and/or purchases (and corresponding cancelations) and/or redemptions effected in respect of 90 per cent. or more in aggregate principal amount of the Bonds originally issued.

In addition, the Bonds may be redeemed at the option of the Issuer in whole and not in part, on giving not less than 30 nor more than 60 days' notice (a "Tax Redemption Notice") to the Bondholders, the Trustee and the Principal Agents, at their principal amount, together with interest accrued but unpaid to but excluding the date specified in the Tax Redemption Notice (if any), if the Issuer has or will become obliged to pay Additional Tax Amounts as a result of certain events set out in the Conditions and such obligation cannot be avoided by the Issuer taking reasonable measures available to it.

As a result, the trading price of the Bonds may be affected when any redemption option of the Issuer becomes exercisable. Accordingly, Bondholders may not be able to sell their Bonds at an attractive price, thereby having a material adverse effect on the trading price and liquidity of the Bonds.

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The Bonds will be structurally subordinated to subsidiary debt.

Payments under the Bonds will be structurally subordinated to the claims of all holders of debt securities and other creditors, including trade creditors, of the Company's subsidiaries, and to all the Company's secured creditors. A substantial part of the Company's operations are conducted through the Company's subsidiaries, associated companies and jointly controlled entities. Accordingly, the Company will be dependent on the operations of its subsidiaries, associated companies and jointly controlled entities to service its indebtedness, including interest and principal on the Bonds. In the event of an insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of the business of any of the Company's subsidiaries, creditors of such subsidiaries generally will have the right to be paid in full before any distribution is made to the Company.

Short selling of the Shares by purchasers of the Bonds could materially and adversely affect

the market price of the Shares.

The issuance of the Bonds may result in downward pressure on the market price of the Shares. Many investors in convertible bonds seek to hedge their exposure in the underlying equity securities, often through short selling the underlying equity securities or similar transactions. Any short selling or similar hedging activity could place significant downward pressure on the market price of the Shares, thereby having a material adverse effect on the market value of the Shares as well as on the trading price of the Bonds.

The insolvency laws of the PRC, the Cayman Islands and other local insolvency laws may differ from those of any other jurisdiction with which holders of the Bonds are familiar.

As some of the Company's subsidiaries and Consolidated Affiliated Entities are established under the laws of the PRC, and the Issuer is incorporated under the laws of the Cayman Islands, an insolvency proceeding relating to these subsidiaries or consolidated affiliated entities, even if brought in other jurisdictions, would likely involve insolvency laws of PRC and/or the Cayman Islands the procedural and substantive provisions of which may differ from comparable provisions of bankruptcy law in other jurisdictions. Investors should analyse the risks and uncertainties carefully before they invest in the Bonds.

A trading market for the Bonds may not develop, and there are restrictions on resale of the

Bonds.

The Bonds are a new issue of securities for which there is currently no trading market. Although the Issuer will make a formal application for the listing of, and permission to deal in, the Bonds on the Hong Kong Stock Exchange, there is no assurance that the Issuer will obtain or be able to maintain such listing on the Hong Kong Stock Exchange, or that, if listed, a liquid trading market will develop. If a market does develop, it may not be liquid. Therefore, investors may not be able to sell their Bonds easily or at prices that will provide them with a yield comparable to

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similar investments that have a developed secondary market. Illiquidity may have an adverse effect on the market value of Bonds. In addition, the Bonds are being offered pursuant to exemptions from registration under the U.S. Securities Act and, as a result, investors will only be able to resell their Bonds in transactions that have been registered under the U.S. Securities Act or in transactions not subject to or exempt from registration under the U.S. Securities Act. There is no assurance whether an active trading market for the Bonds will develop or be sustained.

If an active trading market were to develop, the Bonds could trade at a price that may be lower than the issue price of the Bonds. Whether or not the Bonds will trade at lower prices depends on many factors, including:

prevailing interest rates and the market for similar securities;
general economic, market and political conditions;
the Group's financial condition, financial performance and future prospects;
the publication of earnings estimates or other research reports and speculation in the press or investment community in relation to the Group; and
changes in the industry and competition affecting the Group.

