Alibaba Pictures Group Limited announced that reference is made to the interim results announcement of the company published on December 19, 2014 whereby it was announced that the Group recorded net loss of HKD 446,515,000 for the six months ended June 30, 2014. Further to the 2014 Interim Results Announcement, the board of directors of the company wished to inform shareholders and potential investors of the company that, based on the preliminary assessment of the available unaudited financial information of the Group for the year ended December 31, 2014, the Group is expected to record a substantial loss of not more than HKD 600 million for the year ended December 31, 2014 as compared to a profit of HKD 235 million (restated) for the corresponding year in 2013. This loss for the full year 2014 is mainly attributable to the following factors: a significant drop in revenue for the year ended December 31, 2014 as compared to 2013; asset impairment provisions and fair value change in warrants in the six months ended June 30, 2014 in the amount of approximately HKD 393 million, as disclosed in the 2014 Interim Results Announcement; decrease in gain from disposal of a subsidiary in the year ended December 31, 2014 as compared to 2013; and decrease in gain from sales of art works in the year ended December 31, 2014 as compared to 2013.

Revenue for the year ended December 31, 2014 is expected to decrease significantly when compared to revenue recorded for the corresponding year in 2013. This decline is mainly attributable to delay in distribution of certain TV drama series which were scheduled for distribution in 2014; cancellation/delay of certain motion pictures which were scheduled for production/distribution in 2014; and decrease in magazine advertising and distribution revenue as a combined result of the downturn in the magazine industry and personnel changes in the operation team.