Alibaba Pictures : CONTINUING CONNECTED TRANSACTIONS - RENEWED SUBLEASE AGREEMENTS

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.

(Incorporated in Bermuda with limited liability)

(Stock Code: 1060)

CONTINUING CONNECTED TRANSACTIONS -

RENEWED SUBLEASE AGREEMENTS

RENEWED SUBLEASE AGREEMENT I

The Board announces that Alibaba Pictures LLC, an indirect wholly-owned subsidiary of the Company, entered into the Renewed Sublease Agreement I with Alibaba US, an indirect wholly-owned subsidiary of AGH, on March 24, 2021 (Pacific Time) for three years commencing from April 1, 2021 and ending on March 31, 2024. Pursuant to the Renewed Sublease Agreement I, Alibaba Pictures LLC agreed to sublease to Alibaba US a portion of the Master Lease Premises which may vary in size from time to time, subject to the relevant annual caps.

RENEWED SUBLEASE AGREEMENT II

The Board further announces that Alibaba Pictures LLC entered into the Renewed Sublease Agreement II with Wavelets, a 30%-controlled company indirectly held by AGH, on March 24, 2021 (Pacific Time) for one year commencing from April 1, 2021 and ending on March 31, 2022. Pursuant to the Renewed Sublease Agreement II, Alibaba Pictures LLC agreed to sublease to Wavelets the Subleased Premises and the Additional Space (where required), subject to the relevant annual caps.

LISTING RULES IMPLICATIONS

Alibaba US is an indirect wholly-owned subsidiary of AGH and Wavelets is a 30%-controlled company indirectly held by AGH. AGH is the ultimate sole shareholder of Ali CV, which is a controlling shareholder and a connected person of the Company holding approximately 50.26% of the issued share capital of the Company as at the date of this announcement. Accordingly, each of Alibaba US and Wavelets is an associate of Ali CV and hence a connected person of the Company. The entering into of the Renewed Sublease Agreements and the transactions contemplated thereunder constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since the Renewed Sublease Agreements are of a similar nature and have been entered into by the Group with a subsidiary and an associate of AGH within a 12-month period,

1

the transactions contemplated under the Renewed Sublease Agreements shall be aggregated as if they were one transaction pursuant to Rule 14A.81 of the Listing Rules.

As all of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the highest aggregated amount of (i) the annual cap of the Rent I and the Additional Fees I under the Renewed Sublease Agreement I, and (ii) the annual cap of the Rent II, the Additional Rent and the Additional Fees II under the Renewed Sublease Agreement II (as applicable), for a particular financial year are more than 0.1% but are all below 5%, all the transactions contemplated under the Renewed Sublease Agreements are subject to the reporting, announcement and annual review requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

INTRODUCTION

Reference is made to the announcement of the Company dated August 31, 2018 in relation to the entering into of the Sublease Agreement I and the Sublease Agreement II. As the Sublease Agreement I and the Sublease Agreement II will expire on March 31, 2021, Alibaba Pictures LLC entered into (i) the Renewed Sublease Agreement I with Alibaba US to renew the Sublease Agreement I, and (ii) the Renewed Sublease Agreement II with Wavelets to renew the Sublease Agreement II, on March 24, 2021 (Pacific Time).

RENEWED SUBLEASE AGREEMENT I

The principal terms of the Renewed Sublease Agreement I are set out below:

Date: March 24, 2021 (Pacific Time)

Parties: (1) Alibaba Pictures LLC, an indirect wholly-owned subsidiary of the Company; and

(2) Alibaba US, an indirect wholly-owned subsidiary of AGH

Term: three years commencing from April 1, 2021 and ending on March 31, 2024

Subject Matter

Pursuant to the Renewed Sublease Agreement I, Alibaba Pictures LLC agreed to sublease to Alibaba US a portion of the Master Lease Premises which may vary in size from time to time for general office use, subject to the relevant annual caps.