The liquidity and price of the Bonds following the offering may be volatile.

The price and trading volume of the Bonds may be highly volatile. Factors such as variations in the Group's revenue, earnings and cash flows, proposals for new investments, strategic alliances and/or acquisitions, changes in interest rates, fluctuations in price for comparable companies, government regulations and changes thereof applicable to its industry and general economic conditions nationally or internationally could cause the price of the Bonds to change. Any such developments may result in large and sudden changes in the trading volume and price of the Bonds. There is no assurance that these developments will not occur in the future.

Future issuances of Shares or equity-related securities may depress the trading price of the

Shares.

Any issuance of equity securities of the Issuer after this offering of the Bonds could dilute the interest of the existing shareholders and could substantially decrease the trading price of the Shares. The Issuer may issue equity securities in the future for a number of reasons, including to finance its operations and business strategy (including in connection with acquisitions, strategic collaborations or other transactions), to adjust its ratio of debt-to-equity, to satisfy its obligations upon the exercise of outstanding warrants, options or other convertible bonds or for other reasons. Sales of a substantial number of Shares or other equity-related securities in the public market (or the perception that such sales may occur) could depress the market price of the Shares, and impair

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ability of the Issuer to raise capital through the sale of additional equity securities. There is no restriction on ability of the Issuer to issue bonds or the ability of any of the shareholders of the Issuer to dispose of, encumber or pledge the Shares, and there can be no assurance that the Issuer will not issue bonds or that its shareholders will not dispose of, encumber or pledge the Shares. The Issuer cannot predict the effect that future sales of the Shares or other equity-related securities would have on the market price of the Shares. In addition, the price of the Shares could be affected by possible sales of the Shares by investors who view the Bonds as a more attractive means of obtaining equity participation in the Issuer and by hedging or engaging in arbitrage trading activity involving the Bonds.

Adjustments by the Bondholders of their hedging positions in the Shares and the expectation

thereof may have a negative effect on the market price of the Shares

Shares borrowed by the Credit Suisse AG, Singapore Branch under the Securities Lending Agreement entered into between each of Happy Today Holding Limited and Credit Suisse AG, Singapore Branch may be used by investors to establish hedging positions with respect to the Shares through short sale transactions or privately negotiated derivative transactions. Any buying or selling of the Shares by investors in the Bonds to adjust their hedging positions in connection with this offering or in the future may have a negative effect on the market price of the Shares.

Whilst the Issuer is not a party to any of the Securities Lending Agreement and has no obligations or liabilities thereunder, and all terms and conditions of the Securities Lending Agreement are between the parties thereto and are beyond the Issuer's control, there can be no assurance that the Securities Lending Agreement and any other similar arrangements in the future will not have a negative effect on the market price of the Shares.

The Group's results of operations, financial condition, future prospects and business strategy

could also affect the value of the Shares.

The trading price of the Shares will be influenced by the Company's operational results (which in turn are subject to the various risks to which its businesses and operations are subject) and by other factors such as changes in the regulatory environment that may affect the markets in which it operates and capital markets in general. Corporate events such as share sales, reorganizations, takeovers or share buy-backs may also adversely affect the value of the Shares. Any decline in the price of the Shares would adversely affect the market price of the Bonds.

Conversion of the Bonds would dilute the ownership interest of existing shareholders and

could also adversely affect the market price of the Shares.

The conversion of some or all of the Bonds would dilute the ownership interests of existing shareholders. Any sales in the public market of the Shares issuable upon such conversion could adversely affect prevailing market prices for the Shares. In addition, the conversion of the Bonds might encourage short selling of the Shares by market participants.

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Shares or any securities that are substantially similar to the Shares including, but not limited to, any securities that may be convertible into, or exchangeable for, the Shares that are eligible for future sale by the Company's current Shareholders may adversely affect the value of your investment.

