2 0 20 21 2020 / 21 2020 / 21 年度報告 ANNUAL REPORT 2020/21 年度報告 ANNUAL REPORT 1 CONTENTS PAGE Corporate Information 2 Chairman’s Statement 3 Management Discussion and Analysis 5 Biographical Information of Directors and Senior Management 16 Directors’ Report 19 Corporate Governance Report 75 Environmental, Social and Governance Report 102 Independent Auditor’s Report 126 Consolidated Statement of Profit or Loss 137 Consolidated Statement of Comprehensive Income 138 Consolidated Balance Sheet 139 Consolidated Statement of Changes in Equity 141 Consolidated Statement of Cash Flows 142 Notes to the Consolidated Financial Statements 144 Financial Summary 246 2020/21 年度報告 2 ANNUAL REPORT CORPORATE INFORMATION BOARD OF DIRECTORS PRINCIPAL BANKERS Executive Directors China CITIC Bank International Limited Mr. Fan Luyuan (Chairman & Chief Executive Officer) China Merchants Bank Co., Ltd. Mr. Li Jie (President) Bank of Communications Co., Ltd. Mr. Meng Jun (Chief Financial Officer) The Hongkong and Shanghai Banking Corporation Limited Non-Executive Director Citibank (China) Co., Ltd. Mr. Xu Hong East West Bank JPMorgan Chase Bank, N.A. Independent Non-Executive Directors Ms. Song Lixin REGISTERED OFFICE Mr. Tong Xiaomeng Clarendon House, 2 Church Street Mr. Johnny Chen Hamilton HM 11, Bermuda EXECUTIVE COMMITTEE HEAD OFFICE AND PRINCIPAL PLACE Mr. Fan Luyuan (Committee Chairman) OF BUSINESS IN HONG KONG Mr. Li Jie 26/F, Tower One, Times Square, 1 Matheson Street Mr. Meng Jun Causeway Bay, Hong Kong Telephone : (852) 2215 5428 AUDIT COMMITTEE Facsimile : (852) 2215 5200 Mr. Johnny Chen (Committee Chairman) Ms. Song Lixin BEIJING OFFICE Mr. Tong Xiaomeng Block B, Wangjing, Ali Center, Building 4, Zone 4, Wangjing East Park, REMUNERATION COMMITTEE Chaoyang District, Beijing, China Mr. Tong Xiaomeng (Committee Chairman) Postal Code : 100020 Mr. Fan Luyuan Telephone : (86) 10 5885 1881 Ms. Song Lixin Facsimile : (86) 10 5697 2838 NOMINATION COMMITTEE PRINCIPAL SHARE REGISTRAR AND Mr. Fan Luyuan (Committee Chairman) TRANSFER OFFICE Mr. Tong Xiaomeng MUFG Fund Services (Bermuda) Limited Mr. Johnny Chen 4th Floor North Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda COMPANY SECRETARY Ms. Lew Aishan Nicole HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE SOLICITOR Tricor Secretaries Limited Mayer Brown Level 54, Hopewell Centre 183 Queen’s Road East, Hong Kong AUDITOR PricewaterhouseCoopers STOCK CODE Certified Public Accountants and Registered PIE Stock Code on The Stock Exchange of Auditor Hong Kong Limited: 1060 WEBSITE www.alibabapictures.com 2020/21 年度報告 ANNUAL REPORT 3 CHAIRMAN’S STATEMENT Dear Shareholders, The 2020/21 Financial Year was an extraordinary year, as the lingering COVID-19 pandemic brought unprecedented challenges to the film and television industry. Due to the pandemic, operations of cinemas were suspended until July 2020. The re-opening of cinemas cast a light of hope for the Chinese film industry. With the support of audiences, China’s total box office surpassed that of the North America, ranking the first in the world. If this momentum continues, the industry will usher in explosive growth. Although business activities are severely affected by the pandemic, the operating results and financial performance of Alibaba Pictures Group Limited (the “Company” or “Alibaba Pictures”, together with its subsidiaries, the “Group”) illustrate the fruitful returns of our significant investment in the pan-entertainment industry. During the 2020/21 Financial Year, Alibaba Pictures achieved revenue of RMB2,859 million, broadly in line with that of the previous financial year. The adjusted EBITA recorded a profit of RMB118 million, thereby turning profitable for the first time from a loss of RMB661 million for the previous financial year. This success derives from our adherence to our dual-drive strategy featuring “quality content and new infrastructure” over the past seven years, focusing on content and building on technology platform and multiple business models to unify upstream and downstream operations, as well as online and offline channels throughout the industry chain, and expand the boundaries of the film and television industry. In terms of our content business, the Group has always been adhering to our value of ordinary people performing heroic deeds that have major emotional appeal while promoting positive values. On this basis, the Group has a content reserve which serves as an engine driving the growth of the Group’s business in this difficult time. In the past year, we participated in the production and distribution of more than 20 films, including 6 films under the Jin Cheng Co-production Project (錦橙合製計劃), accounting for 68% and 11% of the nationwide box office, respectively, which fully demonstrates