Consideration

During the term of the Renewed Sublease Agreement I,

(1)Alibaba US shall pay Alibaba Pictures LLC rent for the portion of the Master Lease Premises leased from Alibaba Pictures LLC (the "Rent I") which is calculated based on the portion of actual total headcount of Alibaba US converted into square footage to that of the aggregate actual headcount of Alibaba Pictures LLC and Alibaba US converted into square footage multiplied by actual rent charged by the Landlord to

Alibaba Pictures LLC; and

(2)Alibaba US shall pay its share of costs related to administrative and office supplies (the "Additional Fees I"), including but not limited to, utility expenses, fees for stationery, magazines, broadband services, landscaping, events and activities, courier services, low-value office equipment and computer accessories, to Alibaba Pictures LLC. The Additional Fees I shall be calculated based on the portion of actual total headcount of Alibaba US converted into square footage to that of the aggregate actual headcount of Alibaba Pictures LLC and Alibaba US converted into square footage multiplied by the total additional fees incurred by Alibaba Pictures LLC when using the Master Lease Premises.

Payment Terms

Pursuant to the Renewed Sublease Agreement I, Alibaba US shall pay the Rent I and the Additional Fees I on a half-yearly basis. Payment is due on the first day of October and March during the term of the Renewed Sublease Agreement I.

RENEWED SUBLEASE AGREEMENT II

The principal terms of the Renewed Sublease Agreement II are set out below:

Date: March 24, 2021 (Pacific Time)

Parties: (1) Alibaba Pictures LLC; and (2) Wavelets, a 30%-controlled company indirectly held by AGH

Term: one year commencing from April 1, 2021 and ending on March 31, 2022

Subject Matter

Pursuant to the Renewed Sublease Agreement II, Alibaba Pictures LLC agreed to sublease to Wavelets the Subleased Premises for general office use. Subject to the consent of Alibaba Pictures LLC, Wavelets shall be also entitled to use the Additional Space (where required) located in the Creative Room within the Master Lease Premises as designated by Alibaba Pictures LLC in its sole and absolute discretion. The rent for the Subleased Premises and the Additional Space is subject to the relevant annual caps.

Consideration

During the term of the Renewed Sublease Agreement II,

(1) Wavelets shall pay Alibaba Pictures LLC rent for the Subleased Premises (the "Rent II"), which is US$3,439.35 per month;

(2)Wavelets shall pay Alibaba Pictures LLC rent for the Additional Space (the "Additional Rent"), being the rent for the Additional Space payable by Alibaba Pictures LLC to the Landlord under the Master Lease Agreement (i.e. the rentable square footage of the Additional Space multiplied by the applicable rate per rentable square footage of approximately US$4.324 per month);

(3) Wavelets shall pay its share of the Operating Costs and the real estate taxes (the "Additional Fees II") for the Subleased Premises and the Additional Space charged bythe Landlord to Alibaba Pictures LLC pursuant to the Master Lease Agreement to Alibaba Pictures LLC. The Additional Fees II for the Subleased Premises shall be US$210.29 per month; and

(4)

apart from a security deposit of US$9,442.32 paid by Wavelets to Alibaba Pictures LLC under the Sublease Agreement II, Wavelets shall, concurrently with the execution of the Renewed Sublease Agreement II, deposit with Alibaba Pictures LLC an additional sum of US$875.73 as security for the faithful performance by Wavelets of all the provisions of the Renewed Sublease Agreement II, so that the total amount of the security deposit held by Alibaba Pictures LLC shall be US$10,318.05.

Payment Terms

Wavelets shall pay the Rent II and the Additional Fees II for the Subleased Premises in advance on the first day of each month during the term of the Renewed Sublease Agreement II upon the receipt of an invoice from Alibaba Pictures LLC.

Alibaba Pictures LLC will invoice Wavelets, on a monthly basis, for the Additional Rent and the Additional Fees II for the Additional Space (if any). Wavelets shall pay such Additional Rent and the Additional Fees II for the Additional Space within thirty (30) days following Alibaba Pictures LLC's delivery of an invoice to Wavelets.

