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Company Report Youku Tudou 优酷土豆（YOKU US） GTJA Research 国泰君安研究

dramas could be streamed 3Q15. bestreamed in could dramas Korea and TVB TV dramas are still in SARFT in still are dramas TV andTVB Korea obstacle up around Live Revenue 19.8% Laifeng reach 1Q15, qoq. from might ( Live Laifeng live video, Interactive RMB60.0mn. Youku quarter, last ’ According to Youku to ’ According RMB120.8mn, RMB120.8mn, entertainment live and operation interactive joint game r Consume revenue was slightly. boosted revenue Se Source: Figure Source: Figure Youkusheet, of has set upnew account revenue, a copyrights, exchanges of licensed and nonmonetary to revisions certain statements reflecting financial consolidated Youku has cha yoy accelerates. monetization video RMB1, Youku Tudou(Youku) RMB

e mn RMB mn RMB

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 , above expectations above , th 500 10,000 15,000 20,000 25,000 30,000 - 5,000 mn, up706%yoy.mn, 120.8 Non e the Company, Guotai Junan International. Junan Company,the Guotai International. Junan Company,the Guotai - las 3 1 056.2 : :

t for membership growth growth membership for

growth yoy entertainment) Consumerrevenues (subscription-based service,mobile game joint operationinteractive and live Youku You 2014 2010 RMB83.2 barter sublicensing revenues to non GAAP revenue. In balance balance nonGAAP 1Q15 In revenue. Youku to revenues in sublicensing barter has addedRMB83.2 page 156 156 387 387 revenue mn, up mn, ku 2011 918 918 fo up 708%yoy, for accounting up73.3% qoq, r ’ ’ 137.1% 2015E

s Consumer Revenue Projection s Revenue Projection nged theaccounting principles. disclaimer 782 782 2012 1,910 1,910 399.6 108.1% s membership reached 1.0mn and we estim 1.0mn reached s membership , Youku revenue 2Q15 of s guidance ’ 5

% 2013 3,069 3,069 grew fast. Youku fast. grew ’ 0 2016E 1 Revenue . ’ 60.7 , 8 524 524 s

. 37.6% % yoy, 2014 % 4

94.9% , 1 223 223

Q1 52.8 2015E 6,451 6,451 2017E 2

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growth yoy

results 39.6% 3% 3% 2016E 50.6% 9 comes from from comes , 716 716 GAAP reached net RMB income

2 2018E

r revenue reached revenue r Consume consensus. and market expectations our above 2,894 2,894 2017E 13,603 13,603 Q15 Q15 39.0

36.0% %

s were were 40.0% 2018E 18,902 18,902 consumer revenue non GAAP 2019E licensed copyrights licensed 3,937 3,937 2019E 26 38.4% , 36.0 ’ 159 159 basically in line with our expectations. NonGAAP s Review process. s Review the

% 0% 20% 40% 60% 80% 100% 120% 140% 160% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 来疯直播 ), has SARFT

Certain Certain s include mainly revenue

s further Source: Source: Projection Figure Source: Figure s consumer revenue might reach around RMB160mn. In RMB160mn. around reach might revenue s consumer

mn RMB ’ 300,000 100,000 150,000 200,000 250,000

mn RMB ’ Youku dramas. TV imported in s newpolicy 50,000 10,000 15,000 20,000 25,000 11.4% expectations. our non above of GAAP revenue, 5,000 adjustments were made to the Company's historical historical Company's the to were made adjustments - . 0 the Company, Guotai Junan International. Junan Company,the Guotai International. Junan Company,the Guotai . as % Revenueas of total entertainment) Consumer (subscription-based revenues service,game and mobile interactive operation joint live guidance 4 2 In 1Q15, Youku 1Q15, In ’

1.9 14 2010 : : 1Q14 Compared to old accounting principles, old accounting Compared to described described in the Report. 2014 Annual

its accounting treatment for licensed copyrights copyrights licensed for treatment accounting its ated , ’ Youku expect We Youku Youku % 988 contributed contributed

-517.3 2011 3.1% 30,000 2Q14 that 127.6% ’ ’ s Quarter Consumer Revenue s Net Ad Revenue Projection 2012 to reach around RMB1. around reach to Youku mobile mobile Youku below expectations. mn, 41,800

3.8% 3Q14 90.0% membership revenue reached around around reached revenue membership RMB30~50mn. We think think We RMB30~50mn. Net ad revenue 2013

sharing revenues of RMB24.1mn in RMB24.1mn revenues of sharing 5.4% based service, mobile mobile service, -based subscription 67.1% 69,700 4Q14 2014 s consumer revenue reached revenue s consumer 34.1 US, US, new s 10.6 120 2015E 1Q15 44.2% % , % 800 growth yoy 2016E 45.0 11.1% 168,404 2Q15E %