The market prices of the Bonds and the Shares could decline as a result of sales of a large number of the Shares or any securities that are substantially similar to the Shares including, but not limited to, any securities that may be convertible into, or exchangeable for, the Shares after this offering or the perception that such sales could occur. Except for certain lock-up undertakings granted by the Issuer and certain Shareholders as further described in "Summary - Issuer Lock-up" and "Summary - Shareholder Lock-up", there is no restriction on the Issuer's ability to issue, sell or otherwise dispose of and the Issuer's Shareholders' ability to sell or otherwise dispose of, the Shares, and the Issuer cannot assure you that it will not issue, sell or otherwise dispose of, or that any of its Shareholders will not sell or otherwise dispose of, the Shares. If the Shareholders of the Issuer sell a large number of the Shares after this offering, the market price of the Bonds and the Shares could be depressed and the value of your investment could substantially decrease. The market prices of the Shares and the Bonds could also decline if substantial amounts of the Shares or securities convertible or exchangeable into the Shares are sold after the closing of this offering, or if there is a perception that these sales could occur.

Holders will bear the risk of fluctuations in the price of the Shares.

The market price of the Bonds at any time will be affected by fluctuations in the price of the Shares. The Shares are currently listed on the Hong Kong Stock Exchange. There can be no certainty as to the effect, if any, that future issues or sales of the Shares, or the availability of such Shares for future issue or sale, will have on the market price of the Shares prevailing from time to time and therefore on the price of the Bonds.

Sales of substantial numbers of Shares in the public market, or a perception in the market that such sales could occur, could adversely affect the prevailing market price of the Shares and the Bonds. The Company's results of operations, financial condition, future prospects and business strategy could affect the value of the Shares. The trading price of the Shares will be influenced by the Company's operational results and other factors, such as changes in the regulatory environment that may affect the markets in which it operates and capital markets in general. Corporate events such as share sales, organizations, takeovers or share buy-backs may also adversely affect the value of the Shares. Any decline in the price of the Shares would adversely affect the market price of the Bonds.

Holders have limited anti-dilution protection.

The Conversion Price (as defined in the "Terms and Conditions of the Bonds") will be adjusted in the event that there is a subdivision, consolidation or re-denomination, rights issues, bonus issue, reorganization, capital distribution or other adjustment including an offer or scheme

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which affects Shares, but only in the circumstances and only to the extent provided in "Terms and Conditions of the Bonds - Conversion". There is no requirement that there should be an adjustment for every corporate or other event that may affect the value of the Shares. Events in respect of which no adjustment is made may adversely affect the value of the Shares and, therefore, adversely affect the value of the Bonds.

There may be less publicly available information about the Company than is available for

public companies in certain other jurisdictions.

There may be less publicly available information about companies listed in Hong Kong, such as the Company, than is regularly made available by public companies in certain other countries. In addition, the Company's financial information in this Offering Circular has been prepared in accordance with IFRS which differ in certain respects from generally accepted accounting principles ("GAAPs") in certain jurisdictions which might be material to the financial information contained in this Offering Circular. In making an investment decision, investors must rely upon their own examination of the Company, the terms of the offering and the Company's financial information, and should consult their own professional advisers for an understanding of the differences between IFRS and the GAAPs in their home jurisdictions and how those differences might affect the financial information contained in this Offering Circular.

Modification and waivers of the Conditions by majority Bondholders or the Trustee, which

are binding on all Bondholders, may adversely affect Bondholders.

The Trust Deed contain provisions for calling meetings of Bondholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Bondholders including those Bondholders who did not attend and vote at the relevant meeting and those Bondholders who voted in a manner contrary to the majority. In addition, an Extraordinary Resolution (as defined in the Trust Deed) in writing signed by or on behalf of the holders of not less than 90% in nominal amount of Bonds outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of holder of Bonds duly convened and held.

