| We are a pioneer of China’s online literature market and operate the leading online literature
platform as measured by the scale and quality of our writers, readers and literary content offerings,
according to the Frost & Sullivan report. As of June 30, 2017, we had 6.4 million writers and 9.6
million literary works. In the six months ended June 30, 2017, average MAUs, calculated as the
average of MAUs for each calendar month, on our platform and our self-operated channels on
Tencent’s distribution platforms reached 191.8 million, comprising 179.3 million on mobile and 12.5
million on PC. Since the launch of the qidian.com website in 2002, we have been critical in
establishing and developing the commercial model for online literature in China to drive the growth
of the overall online literature industry. In December 2014, we acquired Cloudary with the intention
to acquire its literary content and its several literary websites, and to create a leading market position
in the online literature market in China with the largest user base, deepest writer pool, most
comprehensive content library and strongest monetization capability. Today, our online literature
platform connects major constituents of the online literature ecosystem, including writers, readers and
content adaptation partners. |