the strength of Alibaba Pictures in content production. Apart from production and distribution, the Group is also committed to becoming a producer of high-quality content. In addition to its significant investment in cinema films, the Group has been diversifying the categories of its entertainment content. During the 2020/21 Financial Year, the professional team of the Group continued to develop strong capabilities from IP discovery to content production, delivering drama series with greater scale and volume. Looking forward, the Company will also dedicate itself to content production on a more extensive scale, such as variety shows, as well as the development and production of offline entertainment content, to truly make Alibaba Pictures a quality content provider in the entire entertainment industry. As a provider of utility services for the entertainment industry, Alibaba Pictures has been committed to building a digital world in the entertainment industry over the years, facilitating the integration and innovation of the industry through construction of pan-entertainment infrastructure. We have formed a dynamic and rich ecosystem covering 2B and 2C users as well as business partners in the entertainment industry. Our products such as platform ticketing and digitalization platform demonstrate our focus on user value and technological innovation. In terms of our ticketing business, Tao Piao Piao has upgraded the functions on its platform with all-round exposure and promotion of films, performance, drama series and variety shows, in combination with publicity campaigns and user management based on users’ favorite content. During the 2020/21 Financial Year, the number of consumers who purchased after viewing content promotion grew by 20% as compared with the previous financial year. Furthermore, Tao Piao Piao plays an important role in local consumer services. Under the offline entertainment scenarios facilitated by Alipay, Tao Piao Piao is able to deliver quality and convenient services to more users. Furthermore, Yunzhi, a digitalization product offering operation and management services to cinemas, is designed to utilize technologies to help cinemas improve operational and management efficiency while reducing operating cost. During the 2020/21 Financial Year, Yunzhi continued to rank first among peers in terms of the number of ticket-issuing cinemas. 2020/21 年度報告 4 ANNUAL REPORT CHAIRMAN’S STATEMENT Alibaba Pictures enhances the promotion and distribution of films, dramas series and variety shows through technological innovation. We established a content promotion and distribution platform by integrating the promotion and distribution platform “Beacon” with total marketing solutions designer “Dark Horse” and content marketing agency “Taoxiu Media Group” into a closed-loop marketing process. Data tool products “Beacon Research” and “Beacon Professional” created the underlying prediction logic and business model for promotion and distribution. With the total marketing solutions provided by “Taoxiu Media Group” and “Dark Horse”, promotion and distribution activities are carried out using the relevant tools and feedback data from the market throughout the process is recorded on the platform. In addition, we have launched Cloud Production, a digital product covering the entire production process and multiple production scenarios, which is deeply integrated with the production of film and drama series content and designed to advance the further industrialization of film industry. During the 2020/21 Financial Year, the number of crews that used the product significantly increased by 68% as compared with that for the previous financial year. IP merchandising and commercialization business is a core business of the Group to expand the boundaries of the entertainment industry. With the rising needs of the younger generation for self-expression and spiritual enjoyment, as well as the growing demand of merchants for product marketing and value-added services, the compound annual growth rate of tangible products in the pan-entertainment industry reached 14.2%, with market size of RMB1.2 trillion estimated for 2021. Alibaba Pictures has seized this development opportunity and made business deployments in advance to build an IP matrix centered around the world’s top IPs. By empowering merchants to deliver meaningful products, the Group has further enhanced the influence and life cycles of IPs. After years of accumulation, the Group also helps merchants develop customized products with distinctive designs and meaningful stories through constant innovation in image design and resources integration, demonstrating the great commercial value that IPs bring to the products. As a service platform focusing on IPs, we are able to