The Conditions also provide that the Issuer may direct the Trustee to effect, without the consent of the Bondholders and subject to the satisfaction of certain conditions, any modification (save for certain reserved matters) to, or any waiver of the Conditions, the Agency Agreement or the Trust Deed, if to do so could not reasonably be expected to be materially prejudicial to the interests of the Bondholders or is in the opinion of the Trustee of a formal, minor or technical nature or to correct a manifest error or to comply with mandatory provisions of law. Any such modification, authorization or waiver shall be binding on all Bondholders.

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Exchange rate risks and exchange controls may affect an investor's returns on the Bonds.

The Issuer will pay interest and principal on the Bonds in United States dollars. This presents certain risks relating to currency conversions if an investor's financial activities are denominated principally in a currency or currency unit (the "Investor's Currency") other than United States dollar. These include the risk that exchange rates may significantly change (including changes due to devaluation of the United States dollar or revaluation of the Investor's Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in the value of the Investor's Currency relative to United States dollar would decrease (i) the Investor's Currency-equivalent yield on the Bonds; (ii) the Investor's Currency-equivalent value of the principal payable on the Bonds; and (iii) the Investor's Currency-equivalent market value of the Bonds. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less principal than expected, or no principal.

The Trustee may request Bondholders to provide an indemnity and/or security and/or

prefunding to its satisfaction.

In certain circumstances, the Trustee may (at its sole discretion) request Bondholders to provide an indemnity and/or security and/or prefunding to its satisfaction before it takes actions on behalf of Bondholders. The Trustee shall not be obliged to take any such actions if not indemnified and/or secured and/or prefunded to its satisfaction. Negotiating and agreeing to an indemnity and/or security and/or prefunding can be a lengthy process and may impact on when such actions can be taken. The Trustee may not be able to take actions, notwithstanding the provision of an indemnity and/or security and/or prefunding to it, in breach of the terms of the Trust Deed or in circumstances where there is uncertainty or dispute as to the applicable laws or regulations and, to the extent permitted by the Trust Deed and the Conditions and applicable laws and regulations, it will be for the Bondholders to take such actions directly.

The Bonds will initially be represented by the Global Certificate and holders of a beneficial interest in the Global Certificate must rely on the procedures of the relevant Clearing System.

The Bonds will initially be represented by the Global Certificate. Such Global Certificate will be deposited with a common depositary for Euroclear and Clearstream (each of Euroclear and Clearstream, a "Clearing System"). Except in the circumstances described in the Global Certificate, investors will not be entitled to receive definitive Bonds. The relevant Clearing System will maintain records of the beneficial interests in the Global Certificate. While the Bonds are represented by the Global Certificate, investors will be able to trade their beneficial interests only through the Clearing Systems.

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While the Bonds are represented by the Global Certificate, the Issuer will discharge its payment obligations under the Bonds by making payments to the common depositary for Euroclear and Clearstream, for distribution to their account holders. A holder of a beneficial interest in the Global Certificate must rely on the procedures of the relevant Clearing System to receive payments under the Bonds. The Issuer does not have any responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Certificate.

Holders of beneficial interests in the Global Certificate will not have a direct right to vote in respect of the Bonds. Instead, such holders will be permitted to act only to the extent that they are enabled by the relevant Clearing System to appoint appropriate proxies.

The Company's public Shareholders may have more difficulty in protecting their interests

than they would as a shareholder of a corporation of other jurisdictions.

The Issuer's corporate affairs are governed by its Memorandum and Articles of Association governing Cayman Islands companies. The rights of the Shareholders of the Issuer to bring Shareholders' suits against its board of Directors under Cayman Islands laws are much more limited than those of the shareholders of corporations of some other jurisdictions. Therefore, the public Shareholders of the Issuer may have more difficulty in protecting their interests in connection with actions taken by the Issuer's management or members of the Issuer's board of Directors than they would as shareholders of corporations of other jurisdictions.

If the Issuer is unable to comply with the restrictions and covenants in its debt agreements, there could be a default under the terms of these agreements, which could cause repayment of its debt to be accelerated.