2017E 42.0 12.3 218 3Q15E % Korea and TVB TV andTVB Korea % , 925 2018E 41.0% 5 2bn, up58.5 2bn, 273,656 13.6%

4Q15E Revenue wasRevenue

2019E 40.0%

the s new new s For GAAP GAAP For Page 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 0% 20% 40% 60% 80% 100% 120% 140%

Youku largest largest 2 of of

US, US,

10 % ’ s

Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015 share. 2013. Five films of working with Alibaba Pictures to develop film IP. in 3 in i also are promoting andMX4, Blue Meizu Director), and Karwei Wang (3 Times HKFA Best Director), and 1 famous female executive producer: Angie Chai. Alibaba Alibaba Pictures’ Chai. Angie producer: executive female 1 famous and Director), HKFA Best Times (3 Wang Karwei and Director), Stephen Chow Kong (Hong Film Awards (HKFA) Best Actor andBest Director in 2002), Peter Chan (2 Times HKFA Best every become a key bargaining business for Alibaba Pi Cloud, especially for postfilm production, which could save 40% cost and 90% production Aliyuntime. render cloud might box office of RMB3.0bn. 4 Alibaba Pictures. Entertainment Bao has financed over 10 films in 2014, with around RMB330 financing amount Se Y Pictures. Alibaba with synergy more Expect Source: Figure ads display bid to producers, game PC robust traffic, and have mobile portals ads andpause display ads. for especially portals RTB6M14, in provide to announced video for Alimama Youku helped Alimama to set Real up writers, to create scri established Literature, Alibaba an open

PGC and UGC videos have accounted PGC and UGC 50%offor accounted total RTB have videos views. video monetize PGC monetize to further, ratio. was with sales and lower expense increase rtion its propo expected revenue increase to 3) More competition from Tencent. from competition More 3) ever. than ’ audiences didn some dramas, Chinese of TV lots reviewproSARFT vacation. Festival Spring Spring as during watch during they united abroad to travel Festivals And TV programs. Chinese might many DVV.yoy, total 75%of up15.6% 1Q15, 675mn in reached DVV 75%of Mobile with video mobile 900mn, views. 1Q15 reached in (DVV) Totaltraffic growth down. slow beg to an HBO TV dramas RMB299 China provide and to with wasYunOS Telecom Korea Currently, working TVB content. unique TV drama en its strength could Youku shares gain until to market continue might Tencent to Tencent videos. traffic more e 1,000

100 200 300 400 500 600 700 800 900 rd th -

, e

link of production: film link

the Company, Guotai Junan International. Junan Company,the Guotai 4 las Famous movie star movie Famous 5 4Q12 th 100 100

: shareholder Vicki Zhao, t , & 5 , &

Youku page brand small 1Q13 Average Daily VideoViews (DVV) Quarter in the (mn) 100 100 conversion th fo r ’ tier city users and rural areas to acquire more low income new mobile users. new income low mobile more acquire areas to users city tier andrural and 2Q13

s Daily Video View Growth 200 200 disclaimer Game of Thrones the five directors have generated cumulative box office revenue of RMB3.2bn in 2013, over 10% market market 10% over 2013, in RMB3.2bn of revenue office box cumulative generated have directors five the 100.0% cess. New hot TV dramas are key drivers of video portal traffic growth. Although Youku bought bought Youku Although growth. traffic portal of video drivers key are dramas TV New hot cess. pts with Alibaba Pictures. 3 3Q13 UGC short videos. videos. short UGC 250 250 25.0% smart phones 3 to 20.0% 4Q13 ) Post p ) Post We think there might be 3 reasons: 3 be might there think We

rate 300 300 -

Jet Li ( Li Jet 1) Signed with famous directors. 2) 2) 1Q14 . 400 400

SARFT Youku 5%of 1Q15 RTB in total that has announced for accounted management the 33.3% roduction. 2Q14 600 600

李连杰 ne 50.0

to attract new audiences. WeChat, with MAU of 400mn, around newtoWeChat, attract audiences. . w HKFA Best Actress, was also a director, with So Young box office RMB718mn of in platform

3Q14 % 16.7 700 700 ’ Alimama ’ s new policy. growthqoq % ) is Alibaba Pictures

4Q14 14.3 800 800 rd

n these areas. We think Youku should promote with with andMeizu promote YunOS should Youku n think We these areas. Aliyun has cooperated with Ray Vision to create a video cloud, called Render Render called cloud, avideo create to Vision Ray with cooperated has Aliyun their their , - %

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ctures to cooperate with famous directors. directors. famous with cooperate to ctures 4 under UCWeb, provide to IP ) 1Q15 12.5% 900 900 th F According to the management, Youku average daily video views Youku views video daily management, average the to According s big data, Data Management Platform (DMP) Platform Data Management data, s big , & 5 , inance e Bidding (RTB) system to monetize long tail short videos. RTB might attract medium and small ad and small RTBmedium attract might

