AGM 2016

Oct 13, 2016

Good day, and welcome to Alibaba Group Holdings Limited 2016 Annual General Meeting of Shareholders. I would now like to turn the conference over to Daniel Zhang, Chief Executive Officer. Please go ahead. Good evening, and good morning, ladies and gentlemen. I'm Daniel Zhang, Director and Chief Executive Officer of Alibaba Group Holding Limited. I will be chairing today's meeting. On behalf of the Board of Directors and management team of Alibaba Group, I would like to welcome our shareholders and ADS holders to our 20 16 Annual General Meeting. I would now like to call the meeting to order. Kevin Zhang, our lead SEC Compliance and Corporate Governance Counselor is appointed as Inspector of Elections and Secretary for this meeting. I would like to delegate my authority to Kevin to conduct the formal part of this meeting. After the formal business is completed, members of the management team will take questions. I will now turn it over to Kevin. Thank you, Daniel. Welcome, everyone. Before we start, please mute your phones and other mobile devices. We ask our shareholders and other participants here with us today to kindly refrain from taking photos or videos during this meeting. After the meeting, you will have a chance to chat with members of our management team or take photos. This meeting will be conducted primarily in English, although we will accept questions later in Chinese. Before proceeding with the formal business of today's meeting, I would like to note, as we have told you in our proxy statement, we have published letters to shareholders from Jack Ma, our Chairman and Daniel Zhang, our Chief Executive Officer. We invite you to visit our website, www.alibabagroup.com to review their letters. Now let me begin by introducing other members of our senior management team who are with us today. Maggie Wu, Chief Financial Officer Michael Yao, Senior Vice President and Rob Lin, Head of Investor Relations. Also presented today are representatives of Citibank NA, the depository bank for American depository shares representing our ordinary shares. Citibank is also the record holder of the ordinary shares underlying our ADS. PricewaterhouseCoopers, the company's independent accountant Naples and Quarter, our Cayman Islands Council and Simpson Thadrin Bartlett, our U. S. Council. We will first attend to the official business of the meeting. To ensure an orderly meeting during the formal part of the meeting, we will not be taking questions that are not related to the items on the agenda. As the Chairman just mentioned, following the formal part of the meeting, we will have a general question and answer session. While the formal part of the meeting is going on, we ask ordinary shareholders attending this meeting in person to pass the questions you may have to Alex Chen. Alex, can you stand up so we can see you? Those of you who are attending this meeting online may submit your questions via our virtual meeting website at any time. Thank you in advance for your cooperation. I have received confirmation of mailing from Computershare, the transfer agent for our ordinary shares and the Citibank, the depository bank for our ADS. The notice of this meeting has been duly given and that copies of the proxy statement and proxy cards or voting cards have been furnished to all holders of ordinary shares and ADS of record as of the close of business on August 19, 2016 New York Time. A count of shares present, including those represented by ADS, before the commencement of this meeting indicated that we have more than 2,430,000,000 shares represented in person or by proxy at this meeting. This total represents approximately 97% of total shares entitled to vote as of the record day. As inspector of elections, I have determined that we have present in person or by proxy a sufficient number of shares to constitute a quorum. Therefore, the meeting is duly convened and we may proceed with the business of the meeting. All items submitted for vote at today's meeting will be decided by Paul. To our shareholders to our ordinary shareholders who are present at the meeting today, if you have turned in a proxy and do not intend to change your vote, then you do not need to vote again because we will count your proxy. If you do not turn in a proxy or wish to change your vote, you may vote by casting the ballots provided to you when you signed in. To holders of our ADS who are attending this meeting via our virtual meeting website, pursuant to our articles of association and the deposit agreement governing the ADS, you must vote through Citibank, the holder of record of the ordinary shares underlying the ADS you hold. If you have already provided your voting instructions to Citibank, then your vote will be cast by Citibank at this meeting as you have instructed and you will not be able to change your vote today. If you have not provided your voting instructions to Citibank, you will not be able to vote today via the virtual meeting website. In accordance with the terms of the deposit agreement for the ADS, holders of approximately 452,000,000 ADS who did not provide timely voting instructions to Citibank were deemed to have instructed Citibank to give a discretionary proxy to Maggie Wu. Wu was designated by the company to vote the shares represented by such unvoted ADS in her discretion. We will announce the voting results at the end of the formal part of the meeting. The polls for each matter to be voted on at this meeting are now open. We will collect your ballots after the voting on all the proposals is completed. The first item of form of business is the election of 4 directors directors as a Group 1 Director until our 2018 Annual General Meeting or until their successors are duly elected or appointed. The person The persons named in the proxy statement have been nominated for election by the respective nominating parties as explained in the proxy statement. They are Daniel Yong Zhang, Chiwa Tong, Jerry Yang, Wenling Martello and Eric Xandong Jing. Is there a motion for the election of each of Daniel Zhang, Chi Huatong, Jerry Yang and Wenli Martello as a Group 2 Director and for the election of Eric Jin as a Group 1 Director as stated in the proxy statement. The matter is now called for a vote. The proxies solicited by us will be voted as instructed by the shareholders or ADS holders completing and