If the Issuer or any of its subsidiaries are unable to comply with the restrictions and covenants or its current or future debt obligations and other agreements, there could be a default under the terms of these agreements. In the event of a default under these agreements, the holders of the debt could terminate their commitments to lend, as the case may be, accelerate repayment of the debt and declare all outstanding amounts due and payable or terminate the agreements, as the case may be. As a result, a default under one debt agreement may cause the acceleration of repayment of not only such debt but also other debt, including the Bonds, or result in a default under the Issuer or its subsidiary's other debt agreements. If any of these events occur, the Issuer cannot assure investors that the Issuer or its subsidiary's assets and cash flows would be sufficient to repay in full all of its indebtedness, or that the Issuer would be able to find alternative financing. Even if the Issuer could obtain alternative financing, the Issuer cannot assure investors that it would be on terms that are favourable or acceptable to it.

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Legal investment considerations may restrict certain investments.

The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (a) the Bonds are legal investments for it, (b) the Bonds can be used as collateral for various types of borrowing and (c) other restrictions apply to its purchase of the Bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Bonds under any applicable risk-based capital or similar rules.

The Issuer will follow the applicable corporate disclosure standards for debt securities listed on the Hong Kong Stock Exchange, which standards may be different from those applicable to companies in certain other countries.

The Issuer will be subject to reporting obligations in respect of the Bonds to be listed on the Hong Kong Stock Exchange. The disclosure standards imposed by the Hong Kong Stock Exchange may be different from those imposed by securities exchanges in other countries or regions. As a result, the level of information that is available may not correspond to what investors in the Bonds are accustomed to.

Bondholders may be subject to tax.

Prospective investors of the Bonds are advised to consult their own tax advisers concerning the overall tax consequences of the purchase, ownership, disposition or conversion of the Bonds or the Shares. See "Taxation" for a discussion of tax consequences in certain jurisdictions.

The Bonds are redeemable in the event of certain withholding taxes being applicable.

No assurances are made by the Issuer as to whether or not payments on the Bonds may be made without withholding taxes or deductions applying from the Issue Date on account of any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within the PRC, the Cayman Islands, Hong Kong or, in each case, any subdivision or authority therein or thereof having power to tax. Although pursuant to the Conditions, the Issuer is required to gross up payments in respect of the Bonds on account of any such withholding taxes or deductions, the Issuer also has the right to redeem the Bonds at any time in the event the Issuer has or will become obliged to pay additional amounts on account of any existing or future withholding or deduction for any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within the PRC, the Cayman Islands, Hong Kong or, in each case, any subdivision or authority therein or thereof having power to tax as a result of any change in, or amendment to, the laws or regulations of the PRC, Hong Kong or the Cayman Islands or, in each case, any subdivision or authority therein or thereof having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 31 March 2021.

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Securities laws restrictions on the resale and conversion of the Bonds and the resale of the Shares issuable upon their conversion may impact investors' ability to sell the Bonds.

The Issuer has not registered the Bonds or the Shares issuable upon conversion of the Bonds under the U.S. Securities Act or other securities laws. Unless and until the Bonds and the Shares issuable upon conversion of the Bonds are registered, they may not be offered or sold or resold except in transactions that are exempt from the registration requirements of the U.S. Securities Act and hedging transactions may not be conducted unless in compliance with the U.S. Securities Act. The Bonds and the Shares issuable upon conversion of the Bonds thereof will not be freely tradable absent registration or an exemption from registration.

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TERMS AND CONDITIONS OF THE BONDS

The following, subject to amendment and save for the paragraphs in italics, are the Terms and Conditions of the Bonds, substantially as they will appear on the reverse of each of the definitive certificates evidencing the Bonds:

The issue of US$280,000,000 in aggregate principal amount of 1.25 per cent. Convertible Bonds due 2026 (the "Bonds", which term shall include, unless the context requires otherwise, any further bonds issued in accordance with Condition 15 and consolidated and forming a single series therewith) of XD Inc. (the "Issuer") was authorised by resolutions of the board of directors of the Issuer passed on 31 March 2021.

