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 -

THE ADVERTISING SERVICES AND IP COMMERCIALIZATION

COOPERATION FRAMEWORK AGREEMENT

ADVERTISING SERVICES AND IP COMMERCIALIZATION COOPERATION FRAMEWORK AGREEMENT

The Board announces that Shanghai Alibaba Pictures, a consolidated subsidiary of the Company, entered into the Advertising Services and IP Commercialization Cooperation Framework Agreement with Youku Tudou, a consolidated entity of AGH, on March 26, 2021 for a term of two years commencing from April 1, 2021 and ending on March 31, 2023. Pursuant to the Advertising Services and IP Commercialization Cooperation Framework Agreement, both parties agreed that Shanghai Alibaba Pictures and/or any of its affiliates will: (1) authorize Youku Tudou and/or any of its affiliates to use IP rights of Shanghai Alibaba Pictures' and/or any of its affiliates' Audiovisual Works on a non-exclusive basis for IP commercialization; and (2) exclusively provide the Advertising Services to Youku Tudou and/or any of its affiliates, in each case subject to the relevant annual caps.

Shanghai Alibaba Pictures and/or any of its affiliates and Youku Tudou and/or any of its affiliates may from time to time enter into specific agreements under the Advertising Services and IP Commercialization Cooperation Framework Agreement to set out the detailed cooperation terms of the IP Commercialization Cooperation.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Youku Tudou is a consolidated entity of AGH and 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. Accordingly, Youku Tudou is an associate of Ali CV and hence a connected person of the Company. The entering into of the Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since all of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the highest annual cap for the total fees receivable by Shanghai Alibaba Pictures and its affiliates for the transactions contemplated under the Advertising Services and IPCommercialization Cooperation Framework Agreement are above 0.1% but below 5%, the entering into of the Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder 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.

Reference is made to the announcement of the Company dated March 26, 2020 in relation to the Advertising Services Cooperation Framework Agreement entered into between Shanghai TPP, a consolidated subsidiary of the Company, and Youku Tudou. As the Advertising Services Cooperation Framework Agreement will expire on March 31, 2021, Shanghai Alibaba Pictures and Youku Tudou entered into the Advertising Services and IP Commercialization Cooperation Framework Agreement on March 26, 2021 to renew, expand and supplement the transactions contemplated under the Advertising Services Cooperation Framework Agreement. Pursuant to the Advertising Services and IP Commercialization Cooperation Framework Agreement, both parties agreed that Shanghai Alibaba Pictures and/or any of its affiliates will: (1) authorize Youku Tudou and/or any of its affiliates to use IP rights of Shanghai Alibaba Pictures' and/or any of its affiliates' Audiovisual Works on a non-exclusive basis for IP commercialization; and (2) exclusively provide the Advertising Services to Youku Tudou and/or any of its affiliates, in each case subject to the relevant annual caps.

ADVERTISING SERVICES AND IP COMMERCIALIZATION COOPERATION FRAMEWORK AGREEMENT

The principal terms of the Advertising Services and IP Commercialization Cooperation Framework Agreement are set out below:

Date:

March 26, 2021

Parties:

  • (1) Shanghai Alibaba Pictures, a consolidated subsidiary of the Company; and

  • (2) Youku Tudou, a consolidated entity of AGH and a connected person of the Company

Term: two years commencing from April 1, 2021 and ending on March 31, 2023

Subject Matter

Pursuant to the Advertising Services and IP Commercialization Cooperation Framework Agreement, both parties agreed that Shanghai Alibaba Pictures and/or any of its affiliates will:

  • (1) authorize Youku Tudou and/or any of its affiliates to use IP rights of Shanghai Alibaba Pictures' and/or any of its affiliates' Audiovisual Works, including but not limited to, titles, logos, lines, identifiable symbols, characters' names and images, visual effects, posters, stills and trailers, on a non-exclusive basis for IP commercialization (the "IP Commercialization Cooperation"); and

  • (2) exclusively provide the Advertising Services to Youku Tudou and/or any of its affiliates.

Shanghai Alibaba Pictures and/or any of its affiliates and Youku Tudou and/or any of its affiliates may from time to time enter into specific agreements under the Advertising Services and IP Commercialization Cooperation Framework Agreement to set out the detailed cooperation terms for the IP Commercialization Cooperation.