returning proxies or voting cards. Nagiwu, who holds a discretionary 452,000,000 unvoted ADS, has indicated that she intends to vote all of the shares represented by such unvoted ADS in favor of the election of each of the directors as proposed. Ordinary shareholders present who wish to vote in person today should mark your ballot indicating the way you wish to vote. Michael Yao, our Senior Vice President, will moderate the questions and answers relating to the matters to be voted on at the meeting today. Michael, are there any questions on this matter? Kevin, there's no questions online with regard to this resolution. Okay. Thanks. The next order of business is to ratify the appointment of PricewaterhouseCoopers as our independent registered public accounting firm for the fiscal year ending March 31, 2017. Is there a motion to ratify PricewaterhouseCoopers as our independent registered public accounting firm for the fiscal year ending March 31, 2017. The matter is now called for a vote. The proxy solicited by us will be voted as instructed by the shareholders or ADS holders completing and returning proxies or voting cards. Maggie Wu, who holds a discretionary proxy for the 452,000,000 unvoted ADS has indicated that she intends to vote all of the shares represented by such unvoted ADS in favor of this proposal. Ordinary shareholders present who wish to vote in person today should mark your ballot indicating the way you wish to Are there any questions on this matter? No questions online with regard to this resolution. Thanks, Michael. To our ordinary shareholders who are present today at this meeting, if you intend to vote in person or change your previously submitted proxy at the meeting today and have not already done so, please pass your ballot to Alex Chen now so that it can be counted. We will not accept ballots, proxies or votes or any changes or revocations submitted after the closing of the poll. Okay. The polls for each matter to be voted on at this meeting are now closed. No additional ballots, proxies or vote and no changes or Based on all the proxy's voting cards and ballots received, I'm pleased to announce the voting results as follows. Regarding the election of Daniel Zhang as a Group 2 Director, approximately 2,200 and 23,000,000 shares or 91.5 percent of the total shares present in person or by proxy have voted 4. Approximately 206,000,000 shares or 8.5% of the total shares present in person or by proxy have voted against. And approximately 1,200,000 shares or 0.0 percent of the total shares present in person or by proxy have abstained from voting. Regarding the election of Qi Hua Tang as a Group 2 Director, approximately 2,385,000,000 shares or 98.1 percent of the total shares present in person or by proxy have voted for approximately 44,000,000 shares or 1.8% of the total shares present in person or by proxy have voted against. And approximately 700,000 shares or 0.0 percent of the total shares present in person by proxy have abstained from voting. Regarding the election of Jerry Yang as a Group 2 Director, approximately 2,383,000,000 shares or 98.1 percent of the total shares present in person by proxy have voted 4. Approximately 45,000,000 shares or 1.9% of the total shares present in person or by proxy have voted against. And approximately 1,800,000 shares or 0.1% of total shares present in person or by proxy have abstained from voting. Regarding the election of Wenling Martello as a Group 2 Director, approximately 2,423,000,000 shares or 99.7% of the total shares present in person or by proxy have voted 4. Approximately 6,800,000 shares or 0.3% of the total shares present in person or by proxy have voted against. And approximately 700,000 shares or 0.0 percent of total shares present in person or by proxy have abstained from voting. Regarding the election of Eric Jin as a Group 1 Director, approximately 2,246,000,000 shares or 92% 92.4% of the total shares present in person or by proxy has voted for. Approximately 184,000,000 shares or 7.6 percent of the total shares present in personnel by proxy have voted against and approximately 800,000 shares or 0.0 percent of the total shares present in person or by proxy have abstained from voting. Regarding the ratification of the appointment of PricewaterhouseCoopers as Alibaba Group's independent registered public accounting firm for the fiscal year ending March 31, 2017. Approximately 2,426,000 shares or 99.8% of the total shares present in person or by proxy have voted for. Approximately 3,500,000 shares or 0.1% of the total shares present in person or by proxy have voted against. Approximately 600,000 shares or 0.0 percent of the total shares present in person or by proxy have abstained from voting. Based on the voting results, I declare that each of Daniel Zhang, Qi Hua Tong, Jerry Yang and Wenling Martello has been elected as a Group 2 Director to serve until our 2019 Annual General Meeting or until their successors are duly elected or appointed. Eric Jin has been elected as a Group 1 Director to serve until our 2018 Annual General Meeting or until his successor is duly elected or appointed. And the appointment of PricewaterhouseCoopers as Alibaba Group's independent registered public accounting firm for the fiscal year ending March 31, 2017 has been ratified. The final detailed results of voting will be disclosed in the current report on Form 6 ks that we will file with the SEC shortly after this meeting. This concludes the formal business of the meeting. There being no further business to be conducted at this meeting, may I have a motion to adjourn the formal portion of the 2016 Annual General Meeting? We will then proceed with a question and answer session. I so move. There being no objection, the formal part of the 2016 Annual General Meeting of Shareholders is adjourned. And I will now turn the podium over to Rob Lin, Head of our Investor Relations, for him to moderate the question and answer session. Thank you, Kevin. Before we get started, please note that today's Q and A session may include forward looking statements that are not historical in nature and refer to future events or our future financial performance, which are subject to risks and uncertainties. Such forward looking statements are based upon information available to us as of today's meeting, and our actual results may differ materially due to a number of factors