0% 20% 40% 60% 80% 100% 120% d dramas and introduce China TV more far hasTencent bought revealed revealed management ouku t like China TV dramas and they might visit Youku much Youku less much TV dramas and they might visit China like t th

Alibaba Pictures have already built up

tier city users and rural areas. Meizu, with strong with strong areas. end low Meizu, users city andrural tier Youku’ the budget Source: Source: Figure

100 200 300 400 500 600 700 800 Alibaba Group has paid RMB200mn to 3 famous directors: directors: 3famous to RMB200mn paid has Group Alibaba independent director. 2 director. independent - s new US, Korea and TVB TV dramas are still in still TV dramas are and TVB Korea US, s new 1) Seasonality.1) the Company, Guotai Junan International. Junan Company,the Guotai 6 4Q12 : . Youku

Alibaba Group tried to inject Entertainment Bao into into Bao Entertainment inject to tried Group Alibaba 1Q13 30 30 AverageMobile Daily VideoView (DVV) in the Quarter(mn) development ’ 2Q13 s Mobile Daily Video View Growth 84 84 180.0% 3Q13 123 123

might Chinese might watch fewer videos videos fewer watch Chinese might 45.8% 46.9% 4Q13 180 180 ) Playwriting. that Youkuthat

5) Marketing before distribution. opportunities with online online with opportunities

1Q14 be very helpful for Youku helpful for be very to 248 248 37.8% vertisers, such as mobile such as mobile vertisers, competitive 2Q14 414 414 66.9

3Q14 % 20.0 497 497

's

could help RTB help the could Currently, in 1Q15,Currently, in

%

Alibaba Group has Heyi Pictures Pictures Heyi 4Q14 17.5% growthqoq 584 584 edges in in edges might 1Q15 15.6 675 675

% and related related and Page

As video As video 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%

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Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015 service for HBO TV subscribers and HBO Nowi HBO and HBO subscribers TV for service are H high Currently,level. amazing are Video, HBO Amazon Instant its Nowcompetitors main HBO & and GO, Hulu. Youku and Netflix an portal, streaming video largest the Netflix, with talking Pictures based SaaS platform in the future. share of cinemaslarge (Annual Box Office above RMB10mn). acquired Yueke Software ( to to integrate before it could produce 8~10 high quality films annually. general, In games. online create to help could Game 9 and sales product film Research. eGuan to according sales, tickets film China of shares 18.7% has Eye, Cat Meituan with along sales, ticket film

Se and Starz. Warner recently. Currently, has started Netflix Zealand. and over 50 countries in stream to announced videos Netflix yoy, up29.3% world, the US, withup17.2% 40mn in upyoy, yoy. US, outside 63.6% regions and20mn the in portal the streaming in world. video t larges the is Netflix Source: Figure Media, the largest film distributor China,in with 2014 box office RMB3.2bn of in C Film 6) distribution. before films new its promote to Pictures Alibaba Group has acquired oflots mobile media: Weibo, Youku Tudou, Xiami Music and Ttpod, which could help Alibaba ulu are ownedulu Disney, by N e th big potential competitor big potential e Guotai Junan International. International. Junan Company,the Guotai las 7 ’ content library to stream in the net. Wasu Media might help its content library to come into TV. Currently, Youku TV. Currently, into come to library content its help might Media Wasu net. the in stream to library content : Synergy: with Alibaba Pictures t

page In 1Q15, Netflix announced to stream 10bnIn Netflix to 1Q15, announced stream or hours, 1.9 per hour account, day subscriber per an fo r

’ s operation in the future. the in operation s disclaimer

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with unique content library from Time video anonline from Warner. library is HBO GO content unique with BCUniversal, and with 9mn Fox, subscribers BCUniversal,

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shar Alibaba Pictures Pictures’ 9) IP development. In 1Q15, Netflix 1Q15, In 10) Theatre Management System. Management Theatre 10) es of China film ticket sales and 40.9% of online market market online of 40.9% and sales ticket film China of es has just begun business has just video

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-

236.5%

46.9% 45.7% 71.2% - 1Q12 (103) 0.5% 24.4 24.4 26.5 10.0 10.1 22.0 23.4 870 870 258 561 452 550 146 172 320 361 507 361 507 2.4 2.4 3.1 (5) 55 91 43 2

in in

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55 8 3

vehicle

has come into the board of directors of Youku. of directors of board the has into come - 54.2% 68.3% 46.1% 46.6% 1,024 1,024 1Q13 0.3% 27.9 27.9 29.2 34.2 34.2 36.3 (77) 165 165 142 437 639 437 639 360 360 693 602 781 113 125 243 8.0 8.0 6.3 7.1 7.8 7.8 54 the the 3 4

previous 18.5% interests. Alibaba Group Director Group Director Alibaba Lu 18.5% previous interests.