ANNUAL CAPS AND BASIS OF DETERMINATION OF ANNUAL CAPS

The Board has determined (1) the annual caps for the Rent I and the Additional Fees I under the Renewed Sublease Agreement I, and (2) the annual caps for the Rent II, the Additional Rent and the Additional Fees II under the Renewed Sublease Agreement II for the financial years ending March 31, 2022, 2023 and 2024 as follows:

For the financial year ending

March 31, 2022 March 31, 2023 March 31, 2024

(US$) (US$) (US$)

Renewed Sublease Agreement I

Rent I and Additional Fees I	750,000	850,000	950,000
Renewed Sublease Agreement II
Rent II, Additional Rent and	105,103.20	-	-
Additional Fees II
Total amount	855,103.20	850,000	950,000

The above-mentioned annual caps were determined after arm's length negotiations between the relevant parties, with reference to (1) the historical/expected amounts of the rent and other additional fees paid by Alibaba US under the Sublease Agreement I for each of the three financial years ended March 31, 2019 and 2020 and ending March 31, 2021, being US$373,000, US$612,658.11 and US$640,638.88 respectively; (2) the historical/expected amounts of the rent and other additional fees paid by Wavelets under the Sublease Agreement II for each of the three financial years ended March 31, 2019 and 2020 and ending March 31, 2021, being US$24,000, US$52,518.40 and US$41,272.20 respectively; (3) the actual rent charged by the Landlord to Alibaba Pictures LLC, which was determined with reference tothe prevailing market rent of similar properties in the vicinity, pursuant to the terms of the Master Lease Agreement; (4) the estimated sizes of areas in the Master Lease Premises to be leased from Alibaba Pictures LLC under the Renewed Sublease Agreements; and (5) the estimated amounts of the Rent I, the Rent II, the Additional Rent, the Additional Fees I and the Additional Fees II to be payable under the Renewed Sublease Agreements.

REASONS FOR AND BENEFITS OF ENTERING INTO THE RENEWED SUBLEASE AGREEMENTS

The Master Lease Premises are located in the heart of Pasadena, California, USA, a grade A office space for rent. There is a high demand for good quality office space in Southern California with a good rental price. Given the relatively small number of staff of the Group in the USA, the Group considers that continuing to sublease the unused space of the Master Lease Premises will allow the Group to use every square foot to its maximum capacity, generate some extra cash flow, reduce its own rental expenses, and save time and cost to look for new subtenant(s). The extra cash flow can serve as an office maintenance and repairs reserve and funds for future business development. The Group also considers that co-sharing an office with Alibaba US and Wavelets enables the sharing of office support function resources (such as human resources, administrative and information technology support resources) and economies of scale. This also helps lower rental and operating expenses for all parties.

Having reviewed the terms of the Renewed Sublease Agreements, the Directors (including the independent non-executive Directors) are of the view that the terms of the Renewed Sublease Agreements and the relevant annual caps are fair and reasonable, the transactions contemplated thereunder are on normal commercial terms and that the entering into of the Renewed Sublease Agreements is in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

Alibaba US is an indirect wholly-owned subsidiary of AGH and Wavelets is a 30%-controlled company indirectly held by AGH. AGH is the ultimate sole shareholder of Ali CV, which is a controlling shareholder and a connected person of the Company holding approximately 50.26% of the issued share capital of the Company as at the date of this announcement. Accordingly, each of Alibaba US and Wavelets is an associate of Ali CV and hence a connected person of the Company. The entering into of the Renewed Sublease Agreements and the transactions contemplated thereunder constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since the Renewed Sublease Agreements are of a similar nature and have been entered into by the Group with a subsidiary and an associate of AGH within a 12-month period, the transactions contemplated under the Renewed Sublease Agreements shall be aggregated as if they were one transaction pursuant to Rule 14A.81 of the Listing Rules.

