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United States securities and exchange commission logo
December 9, 2021
Yi Duan
Chief Executive Officer
Fangdd Network Group Ltd.
18/F, Unit B2, Kexing Science Park
15 Keyuan Road, Technology Park
Nanshan District, Shenzhen, 518057
People s Republic of China
Re: Fangdd Network
Group Ltd.
Form 20-F for the
year ended December 31, 2020
Filed on March 31,
2021
File no. 001-39109
Dear Mr. Duan:
We have reviewed your October 27, 2021 and November 2, 2021
responses to our
comment letter and have the following comments. In some of our comments,
we may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
September 20, 2021 letter.
Form 20-F for the year ended December 31, 2020
Part I, page 1
1. We note your response
to our prior comment 1. In that regard, we note your disclosure
that the VIE structure
is used to replicate foreign investment in China-based companies.
We note, however, that
the structure provides contractual exposure to foreign investment
in such companies
rather than replicating an investment. Please revise your disclosure
accordingly.
2. We note your response
to our prior comment 2. Please expand your disclosure at the
outset of Part I to
address with additional detail how recent statements and regulatory
Yi Duan
FirstName LastNameYi Duan
Fangdd Network Group Ltd.
Comapany9,
December NameFangdd
2021 Network Group Ltd.
December
Page 2 9, 2021 Page 2
FirstName LastName
actions by China s government, such as those related to data
security or anti-monopoly
concerns, has or may impact the company s ability to conduct its
business, accept foreign
investments, or list on an U.S. or other foreign exchange.
3. We note your response to our prior comment number 3 and reissue the
comment in part.
Please refrain from using terms such as we or our when
describing activities or
functions of a VIE. In that regard, refrain from using the term "our
VIE" when referencing Fangdd Network and revise your disclosures
accordingly.
Item 3. Key Information, page 4
4. We note your response to our prior comment 4. Please relocate your
proposed disclosure
to include it early on in Item 3 so that it provides additional
context to disclosures you
intend to provide in response to prior comments 7 and 8. Similar to
your proposed
disclosures to be included in Item 3, clearly disclose at the outset
of Part I, that you
control and receive economic benefits of Fangdd Network's business
operations through
VIE agreements and that those agreements are designed to provide your
WFOE with the
power, rights, and obligations equivalent in all material respects to
those it would possess
as the principal equity holder of the VIE and that you are the primary
beneficiary of the
VIE. Your disclosures should also highlight that you or your investors
do not have an
equity ownership in, direct foreign investment in, or control through
such
ownership/investment of the VIE. As such, when describing the design
of the VIE
agreements and related outcome, refrain from implying that the VIE
agreement is
equivalent to an equity ownership in the business of the VIE. Any
references to control or
benefits that accrue to you because of the VIE should be limited to
and clearly describe
the conditions you met for consolidation of the VIE under U.S. GAAP
and your disclosure
should clarify that, for accounting purposes, you will be the primary
beneficiary. In
addition, your disclosure should note, if true, that the agreements
have not been tested in a
court of law.
5. We note your response to our prior comment 5. Please relocate your
proposed disclosure
to include it at the outset of Item 3.
6. We note your response to our prior comment 6. Please relocate your
proposed disclosure
to include it at the outset of Item 3. Further, expand your disclosure
to affirmatively
address whether you are required to and have obtained the necessary
permissions from the
CSRC, CAC or any other entity that is required to approve of the VIE
s operations and
address the consequences to you and your investors if you
inadvertently conclude that
approvals are not required, or applicable laws, regulations, or
interpretations change and
you are required to obtain approval in the future.
7. We note your response to our prior comment 7. Please further expand
your disclosures at
the outset of Item 3 to discuss in more detail what the various
restrictions and limitations
are on foreign exchange, your ability to transfer cash between
entities, across borders and
to US investors, and your ability to distribute earnings from your
businesses, including
Yi Duan
Fangdd Network Group Ltd.
December 9, 2021
Page 3
your subsidiaries and/or consolidated VIE, to the parent company and
U.S. investors as
well as the ability to settle amounts owed under the VIE agreements.
Furthermore, include
similar disclosure at the outset of Part I. In that regard, provide a
description of how cash
is transferred through your organization and disclosure regarding your
intentions to
distribute earnings or settle amounts owed under the VIE agreements.
State whether any
transfers, dividends, or distributions have been made to date.
8. We note your response to our prior comment 8 and that the activity of
the VIE is reflected
in the line items titled Amounts Due From/To Subsidiaries and VIE
and Equity (loss)
income of subsidiaries and the VIE and VIE s subsidiaries in the
parent s financial
statements. Please further expand your disclosures to provide a
roll-forward of the
Amounts Due From/To Subsidiaries and VIE line items.
9. We note your response to our prior comment 9. Where you describe
delisting of securities
as a consequence of the inability of the PCAOB to inspect or fully
investigate an auditor,
please also state that trading in securities would be prohibited. Also
disclose that in June
2021, the Senate passed the bill known as the Accelerating Holding
Foreign Companies
Accountable Act, which would reduce this time period from three years
to two years.
Finally, please relocate your disclosure to early in Item 3.
10. Please disclose at the onset of Item 3 whether you are required to
obtain any approvals to
offer securities to foreign investors, whether you have received such
approvals and the
consequences to you and your investors if you do not receive or
maintain the approvals,
inadvertently conclude that such approvals are not required, or
applicable laws,
regulations, or interpretations change and you are required to obtain
approval in the
future.
You may contact Ameen Hamady at 202-551-3891 or in his absence, Shannon
Menjivar at 202-551-3856 if you have any questions.
FirstName LastNameYi Duan Sincerely,
Comapany NameFangdd Network Group Ltd.
Division of
Corporation Finance
December 9, 2021 Page 3 Office of Real
Estate & Construction
FirstName LastName