and risks. Please refer to our filings with the SEC for a detailed discussion of those risks. Except for as required by law, we assume no obligation to update any forward looking statements we may make here today. Please also note before our upcoming announcement of earnings results for the September quarter are announced, we will not be in a position to address any questions or comments relating to our financial or operating performance. In addition, while we will do our best to address all questions received, we may not be able to address each of them today due to time constraints. We have budgeted approximately 15 minutes to answer general questions at this meeting. I will now open the floor to the first question. Well, I have a few points and actually two questions. The first point is that I made some request last year at the AGM and I appreciate Alibaba's help. I understand that our shareholders are in the 3rd place for Alibaba Group. However, we still hope that in future we will have more opportunities to be able to meet face to face with Alibaba senior management and we would like to be invited to participate in events such as Investor Day. I have two questions. I remember actually many years ago I saw the film of Alibaba where there's a girl living in the IT world and today Jack has been talking about we are in the DT world which is a different scenario which is a more inspiring scenario than in the past. So I'm wondering if Daniel could elaborate on this new scenario, this new future that Jack has been talking about. And also a few days ago, I remember in Washington, the Director General of the WTO mentioned that the development of technology in particular smart technology might lead to unemployment of low skilled worker. We understand Alibaba is a technology driven company. So I'm wondering whether the strategy will lead to unemployment issue that will affect a lot of people. Thank you very much for your question. And I would like to thank you and all our shareholders for your trust in Alibaba Group. It is true that it is our philosophy that we put customer first, employees second and shareholders third. However, at the same time, we might want to realize that many of you have multiple roles. For example, one person can be our consumer and a shareholder can be our merchant as well. So this is a very interesting and great ecosystem where we support each other, where we grow together based on mutual trust. So again, I'd like to take this opportunity thank our shareholders and our consumers for your trust and support. Regarding your question, in this DT era, big data is playing a very big role in everybody's life. It is having profound impact on the way that we live. That's why Alibaba's development is based on unleashing the power of big data. We would like to make it possible for all participants of our ecosystem to use the power of big data to make it easy to do business anywhere, to make it cheaper and easy to do business for everybody. Well, Jack's vision about the DT era is gradually happening. We are seeing that big data, cloud computing and our rural strategy are changing the way business is done. As for your specific question about your concern about unemployment that could be potentially triggered by technology. I would like to say that big data is the way to go. It is just a matter of how we use big data. It is about using data to the advantage of human beings, while technology might mean that some low new opportunities and new jobs. Our next question is coming from online participant. So Daniel, this is for you. What is being considered in the arena of artificial intelligence? Very related to last question. Okay. Yes, actually as a next generation technology, actually, AR is viewed as a very important component. Actually, Alibaba pay close attention to this and we have committed great resources to develop this AI technology, AI platform. And we also we are also very happy to see that we have a very big advantage to develop this technology AI technology because we actually we have huge data and which is very, very important for AI development. And we believe this leverage AI technology and the results and we can grow our business even better. Okay. There's no active question online. Maybe we'll take the last question from the floor. Thank you very much for this opportunity to be here as a small shareholder. I feel especially honored and pleased to participate in the AGM of such a great company. I have a question for CEO, Daniel Zhang. As you mentioned Alibaba has built a strong and comprehensive platform with various business segments. You mentioned Internet Finance, artificial intelligence, cloud computing, digital media and entertainment. So my question is, which area will enjoy the strongest growth in the future for Alibaba? Alibaba over the past 17 years has always been focused on both the present and the future. We have always made our strategies around our vision and mission. That's why probably you have seen that in terms of e commerce as well as financial services and logistics, we have enjoyed very steady and strong growth. Apart from the traditional business segments, we have made a lot of investment into new areas, in particular in digital media and cloud computing. These two business segments have enjoyed exponential growth. If you look at cloud computing in the previous several quarters, it has enjoyed 3 digit growth rate. So I would and also the digital media business is also taking very strong shape. That's why I mentioned we also make a lot of investment into these emerging areas as well. However, we are also making investments into a broader future. That's why we've been incubating new generation business. We encourage our employees to have new ideas to create innovative business concepts. For example, we have Xinyu, we have Gaoduo, Auto Navy as well as a whole bunch of new business segments. So we look at today, we also focus on tomorrow, but most importantly, we also incubate new ideas for the future. Thank you, Daniel. That was the last question of today's meeting. Okay. Thank you all. This concludes Alibaba Group's 2016 Annual General Meeting of Shareholders. Thank you again for attending this meeting, and we look forward to your continued support. Thank you. The conference is being recorded. Thank you for attending today's presentation. You may now disconnect.