As all of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the highest aggregated amount of (i) the annual cap of the Rent I and the Additional Fees I under the Renewed Sublease Agreement I, and (ii) the annual cap of the Rent II, the Additional Rent and the Additional Fees II under the Renewed Sublease Agreement II (as applicable) for a particular financial year are more than 0.1% but are all below 5%, all the transactions contemplated under the Renewed Sublease Agreements are subject to thereporting, announcement and annual review requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

As (i) each of Mr. Fan Luyuan, Mr. Meng Jun and Mr. Xu Hong is an employee of AGH or its subsidiaries, and (ii) Mr. Li Jie is currently taking up a management role in a subsidiary of AGH, they are deemed or may be perceived to have a material interest in the Renewed Sublease Agreements and the transactions contemplated thereunder (including the relevant annual caps). As such, each of Mr. Fan Luyuan, Mr. Meng Jun, Mr. Xu Hong and Mr. Li Jie has abstained from voting on the relevant resolutions of the Board in relation to the Renewed Sublease Agreements and the transactions contemplated thereunder (including the relevant annual caps). Save as disclosed, none of the other Directors has a material interest in the Renewed Sublease Agreements and the transactions contemplated thereunder (including the relevant annual caps), and therefore none of them has abstained from voting on the relevant resolutions passed by the Board.

INFORMATION ON THE COMPANY AND ALIBABA PICTURES LLC

The Company is listed on the Stock Exchange (stock code: 1060). The Company focuses on developing the full business potential of integration and innovative applications of the Internet and traditional film and television industries. The core business of the Company includes three major segments: (1) Internet-based promotion and distribution, (2) content production, and (3) integrated development. These segments encompass (1) the operation of an integrated O2O platform for the promotion and distribution of entertainment content, and the provision of online movie ticketing service to consumers and ticketing issuance system to cinemas; (2) the investment and production of entertainment content, such as film and drama series, both domestically and internationally; and (3) centered around copyrights, the development of professional services ranging from financing, business placement, promotion and distribution to merchandising, respectively.

Alibaba Pictures LLC, being a Delaware limited liability company, is an indirect wholly-owned subsidiary of the Company and an investment holding company.

INFORMATION ON AGH, ALIBABA US AND WAVELETS

AGH is a company incorporated in the Cayman Islands, with its American depositary shares, each representing eight ordinary shares, listed on the New York Stock Exchange (stock symbol: BABA), and its ordinary shares listed on the Main Board of the Stock Exchange (stock code: 9988). Alibaba Group's mission is to make it easy to do business anywhere.

Alibaba Group aims to build the future infrastructure of commerce and envisions that its customers will meet, work and live at Alibaba, and that it will be a good company that will last for 102 years. Alibaba Group's businesses are comprised of core commerce, cloud

computing, digital media and entertainment and innovation initiatives.

Alibaba US, being a Delaware corporation, is an indirect wholly-owned subsidiary of AGH which is principally engaged in e-commerce research and development.

Wavelets, being a Delaware corporation, is a 30%-controlled company indirectly held by AGH. It is principally engaged in the provision of script origination and development services in the USA for Chinese movies, television and internet projects.

DEFINITIONS

In this announcement, save as the context otherwise requires, the defined terms shall have the following meanings:

"30%-controlled company", "associate(s)",

"connected person(s)", "controlling shareholder(s)"

and "subsidiary(ies)"

"Additional Fees I"

each has the meaning ascribed to it under the Listing Ruleshas the meaning ascribed to it under the section headed "RENEWED SUBLEASE AGREEMENT I - Consideration" in this announcement

"Additional Fees II"

has the meaning ascribed to it under the section headed "RENEWED SUBLEASE AGREEMENT II - Consideration" in this announcement

"Additional Rent"

has the meaning ascribed to it under the section headed "RENEWED SUBLEASE AGREEMENT II - Consideration" in this announcement

"Additional Space"

additional work stations located in the Creative Room within the Master Lease Premises

"AGH"

Alibaba Group Holding Limited, a company incorporated in the Cayman Islands, with its American depositary shares, each representing eight ordinary shares, listed on the New York Stock Exchange (stock symbol: BABA), and its ordinary shares listed on the Main Board of the Stock Exchange (stock code: 9988)