The Bonds are constituted by a trust deed (as amended and/or supplemented from time to time, the "Trust Deed") to be dated on or about 12 April 2021 (the "Issue Date") made between the Issuer and The Bank of New York Mellon, London Branch as trustee for the holders of the Bonds (the "Trustee", which term shall, where the context so permits, include all other persons or companies for the time being acting as trustee or trustees under the Trust Deed) and are subject to a paying, conversion and transfer agency agreement to be dated on or about the Issue Date (as amended and/or supplemented from time to time, the "Agency Agreement") made between the Issuer, the Trustee, The Bank of New York Mellon, London Branch, as principal paying agent and principal conversion agent (the "Principal Agent"), The Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (the "Registrar") and as transfer agent (the "Transfer Agent") and the other paying agents, conversion agents and transfer agents appointed under it (each a "Paying Agent", a "Conversion Agent" or a "Transfer Agent", respectively, and together with the Registrar and the Principal Agent, the "Agents") relating to the Bonds. The term "Paying Agents" includes the Principal Agent and the term "Conversion Agents" includes the Principal Agent. References to the "Principal Agent", the "Registrar", the "Transfer Agent" and "Agents" below are references to the principal agent, the registrar, the transfer agent and agents for the time being for the Bonds. These terms and conditions (these "Conditions") include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Bonds. Unless otherwise defined, terms used in these Conditions have the meanings specified in the Trust Deed.

Copies of the Trust Deed and the Agency Agreement are available during usual business hours (being between 9:00 a.m. and 3:00 p.m. from Monday to Friday other than a public holiday) at the principal office for the time being of the Trustee (being at the Issue Date at One Canada Square, London E14 5AL, United Kingdom) and at the specified office for the time being of the Principal Agent, and may be provided by email to a holder of Bonds, in each case, following prior written request to the Trustee and/or the Principal Agent (as applicable) and satisfactory proof of holding. The Bondholders (as defined in Condition 2(B)) are entitled to the benefit of the Trust Deed, and are bound by, and deemed to have notice of all the provisions of the Trust Deed and those provisions of the Agency Agreement applicable to them.

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1. Status

The Bonds constitute direct, unsubordinated, unconditional and (subject to Condition 4(A)) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to Condition 4(A), at all times rank at least equally with all of its other present and future senior, unsecured and unsubordinated obligations.

2. Form, Denomination and Title

(A) Form and Denomination

The Bonds are issued in registered form in the denomination of US$200,000 each and integral multiples of US$1,000 (each, an "Authorised Denomination") in excess thereof. A bond certificate (each a "Certificate") will be issued to each Bondholder in respect of its registered holding of Bonds. Each Certificate will be numbered serially with an identifying number which will be recorded on the relevant Certificate and in the register of Bondholders (the "Register") which the Issuer will procure to be kept by the Registrar.

Upon issue, the Bonds will be represented by a global certificate (the "Global Certificate") registered in the name of a nominee of, and deposited with, a common depositary for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking S.A. ("Clearstream"). The Conditions are modified by certain provisions contained in the Global Certificate.

Except in the limited circumstances described in the Global Certificate, owners of interests in the Bonds represented by the Global Certificate will not be entitled to receive definitive Certificates in respect of their individual holdings of Bonds. The Bonds are not issuable in bearer form.

(B) Title

Title to the Bonds passes only by transfer and registration in the Register as described in Condition 3. The holder of any Bond will (except as ordered by a court of competent jurisdiction or as otherwise required by law) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft or loss of, the Certificate issued in respect of it) and no person will be liable for so treating the holder. In these Conditions, "Bondholder" and (in relation to a Bond) "holder" means the person in whose name a Bond is registered.