- 39.7% 67.0% 45.8% 46.7% (UAV) UGC Videos. UGC(UAV) Videos. 1,069 1,069 2Q13 2.8% 28.6 28.6 29.8 35.6 35.6 37.6 (66) 183 183 166 449 671 449 671 384 384 720 632 837 109 121 232 7.4 7.4 7.5 7.0 7.7 49 29 3

vide UGC videos. UGC videos. vide - 40.6% 67.1% 44.8% 48.1% 1,106 1,106 3Q13 2.9% 29.9 29.9 31.1 38.0 38.0 40.3 (74) 208 208 183 471 701 471 701 396 396 750 679 884 107 112 222 7.0 7.0 7.1 8.1 9.2 49 32 s reholder 3

- 25.9% 66.5% 45.2% 51.7% 1,175 1,175 4Q13 4.1% 10.9 10.9 31.7 33.4 41.4 41.4 44.4 (57) 219 219 221 493 741 493 741 435 435 800 711 962 110 100 213 6.8 6.8 6.9 9.7 60 48 3

- 13. 64.7% 45.2% 47.7% of Youku. and Group Alibaba 1,270 1,270 1,066 1Q14 4.2% 11.8 11.8 12.7 34.4 35.7 46.1 46.1 48.4 (35) 245 245 267 517 799 517 799 482 482 855 762 107 204 1% 6.5 6.5 6.7 Recently, Youku has signed hasYouku signed Recently, 57 53 98 0

Alipay, Alitrip, Qtravel ( Qtravel Alitrip, Alipay,

65.2% 46.3% 47.7% - 1,340 1,340 1,146 2Q14 5.0% 5.3% 12.9 12.9 13.8 35.1 36.2 48.0 48.0 50.0 (15) 267 267 307 546 838 546 838 531 531 894 813 102 195 6.3 6.3 6.2 6.2 56 71 93 0

64.4% 43.7% 47.9% - 1,409 1,409 1,223 3Q14 8.9% 4.2% 14.4 14.4 15.8 36.3 37.2 50.7 50.7 53.1 (31) 292 292 346 565 877 565 877 5 962 857 187 5.9 5.9 6.0 34 34 85 59 89 97 0

Youku and

- 20.3% 62.5% 37.9% 49.3% Page 1,485 1,485 1,034 1 4Q14 5.6% 16.8 16.8 18.3 37.7 39.1 ,305 ,305 54.5 57.4 (79) 116 116 350 388 573 917 573 917 495 495 923 179 5.7 5.7 5.8 83 89 91 0

6

穷游 of of - 37.0% 48.8% 15.6% 59.2% 1,573 1,573 1,090 1,400 1Q15 1.5% 59.6 59.6 62.3 19.3 20.9 40.3 41.4 10 (65) 518 518 958 173 105 375 415 583 985 583 985 5.5 5.5 5.6 24 85 89 0

Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015 Company Yy Inc Yy Se market ad Video Online market Video Online market ad Online China Table : Source Average Weighted Average Simple Ltd Media New Phoenix Inc Yy Inc Tudou Youku Information Internet Leshi Inc Netflix W Average Simple Ltd Media New Phoenix Inc Tudou Youku Information Interne Leshi Inc Netflix Table Raise more synergy with Alibaba Pictures and Netflix to fuel long term growth. run, short growth. In longterm to fuel andNetflix Pictures Alibaba with synergy more respectively increase increase

eighted Average eighted Breakdown - e - Adr Online in Online Others VAS Video Sponsor Ads, Banner Ads and other and Banner Ads Ads, Sponsor distribution Copyrights revenue Ad B Adr

Online Video ad as % of as % ad Online Video PC video ad video PC ad video Mobile Online in ad video PC ad video Mobile - - reakdown% Adr Adr th growth YoY growth YoY growth Online

e

2 , Bloomberg - -

A A 3 las T : Peers C t growth YoYgrowth YoYgrowth YoYgrowth

- : China Online video ad video arget arget - Video M

t video ad video

- -

Adr Adr page further

.

Our arket

fo Yoku US Price

Guotai Junan International Junan Guotai 300104 300104 r YY US FENG FENG Stock Stock 1,796 1,796 1,122 3,609

omparison NFLX NFLX Code 1,111 1,111 disclaimer 17 earnings per ADR -17 earningsADR per . Our FY15

13 806

CH

US US total online ad market ad online total TP TP A

to USD26.00 is USD26.00, representing 3.2x 2016E 3.2x representing USD26.00, is Currency

Video Market Video Revenue (mn RMB) (mn Revenue

1,424 1,424 1,839 3,069 2,233 4,375

USD USD USD CNY USD 14F

621.87 621.87 1,653 1,653 3,617 6,019 5,505 4,011 66.66 30.75 80.39 price mn RMB mn RMB mn RMB mn mn RMB mn RMB mn RMB 7.36 7.36 Last Last 15F , % % % % % % % % % % % % %