"Ali CV"

Ali CV Investment Holding Limited, a company incorporated in the Cayman Islands and an indirect wholly-owned subsidiary of AGH

"Alibaba Group"

AGH and its subsidiaries

"Alibaba Pictures LLC"

Alibaba Pictures LLC, a Delaware limited liability company and an indirect wholly-owned subsidiary of the Company

"Alibaba US"

Alibaba Group (U.S.) Inc., a Delaware corporation and an indirect wholly-owned subsidiary of AGH

"Board"

the board of Directors

"Company"	Alibaba Pictures Group Limited, a company incorporated
in Bermuda with limited liability and the shares of which
are listed on the Main Board of the Stock Exchange (stock
code: 1060)
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Landlord"	the landlord under the Master Lease Agreement
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange
"Master Lease Agreement"	the lease agreement dated June 1, 2015 entered into
between the Landlord and Alibaba Pictures LLC, as
amended by the parties on March 17, 2016, in respect of
the lease of the Master Lease Premises for a term
commencing from November 1, 2015 and ending on
March 31, 2026
"Master Lease Premises"	certain space containing approximately 21,994 rentable
square feet located on the fifth (5th) floor of the building
located at 680 East Colorado Boulevard, Pasadena,
California, the USA
"Operating Costs"	all costs and expenses incurred by the Landlord in
connection with ownership, maintenance and/or operating
of the building located at 680 East Colorado Boulevard,
Pasadena, California, the USA, including but not limited to
costs of heating, cooling, utilities (including any taxes or
impositions thereon)
"PRC"	the People's Republic of China
"Renewed Sublease	the agreement entered into between Alibaba Pictures LLC
Agreement I"	and Alibaba US on March 24, 2021 (Pacific Time) for
three years commencing from April 1, 2021 and ending on
March 31, 2024 to renew the Sublease Agreement I
"Renewed Sublease	the agreement entered into between Alibaba Pictures LLC
Agreement II"	and Wavelets on March 24, 2021 (Pacific Time) for one
year commencing from April 1, 2021 and ending on
March 31, 2022 to renew the Sublease Agreement II
"Renewed Sublease	the Renewed Sublease Agreement I and the Renewed
Agreements"	Sublease Agreement II
8

"Rent I"	has the meaning ascribed to it under the section headed
"RENEWED SUBLEASE AGREEMENT I -
Consideration" in this announcement
"Rent II"	has the meaning ascribed to it under the section headed
"RENEWED SUBLEASE AGREEMENT II -
Consideration" in this announcement
"Share(s)"	ordinary share(s) of HK$0.25 each in the share capital of
the Company
"Shareholder(s)"	the holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Sublease	the sublease agreement entered into between Alibaba
Agreement I"	Pictures LLC and Alibaba US on August 30, 2018 (Pacific
Time) for a term ending on March 31, 2021 in respect of
the sublease of a portion of the Master Lease Premises
"Sublease	the sublease agreement entered into between Alibaba
Agreement II"	Pictures LLC and Wavelets on August 16, 2018 (Pacific
Time) for a term ending on March 31, 2021 in respect of
the sublease of the Subleased Premises and certain
additional space (where required) of the Master Lease
Premises
"Subleased Premises"	a portion (approximately 795.41 rentable square feet) of
the Master Lease Premises
"USA"	the United States of America
"US$"	American dollars, the lawful currency of the USA
"Wavelets"	Wavelets Entertainment, Inc., being a Delaware
corporation, is currently a 30%-controlled company
indirectly held by AGH
"%"	per cent.
Hong Kong, March 25, 2021

On behalf of the Board Alibaba Pictures Group Limited

Fan Luyuan

Chairman & Chief Executive OfficerAs at the date of this announcement, the Board comprises Mr. Fan Luyuan, Mr. Li Jie and Mr. Meng Jun, being the executive Directors; Mr. Xu Hong, being the non-executive Director; and Ms. Song Lixin, Mr. Tong Xiaomeng and Mr. Johnny Chen, being the independent non-executive Directors.