Pricing Basis for the IP Commercialization Cooperation

The fees receivable by Shanghai Alibaba Pictures and/or its affiliates from Youku Tudou and/or its affiliates for the IP Commercialization Cooperation shall be at least 70% of the relevant fees receivable by Youku Tudou and/or its affiliates from their respective clients. The specific allocation ratio shall be determined by the parties on an arm's length basis and

with reference to the total costs incurred by Youku Tudou and/or its affiliates for the implementation of the IP Commercialization Cooperation and prevailing market rates for comparable transactions.

In any event, the fees receivable by Shanghai Alibaba Pictures and/or its affiliates from Youku Tudou and/or its affiliates for the IP Commercialization Cooperation will be no less favorable to the Group than the fees that would be receivable from any independent third party(ies) for comparable transactions.

Pricing Basis for the Advertising Services

Youku Tudou shall pay Shanghai Alibaba Pictures a fixed monthly service fee of RMB3,000,000 for the provision of the Advertising Services by Shanghai Alibaba Pictures and/or its affiliates to Youku Tudou and/or its affiliates on an exclusive basis to promote the products or services of clients of Youku Tudou and/or its affiliates during the term of the Advertising Services and IP Commercialization Cooperation Framework Agreement.

The aforesaid fixed monthly service fee receivable by Shanghai Alibaba Pictures was determined based on (1) the comparable market prices for providing similar advertising services to other independent third parties; (2) historical transaction amounts for the provision of similar advertising services by the Group for each of the two financial years ended March 31, 2019 and 2020 and the eleven months ended February 28, 2021, being approximately RMB34,000,000, RMB12,000,000 and RMB11,000,000, respectively; and (3) the expected demand for the Advertising Services from Youku Tudou and/or its affiliates during the term of the Advertising Services and IP Commercialization Cooperation Framework Agreement.

In any event, the fees receivable by Shanghai Alibaba Pictures from Youku Tudou for the Advertising Services will be no less favorable to the Group than the fees that would be receivable from any independent third party(ies) for comparable transactions.

Payment Terms

The fees payable by Youku Tudou and/or its affiliates to Shanghai Alibaba Pictures and/or its affiliates for the IP Commercialization Cooperation and the Advertising Services shall be settled within two months upon confirmation of the corresponding monthly bill by Youku Tudou or its affiliates.

ANNUAL CAPS AND BASIS OF DETERMINATION OF ANNUAL CAPS

The Board has determined the annual caps for the total fees receivable by Shanghai Alibaba Pictures and its affiliates for the IP Commercialization Cooperation and the provision of the Advertising Services contemplated under the Advertising Services and IP Commercialization Cooperation Framework Agreement for each of the two financial years ending on March 31, 2022 and 2023 to be fixed at RMB41,000,000 and RMB46,000,000 respectively.

The annual caps were determined with reference to (1) the historical transaction amount paid by Youku Tudou to the Group in respect of the advertising services under the Advertising Services Cooperation Framework Agreement for the eleven months ended February 28, 2021, being approximately RMB9,200,000; (2) the fixed annual fee of RMB36,000,000 for the Advertising Services; (3) the historical rate of usage and demand for the IP commercialization of clients of Youku Tudou and its affiliates; (4) the anticipated advertising needs of clients of Youku Tudou and its affiliates on other comparable platforms; and (5) an additional buffer of a certain percentage on top to provide for operational flexibility and potential increment in the transaction volume with respect to the IP Commercialization Cooperation.

REASONS FOR AND BENEFITS OF ENTERING INTO THE ADVERTISING SERVICES AND IP COMMERCIALIZATION COOPERATION FRAMEWORK AGREEMENT

As a company which operates a leading online video platform in the PRC, Youku boasts a large client base for brand advertising and an experienced sales team for advertising in the cultural and entertainment industry. In light of the overlapping client bases between Youku and the Group's online ticketing platform - Tao Piao Piao, the Group is of the view that the entering into of the Advertising Services and IP Commercialization Cooperation Framework Agreement would help Tao Piao Piao maximize the commercial value of its online platforms and offline channels with less resources.

Having reviewed the terms of the Advertising Services and IP Commercialization Cooperation Framework Agreement, the Directors (including the independent non-executive Directors) are of the view that the terms of the Advertising Services and IP Commercialization Cooperation Framework Agreement and the annual caps are fair and reasonable, the transactions contemplated thereunder are on normal commercial terms and that the entering into of the Advertising Services and IP Commercialization Cooperation Framework Agreement 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

As at the date of this announcement, Youku Tudou is a consolidated entity of AGH and 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. Accordingly, Youku Tudou is an associate of Ali CV and hence a connected person of the Company. The entering into of the Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Since all of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the highest annual cap for the total fees receivable by Shanghai Alibaba Pictures and its affiliates for the transactions contemplated under the Advertising Services and IP Commercialization Cooperation Framework Agreement are above 0.1% but below 5%, the entering into of the Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder 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.