Ma

and and

y

25

Cap Market

185,670.0 185,670.0 292,271.3 downgrade to ‘ th 29,289.7 29,289.7 46,088.7 mn RMB mn

4,395.5 4,395.5 2015. 14,078 14,078 1,865 1,865 5,469 6,007 6,776 32,550 32,550 68.4% 51.5% 48.5 21.4% 16F 3,140 3,140 1,042 1,042 2,148 3.8% 6.4% 6.6% 2010

%

170.1 170.1 129.0 319.3 131.5% 17.1 17.1 50.5 51,300 51,300 13.1% 67.8% 99.7% 57.6% 12A 12A 43.3% 56.7% 97.9% 15.7% n.a. n.a. 6.1 6.1 4.3 2.6 3.7 2.0 6.3 6. 4,251 4,251 6,270 2,411 3.4% 8.3% 2011 9

s RMB are estimate Neutral 173.8 173.8 16.5 16.5 93.2 75.9 16.2 37. 13 13 n.a. n.a. 3.4 3.4 1.0 9.7 9.7 6.4 2.1 8.9 A A 6 Adjusted PE

PS. Fair Valuation. Fair PS. 77,310 77,310 98.8% 97.1% 28.0% 72.0% 56.6% 12 72.5% 46.4% 50.7% 11.0% PB 6,466 6,466 4,793 6,656 9,180 136.9 136.9 2.9% 4.3% 8.6% 2012 28.8 28.8 73.0 57.0 22.6 .1% 15.6 11.4 190 n.a. n.a. n.a. 14F 14F ’

0.7 0.7 9.9 9.9 2.0 8.2

investment rating. investment

128.8 128.8 243.7 110,000 152.6% 33.5 33.5 92.0 13.4 19.0 19.1 19.1 10.1 11.4 13,590 13,590 n.a. n.a. 15F 15F 44.1% 65.2% 95.1% 19.2% 80.8% 47.2% 14.2% 72.1% 48.0% 42.3% 0.5 0.5 2.6 2.7 2.7 9,318 9,318 7,920 9,798 4.9% 5.1% 8.6% 8.9% 2013 480

120.6 120.6 37.9 37.9 64.0 48.3 10.3 13.8 21.8 21.8 12.0 16.1 8.130, RMB -8.130, n.a. n.a. 16F 16F 0.3 0.3 3.1 2.3 2.3 154,000 154,000 568.8% 12,320 12,320 15,197 23,970 11,987 2014E 28.6% 55.6% 78.9% 21.1% 18.9% 81.1% 55.1% 25.8% 63.4% 76.4% 40.0%

3,21 5.1% 5.7% 9.9%

0 ‘

Neutral

12,784.9 12,784.9 23,918.1 6,205.9 6,205.9 136.0 136.0 730.5

209,300 209,300 125.9% 38.9 38.9 We think Youku could create think Youku create could We 12A 12A n.a. 15,589 15,589 18,000 22,839 36,310

2015E 30.0% 46.1% 68.3% 31.7% 21.2% 78.8% 50.3% 27.1% 62.9% 51.5% 10.9% 35.9% 8.4 8.4 7.0 1.4 4.0 4.0 4.3 1.6 3.3 content cost pressure might pressure cost might content 7,250 7,250 5.4% 4.6%

’ -6.846 .

353.2 353.2 232.2 515.3 340.6 PS (Price to Sales) to (Price PS 66.6 66.6 14.1 58.9 26.1 26.1 1 13 13 n.a. 8.8 8.8 9.9 9.9 4.9 3.1 3.1 9.4 272,400 272,400 A A 18,766 18,766 13,470 25,061 32,236 51,660 2016E GAAP PE 20.4% 85.8% 39.2% 58.2% 41.8% 22.3% 77.7% 41.1% 28.1% 62.4% 42.3% 30.1% 11.8%

5.6% 3.9%

and

230.5 230.5 155.7 402.0 181.8

24.7 24.7 13.8 25.4 12.9 12.9 n.a. 14F 14F 9.2 9.2 6.8 9.9 9.9 2.1 6.5 332,700 332,700

RMB 20,771 20,771 21,920 32,272 42,691 69,530 2017E

10.7% 62.7% 28.8% 48.7% 51.3% 24.4% 75.6% 32.4% 29.2% 61.4% 34.6% 12.8% 22.1% 5.9% 3.5% Page 281.3 281.3 166.0 243.6 379.7 10.6 10.6 20.5 20.2 n.a. 15F 15F 6.1 5.6 7.2 7.2 5.7 1.9 4.3

-6.010,

7

393,000 393,000 of of 22,268 22,268 31,810 40,086 54,078 89,980 2018E 45.1% 24.2% 41.2% 58.8% 25.9% 74.1% 26.7% 30.4% 60.1% 29.4% 13.8% 18.1% 142.8 142.8 154.0 173.0 7.2% 6.2% 3.3% 88.3 88.3 14.9 11.2 10 n.a. 16F 16F 5.3 5.3 4.2 1.6 3.2 4.5 7.2 4.5

Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015 Se Source: Non Non Non margin net margin operating margin gross % Margin Development Product Administrative and General Marketing and Sales costs content equipment other and servers of depreciation costs bandwidth surcharges and taxes business added, value revenue of cost revenues net % YoY rate Key growth Stock non non non - Non costs content equipment other and servers of depreciation costs bandwidth added value breakdown revenue of cost shares mn diluted and basic in computation, used ADS Non RMB/ADS and diluted basic ADS, per loss Net (Loss) Income Net Tax Income for Provision Taxes before Earnings Net (Loss), Income Other cost finance net Income Operating Development Product Administrative and General Marketing and Sales profit Gross Revenues of Cost Revenues Net Revenues RMB mn Table revenue ad net iQiyi You Source: Source:

------e GAA profit operating GAAP profit gross GAAP revenue ad net ku GAAP results GAAP net margin net GAAP operating GAAP margin gross GAAP RMB/ADS ADS per Profit loss)/ (net GAAP market shares% market shares% market -

Based compensation compensation Based th

P net profit net P

e

4

the Company, Guotai Junan International. Junan Company,the Guotai , business taxes and surcharges and taxes business , las

: Youku: ProjectionResult Quarter iResearch 1M15, Guotai Junan International. Junan Guotai 1M15, iResearch

growth YoYgrowth YoYgrowth

t

page

margin

fo

r disclaimer

mn RMB mn RMB - - - - - (0.936) (1.049)

23.2% 10.3% 24.0% 32.4% 10.3% 25.4% 28.7% 28.1% 50.1 20.3% 20.5% 11.7% 22.7% 17.1% 1Q14 (157) (159) (176) (176) (180) (186) (643) 6.0% % % % % (80) (46) 357 202 168 132 775

(2) 70 90 20 63

% 0 6

- - (0.407) (0.882)

10.3% 22.2% 37.8% 34.5% 30.1% 20.5% 33.2% 27.2% 23.4% 17.2% 18.5% 21.8% - - 2Q (164) (164) (178) (213) (750) 7.8% 7.9% 9.3%

(76) (89) (99) (74) 224 418 214 186 209 959 (0) 14 82 29 90 10 3 17.4%

374

(0.496) (0.877) - - -

11.5% 23.5% 16.4% 22.3% 10.2% 25.9% 39.6% 26.4% 29.5% 10.9% 29.0% 18.6%

- 1,107 1,107 3Q14 (103) (127) (181) (181) (206) (112) (287) (860) 9.3% 4.8% 1.1% (53) 261 502 230 207 247 72 30 98 23 127.6% 0 2 20.0%

851

(1.128) (1.650) (1,048) - - - - -

17.1% 16.3% 20.4% 25.1% 24.3% 18.3% 26.8% 72.8% 21.1% 52.2% 48.5% 62.0% 42.3%

1,282 1,282 4Q14 (322) (270) (311) (123) (344) (220) (209) 9.6% 6.1% (52) (79) 195 235 261 611 272 115 19 23 86 29

(2.488) (2.672) (1,138) - - - -

42.3% 44.5% 45.4% 47.6% 12.2% 28.1% 87.6% 70.3% 52.0% 56.3% 77.1% 47.1% - 10.2% 24.3% 90.0% 1,139 1,139 1Q15 (517) (517) (543) (140) (320) (482) (507) 2.9% 0.1% 7.4% 1,617 1,617 (84 (33) 194 669 307 (0) 680 19 80 34 98 6 1 )

(1.2 (1.726) (1,307) - - - - 2Q15E

15.3% 17.8% 14.9% 21.0% 23.5% 14.0% 24.0% 84.4% 28.1% 63.8% 24.7% 74.3% 58.5% 1,520 1,520 120.6% (320) (320) (357) (114) (365) (233) (270) 7.5% 6.0% (91) 15.3% 27.6% 67.1% 185 213 227 771 350 112 57) 1,500 1,500 2,702 31 84 37 0 6

(1.188) (1.674) (1,515) - - - - 3Q15E

13.7% 15.9% 15.9% 19.3% 15.0% 23.0% 78.7% 30.2% 75.2% 30.9% 76.3% 61.1% 21.5% 1,783 1,783 (344) (344) (383) (134) (107) (410) (244) (283) 7.5% 6.0% 206 267 104.7% 284 897 403 128 33 97 40 20.2% 23.8% 34.1% 0 6 3,070 3,623

(1.387) (1.957) (1,708) - - - - 4Q15E

13.4% 15.0% 15.9% 18.9% 20.5% 15.0% 22.0% 66.0% 42.7% 65.4% 23.4% 63.0% 56.7% 2,009 2,009 1,014 1,014 (379) (379) (412) (151) (121) (442) (269) (301) 7.5% 6.0% 194 301 107 320 450 143 26 41 0 6 22.9% 44.2%