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3. Transfers of Bonds; Issue of Certificates

(A) Register

The Issuer will cause the Register to be kept at the specified office of the Registrar outside Hong Kong and the United Kingdom and in accordance with the terms of the Agency Agreement on which shall be entered the names and addresses of the holders of the Bonds and the particulars of the Bonds held by them and of all transfers, redemptions and conversions of the Bonds. Each Bondholder shall be entitled to receive only one Certificate in respect of its entire holding of Bonds.

(B) Transfer

Subject to Conditions 3(E) and 3(F) and the terms of the Agency Agreement, a Bond may be transferred or exchanged by delivery of the Certificate issued in respect of that Bond, with the form of transfer on the back duly completed and signed by the holder or his attorney duly authorised in writing, to the specified office of either the Registrar or any of the Transfer Agents together with any other evidence as the Registrar or such Transfer Agent may require to prove the title of the transferor and the authority of the individuals who have executed such form of transfer. No transfer of a Bond will be valid unless and until entered on the Register.

Transfers of interests in the Bonds evidenced by the Global Certificate will be effected in accordance with the rules of the relevant clearing systems.

Each new Certificate to be issued upon a transfer or conversion of Bonds will, within seven business days of receipt by the Registrar or, as the case may be, any Transfer Agent of the original certificate and the form of transfer duly completed and signed, be made available for collection at the specified office of the Registrar or such Transfer Agent or, if so requested in the form of transfer, be mailed by uninsured mail at the risk of the holder entitled to the Bonds (but free of charge to the holder and at the Issuer's expense) to the address specified in the form of transfer. The form of transfer is available at the specified office of the Principal Agent.

Except in the limited circumstances described herein (see "The Global Certificate"), owners of interests in the Bonds will not be entitled to receive physical delivery of Certificates.

Where only part of a principal amount of the Bonds (being that of one or more Bonds) in respect of which a Certificate is issued is to be transferred, converted, redeemed or repurchased, a new Certificate in respect of the Bonds not so transferred or converted will, within seven business days of delivery of the original Certificate to the Registrar or the relevant Transfer Agent, be made available for collection at the specified office of the Registrar or such Transfer Agent or, if so

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requested in the form of transfer, be mailed by uninsured mail at the risk of the holder of the Bonds not so transferred, converted, redeemed or repurchased (but free of charge to the holder and at the Issuer's expense) to the address of such holder appearing on the Register.

For the purposes of Condition 3 and Condition 6, "business day" shall mean a day other than a Saturday, Sunday or public holiday on which banks are generally open for business in the city in which the specified office of the Registrar and Transfer Agent (if a Certificate is deposited with it in connection with a transfer or conversion) or the Conversion Agent with whom a Certificate is deposited in connection with a transfer, redemption or conversion, is located.

(D) Formalities Free of Charge

Subject to Conditions 3(E) and 3(F), registration of a transfer of Bonds and issuance of new Certificates will be effected without charge by or on behalf of the Issuer or any of the Agents, but upon (i) payment (or the giving of such indemnity and/or security and/or pre-funding as the Issuer or any of the Agents may require) in respect of any tax, duties or other governmental charges which may be imposed in relation to such transfer and (ii) the Issuer or the relevant Agent being satisfied that the regulations concerning transfer of Bonds have been complied with.

(E) Closed Periods

No Bondholder may require the transfer of a Bond to be registered (i) during the period of 15 days ending on (and including) the dates for payment of any principal pursuant to these Conditions; (ii) after a Conversion Notice (as defined in Condition 6(B)) has been delivered with respect to a Bond; (iii) after a Relevant Event Redemption Notice (as defined in Condition 8(E)) has been deposited in respect of such Bond pursuant to Condition 8(E) or after a put notice has been deposited in respect of such Bond pursuant to Condition 8(D); or (iv) during the period of 15 days ending on (and including) any date of redemption pursuant to Conditions 8(B) and 8(C). Each such period is a "Closed Period".