As (1) each of Mr. Fan Luyuan, Mr. Meng Jun and Mr. Xu Hong is an employee of AGH or its subsidiaries, and (2) 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 Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder (including the 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 resolution(s) of the Board in relation to the Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder (including the annual caps). Save as disclosed above, none of the other Directors has a material interest in the Advertising Services and IP Commercialization Cooperation Framework Agreement and the transactions contemplated thereunder (including the annual caps), and therefore none of them has abstained from voting on the relevant resolution(s) passed by the Board.

INFORMATION ON THE COMPANY AND SHANGHAI ALIBABA PICTURES

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.

Shanghai Alibaba Pictures, being a company established under the laws of the PRC, is a consolidated subsidiary of the Company which is principally engaged in investment in and production of films.

INFORMATION ON AGH AND YOUKU TUDOU

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.

Youku Tudou, being a company established under the laws of the PRC, is a consolidated entity of AGH which is principally engaged in advertising agency, advertising production and distribution, programme production, copyright procurement or distribution.

DEFINITIONS

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

"Advertising Services"

the advertising services provided by Shanghai Alibaba Pictures and/or its affiliates to Youku Tudou and/or its affiliates for placing advertisements (excluding those relating to movies) on the ticketing platforms and channels operated by Shanghai Alibaba Pictures or its affiliates to promote the products or services of clients of Youku Tudou and/or its affiliates

"Advertising Services and IP Commercialization Cooperation Framework Agreement"

the advertising services and IP commercialization cooperation framework agreement entered into between Shanghai Alibaba Pictures and Youku Tudou on March 26, 2021 for the IP Commercialization Cooperation and the provision of the Advertising Services

"Advertising

Services Cooperation Framework Agreement"

the advertising services cooperation framework agreement entered into between Youku Tudou and Shanghai TPP on March 26, 2020 for the promotion and marketing of the products or services of the clients of Youku Tudou or its affiliates on the ticketing platform and channels operated by Shanghai TPP or its affiliates

"affiliate(s)"

in relation to an entity, it means any other entity controlling and controlled by or under common control with such entity, and the term "control" means directly or indirectly holding the majority of the shareholding, voting rights or management rights

"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

"associate(s)",

each has the meaning ascribed to it under the Listing

"connected person(s)",

Rules

"controlling shareholder(s)" and

"subsidiary(ies)"

"Audiovisual Works"

movies, other works produced by filming methods

similar to those of movies and any other works with

simultaneous display of visual and audio content,

including but not limited to, cinema movies, online

movies, television dramas, online dramas, animation

films, variety shows, stage plays, short-form videos,

live videos and other forms of audiovisual works,

broadcasted through any channels, including but not

limited to, live streaming, online streaming, in

cinemas and on television

"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

"IP"

intellectual property

"IP

has the meaning ascribed to it under the section

Commercialization

headed "ADVERTISING SERVICES AND IP

Cooperation"

COMMERCIALIZATION COOPERATION

FRAMEWORK AGREEMENT - Subject Matter" in

this announcement

"Listing Rules"

the Rules Governing the Listing of Securities on the

Stock Exchange

"PRC"

the People's Republic of China

"RMB"

Renminbi, the lawful currency of the PRC

7

"Shanghai Alibaba Pictures"

"Shanghai TPP"

上海阿里巴巴影業有限公司 (Shanghai Alibaba Pictures Co., Ltd.*), a company established under the laws of the PRC with limited liability and a consolidated subsidiary of the Company 上海淘票票影視文化有限公司 (Shanghai Tao Piao Piao Movie & TV Culture Co., Ltd.*), a consolidated subsidiary of the Company established under the laws of the PRC

"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

"Tao Piao Piao"

an online ticketing platform in the PRC operated by the Group

"Youku"

an online video service platform operated by Youku Tudou's affiliate

"Youku Tudou"

上海全土豆文化傳播有限公司 (Shanghai Quan Tudou Cultural Communication Co., Ltd.*), a company established under the laws of the PRC and a consolidated entity of AGH

"%"

* For identification purposes only

Hong Kong, March 26, 2021

per cent

On behalf of the Board Alibaba Pictures Group Limited

Fan Luyuan

Chairman & Chief Executive Officer

As 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.

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Alibaba Pictures Group Limited published this content on 26 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2021 09:58:09 UTC.