5,225 5,225

(0.823) (1.361) (1,485) - - - 1Q16E

10.7% 17.4% 15.4% 16.8% 16.0% 20.0% 32.1% 26.7% 24.5% 30.5% 55.2% - 1,768 1,768

(271) (271) (297) (124) (103) (354) (164) (190) 9.3% 7.0% 5.8% 0.3% 199 283 308 884 389 122 19 99 34 0 6

23.5% 45.0% 7,576 7,576

(1.099) (1.856) (2,024) - - 2Q16E

17.4% 14.7% 15.8% 16.0% 19.0% 56.4% 21.9% 50.2% 4 54.8% 58.5% - - 2,410 2,410 1,206 1,206 (354) (354) (381) (169) (140) (458) (210) (236) 8.7% 9.8% 7.0% 5.8% 7.6% 191 386 133 419 526 165

20 45

0 7

10,758

25.2% 42.0% (0.970) (1.704) (2,206) - - 3Q16E

17.4% 13.7% 14.8% 16.0% 18.0% 46.8% 17.7% 41.2% 38.6% 45.5% 47.3% Page - - 2,626 2,626 1,316 1,316 (361) (361) (389) (184) (152) (473) (205) (233) 7.8% 8.9% 7.0% 5.8% 212 420 143 457 568 177 21 47

0 7

8

of of 15,168 15,168 28.0% 41.0% - - (1.071) (1.925) (2,447) 4Q16E 17.4% 13.2% 16.0% 18.0% 44.2% 19.6% 38.9% 36.4% 43.3% 45.0% 14.3% - - 1,463 1,463 2,913 (214) (246) (384) (384) (417) (189) (169) (524) 7.3% 8.4% 6.5% 5.8% 10 156 507 625 194 199 466 49 26 0 7

Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015 Se Source: EB BB Cash in Changes Net Flow Cash Cash on Effect Rate Exchange Foreign Adjustments Other Activities Financing from Flow Cash others Option Stock Employee of Exercise repurchase Share O Secondary and IPO from Proceeds Short on Repayments Principal Long on Repayment Principal Financing Activities Investing from Flow Cash Others Investment Assets Intangible of Acquisition copyrights of licensed Acquisition Equipment and Property of Acquisition expenditure Capital Activities Investing Activities Operating from Flow Cash Working Others Compensation Based Share copyrights licensed and Assets Intangible of Amortization Depreciation Income Net Activities Operating RMB) mn Year Fiscal (DEC Statements Flow Cash - Non EBITDA shares mn diluted and basic computation, in used ADS Non diluted and basic ADS, per loss Net (Loss) Income Net Tax Income for Provision Taxes before Earnings Net (Loss), Income Other cost finance net Income Operating Development Product Administrative and General Marketing and Sales profit Gross Revenues of Cost Revenues Net RMB mn Year Fiscal (DEC Statement Income Table

- e GAAP net loss (Profit) GAAP net loss (Profit) per ADS

th

capital

Activities e

the Company, Guotai Junan International Junan Company,the Guotai 5 las

change : Financial Statements : of Financial

t

page

- term Debt term fo - term Loan term

r

disclaimer ffering, net of issuance net ffering,

)

costs

(2,525) (2.179) (3.617) 2013A 2013A

3,069 3,069 1,764 1,764 1,656 (193) (735) (144) (885) (600) (362) (600) (599) (699) (268) (285) (691 (70) (15) 108 108 101 706 278 188 868 265 166 544

Youku (0) (8) (6) (1) 94 98 96 71 29 0 0 0 0 )

(1,846) (4,093) (2,584) (1,232) (1,441) (2.943) (4.436) (1,028) (3,400) 2014A 2014A

3,821 3,821 1,764 2,057 5,450 7,380 1,262 4,223 (612) (207) (193) (838) ( (838) (786) (868) (414) (251) 556) (35) (67) (52) 824 824 500 500 734 310 125 519 189 (2) 28 21 61 0 0

(1,558) (5,743) (1,343) (1,602) (1,932) (1,581) (1,243) (6.393) (8.130) (1,581) (1,581) (1,715) 2015E 2015E

6,539 6,539 1,615 1,615 3,041 3,041 3,821 (780) (215) (328) (255) (545) (408) 804 804 530 372 198 194 109 795 (2) (0) 34 34 98 25 0 0 0 0 0 0 0

(1,371) (3.998) (6.846) (1,371) (1,371) (1,483) (1,808) (8,162) (1,201) (1,885) (2,083) (2,559) 2016E 2016E

2,084 2,084 1,555 9,716 1,840 1,840 3,041 (379) (793) (666) (564) (292) (474) 538 538 286 887 200 965 965 635 (2) 2 85 49 49 0 0 0 0 0 0 0 0 6