(F) Regulations

All transfers of Bonds and entries on the Register will be made subject to the detailed regulations concerning transfer of Bonds scheduled to the Agency Agreement. Such regulations may be changed by the Issuer, with the prior written approval of the Trustee and the Registrar, and/or by the Registrar, with the prior written approval of the Trustee. A copy of the current regulations will be mailed (free of charge to the holders) by the Registrar to any Bondholder who requests for one in writing and provides proof of holding of the Bonds satisfactory to the Registrar.

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XD Inc. published this content on 13 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 April 2021 04:52:04 UTC.

Market Closed - Hong Kong S.E. Other stock markets 04:08:35 2024-04-19 am EDT			5-day change	1st Jan Change
13.84 ^HKD	-5.59%		-6.86%	+35.69%

Apr. 10	XD's Unit to Acquire 35% Stake in Gaming Company for $21.6 Million	MT
Mar. 29	Jefferies Adjusts XD’s Price Target to HK$18 From HK$22, Keeps at Buy	MT

XD's Unit to Acquire 35% Stake in Gaming Company for $21.6 Million	Apr. 10	MT
Jefferies Adjusts XD’s Price Target to HK$18 From HK$22, Keeps at Buy	Mar. 29	MT
Video Games Developer XD Narrows Loss in 2023	Mar. 28	MT
XD Inc. Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 28	CI
XD Partially Buys Back $280 Million Convertible Bonds	Jan. 18	MT
Game Developer XD Buys Back $30 Million of Convertible Bonds Due 2026; Shares Up 3%	Jan. 11	MT
XD Inc. Announces Board Changes	Dec. 17	CI
XD Partially Buys Back $280 Million Convertible Bonds	Dec. 06	MT
XD Repurchases $45.4 Million in 2026 Convertible Bonds; Shares Rise 3%	Nov. 23	MT
XD Swings to H1 Profit	23-08-31	MT
XD Inc. Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-31	CI
Jefferies Adjusts XD’s Price Target to HK$22 From HK$26, Keeps at Buy	23-08-07	MT
XD to Swing to H1 Profit	23-08-04	MT
XD Inc. Provides Earnings Guidance for the Six Months Ended June 30, 2023	23-08-04	CI
China Grants 88 Licenses For New Games From XD, iDreamSky, Others	23-07-28	MT
XD Grants Options	23-04-13	MT
XD Shrinks 2022 Loss	23-03-30	MT
XD Inc. Proposes Amendments to the Existing Memorandum and Articles of Association	23-03-30	CI
XD Inc. Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-30	CI
China approves 87 new video games including titles by Tencent and Alibaba	23-02-10	RE
XD Grants 942,550 Options	23-01-11	MT
XD Inc. commences an Equity Buyback for 48,043,070 shares, representing 10% of its issued share capital, under the authorization approved on June 23, 2022.	23-01-10	CI
China to import 44 foreign video games, grants multiple licences to Tencent	22-12-28	RE
Chinese Video Game Regulator Issues Licenses to 70 Games	22-11-18	MT
MarketScreener’s World Press Review : September 14, 2022	22-09-14

	1st Jan change	Capi.
XD INC.	+35.69%	884M
NETEASE, INC.	+0.38%	57.85B
NEXON CO., LTD.	-9.24%	13.22B
KRAFTON, INC.	+31.20%	8.73B
KUNLUN TECH CO., LTD.	-0.70%	6.54B
37 INTERACTIVE ENTERTAINMENT NETWORK TECHNOLOGY GROUP CO., LTD.	-12.28%	5.16B
ZHEJIANG CENTURY HUATONG GROUP CO.,LTD	-18.80%	4.38B
SQUARE ENIX HOLDINGS CO., LTD.	+8.85%	4.28B
NETMARBLE CORPORATION	-1.89%	3.34B
GIANT NETWORK GROUP CO., LTD.	-8.17%	2.79B

XD Inc.

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XD : Publication of the Offering Circular dated 31 March 2021 by XD Inc. in relation to the US$280,000,000 1.25% Convertible Bonds due 2026

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