(11,154) (1,240) (2.582) (6.010) (1,240) (1,240) (1,319) (2,176) (3,025) (2,708) (3,394) 13,603 13,603 2017E 2017E

2,694 2,694 1,788 2,448 1,140 1,140 1,840 2,263 (461) (524) (884) (707) (700) (308) (684) 689 689 413 206 676 676 (2) 27 52 63 63 0 0 0 0 0 0 0 0

Short Term Borrowings Term Short Liabilities Other and Expenses Accrued Payable Accounts Liabilities Current Assets Total Non Total net copyrights, Licensed Assets Other and Prepayments Costs Production Content Capitalized Net Assets, Intangible Goodwill Long net and Equipment, Property Assets Current Non Assets Current Total net copyrights, Licensed Net Assets, Intangible Cash Restricted Assets Other and Prepayments Def Party Related from Due Amounts Receivables Accounts Short Equivalents Cash and Cash Assets Current Sheet Balance Stock non - Non non non GAAPResultsNon BVP ADS Shareholders’ & Total Liabilities Total Total Liabilities - Non total Other Liabilities liabilit tax Deferred Liabilities Current Non Liabilities Current Total Customers from Advances

erred Tax Assets Tax erred - - - GAAP net profit net GAAP profit operating GAAP profit gross GAAP GAAP EBITDA (Loss) Profit - - - Shareholders’ term Investment in Related Party Related in Investment term term Investments term Based compensation compensation Based

- Liabilities current

Current Assets Current

(DEC Fiscal Year mn RMB) mn Year Fiscal (DEC

y

Equity

Equity

10,557 10,557 54.157 54.157 10,557 2013A 2013A 5,806 5,806 4,263 4,751 1,370 1,409 1,764 8,985 8,985 1,572 1,351 1,111 1,111 (362) (600) (461)

214 214 259 207 891 185 108 188 188 604 221 217 91 27 0 1 0 0 3 6 0 4

17,081 17,081 10,645 74.649 74.649 17,081 14,094 2014A 2014A 1,668 1,668 6,437 4,263 1,720 4,021 3,821 2,988 2,988 2,767 (556) (838) (585)

500 500 563 505 431 876 293 220 618 125 310 310 836 220 214 118 6 36 2 7 0 2 7

(1,243) (1,581) (1,378) 17,133 17,133 10,143 64.345 64.345 17,133 12,513 2015E 2015E 3,052 3,052 6,990 4,263 2,938 3,217 3,041 4,620 4,620 4,404

500 500 790 814 582 832 423 355 648 159 138 372 372 216 209 811 74 61 2 0 2 7

Page

(1,371) 17,020 17,020 55.625 55.625 17,020 11,142 11,142 2016E 2016E 3,656 3,656 1,178 7,858 1,186 4,263 9,162 3,983 2,252 1,840 1,691 1,691 5,879 5,667 (801) (913)

750 750 924 792 517 681 252 151 538 538 212 205 611 81 84 2 0 2 7 9

of of

47.995 47.995 18,438 18,438 2017E 2017E 2,636 2,636 9,902 8,537 8,329 1,125 5,5 1,573 8,809 1,636 1,184 4,263 9,629 5,706 1,576 1,140 (533) (176) (587) 10

689 689 208 201 753 882 713 715 323 167 119 12 90 7 2 0 2

Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015 Website: www.gtja.com.h Website: Queen’ 181 Plaza, Millennium Grand Block, 27/F., Low Guotai Report, Research this in contained data and information the of accuracy the ensure to made been has effort best Though (4) (3) (2) 9118 Fax: -9118 Fax: 2509 Tel.: (852) (852) - 2509 201 © requi licensing or registration any to companies group its and Junan Guotai or regulati law subject applicable to contrary be would use or availability publication, distribution, such where jurisdiction any in a is citi who entity or person any by, or use to distribution for or intended at, directed is not Report Research This decision. investment any to prior advisers financial own their consult the necessary where comprehend and and understand should unpredic Investors inherently contain. may with uncertainty conditions so economic situation, and mutable political future the of assumptions the from c may derived Report forecasts and Research This estimates herein. data and information the of completeness and accuracy the guarantee not of Gu groups banking investment and management asset by the made decisions investment or opinions to be contrary report this in expressed opinions Any of companies. group Junan of Guotai executives professional other and w dealers in or persons, orally expressed strategies or investment opinions to or contrary be differ may report this in expressed opinions Any proprietarily). or invest underwriter covered companies investment to banking, relates investment that including business do reports, may research companies Securities group its Junan and Guotai Junan by Guotai securities Junan"). for ("Guotai subscribe or Limited Kong) purchase (Hong uire, acq to offer or invitation an constitute not does Report Research This DISCLAIMER

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Company Report Youku Tudou 优酷土豆（YOKU US） 25 May 2015