Alibaba IPO

Prepared by - Dheeraj Vaidya, CFA, FRM

email - dheeraj@wallstreetmojo.com
websites:
www.wallstreetmojo.com

www.educorporatebridge.com

Core Financial Statements

Quarterly IS
Income Statement
Balance Sheet
Cash Flows
Supporting Financial Modeling Schedules
Debt
Working Capital
Depreciation Schedule
Amortization Schedule
Shareholder's Equity
Shares Oustanding
Valuations
DCF Valuation
Option Value

Alibaba IPO
Quarterly Income Statement

(RMB in Million Except Per Share Amounts)

China commerce
International commerce
Cloud computing and Internet infrastructure
Others
Revenue
Cost of revenue
Gross profit
Operating expenses:
Product development expenses
Sales and marketing expenses
General and administrative expenses(2)
Amortization of intangible assets
Impairment of goodwill and intangible assets
Yahoo TIPLA amendment payment(3)
Total operating expenses

Income (loss) from operations

Net loss attributable to common stockholders
(1) Share-based compensation expense

Growth Analysis and Drivers

Revenue
China commerce
% qoq (sequential)
International commerce
% qoq (sequential)
Cloud computing and Internet infrastructure (ii)
% qoq (sequential)

Others (iii)
% qoq (sequential)
Total
% qoq
Cost of revenue
% sales
Product development expenses
% sales
Sales and marketing expenses
% sales
General and administrative expenses(2)
% sales

Quarter Ended
31-Mar-13
30-Jun-13
2013
2013

30-Jun-12
2012

30-Sep-12
2012

31-Dec-12
2012

5,601
974
155
63
6,793

6,152
1,049
164
92
7,457

10,172
1,094
165
162
11,593

7,242
1,043
166
223
8,674

9,193
1,117
174
294
10,778

(2,158)
4,635

(2,373)
5,084

(2,911)
8,682

(2,277)
6,397

(2,727)
8,051

(848)
(869)
(537)

(888)
(974)
(804)

(1,163)
(1,249)
(1,003)

(854)
(521)
(545)

(1,018)
(713)
(865)

(3,487)

(4,448)

(8,563)

(6,533)

(4,222)

(5,358)

2,345

(1,106)

5,060

4,452

5,420

1,722

(1,560)

4,045

4,197

4,384

279

462

293

225

396

5,601

6,152
9.8%

10,172
65.3%

7,242
-28.8%

9,193
26.9%

974

1,049
7.7%

1,094
4.3%

1,043
-4.7%

1,117
7.1%

155

164
5.8%

165
0.6%

166
0.6%

174
4.8%

63

92
46.0%

162
76.1%

223
37.7%

294
31.8%

6,793

7,457

11,593

8,674

10,778

2,158
31.8%

2,373
31.8%

2,911
25.1%

2,277
26.3%

2,727
25.3%

848
12.5%

888
11.9%

1,163
10.0%

854
9.8%

1,018
9.4%

869
12.8%

974
13.1%

1,249
10.8%

521
6.0%

713
6.6%

537
7.9%

804
10.8%

1,003
8.7%

545
6.3%

865
8.0%

ed
30-Sep-13
2013

31-Dec-13
2013

31-Mar-14
2014

9,213
1,176
190
371
10,950

16,761
1,264
196
524
18,745

12,571
1,201
198
707
14,677

(3,001)
7,949

(4,171)
14,574

(3,229)
11,448

(1,168)
(657)
(793)

(1,707)
(1,897)
(2,046)

(1,321)
(1,468)
(1,614)

(5,702)

(9,944)

(7,632)

5,248

8,801

7,045

4,883

8,266

864

659

9,213
0.2%

16,761
81.9%

12,571
-25%

1,176
5.3%

1,264
7.5%

1,201
-5%

190
9.2%

196
3.2%

198
1%

371
26.2%

524
41.2%

707
35%

10,950

18,745

14,677

3,001
27.4%

4,171
22.3%

3,229
22%

1,168
10.7%

1,707
9.1%

1,321
9%

657
6.0%

1,897
10.1%

1,468
10%

793
7.2%

2,046
10.9%

1,614
11%

Alibaba IPO
(RMB in Million Except Per Share Amounts)
Revenue
China commerce
International commerce
Cloud computing and Internet infrastructure
Others
Total

Mar-10

3,716
2,620
144
190
6,670

Cost of revenue
Gross profit

(1,634)
5,036

Operating expenses:
Product development expenses
Sales and marketing expenses
General and administrative expenses(2)
Amortization of intangible assets
Impairment of goodwill and intangible assets
Yahoo TIPLA amendment payment(3)
Total operating expenses

(1,135)
(2,335)
(1,000)
(131)
(1,308)
(5,909)

Income (loss) from operations

Interest and investment income (loss), net
Interest Expense
Other income (expense), net

(873)
384
200

Loss before provision (benefit) for income taxes

Income tax expenses
Share of results of equity investees
Net income (loss)
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to Alibaba Group Holding Limited

(289)
(181)
(33)
(503)
(299)
(802)

Accretion of redeemable convertible preferred stock

Dividends accrued on convertible preference shares
Net loss attributable to common stockholders

(802)

EBITDA
Income from Operations
Add: Share-based compensation expense
Add: D&A

Adjusted EBITDA

Growth Analysis and Drivers

Revenue
China commerce
Retail (i)
% yoy
Wholesale (i)
% yoy
Total China commerce

International commerce
Retail (i)
% yoy
Wholesale (i)
% yoy
Total international commerce
% yoy
Cloud computing and Internet infrastructure (ii)
% yoy
Others (iii)
% yoy
Total
% yoy

Cost of revenue
% sales

1,634
24.5%

Product development expenses

% sales

1,135
17.0%

Sales and marketing expenses

% sales

2,335
35.0%

General and administrative expenses(2)

% sales

1,000
15.0%

Share based compensation expense

% Sales

Effective tax rates

-62.6%

Mar-11

Historicals
Mar-12

Fo
Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

7,665
3,433
425
380
11,903

15,637
3,765
515
108
20,025

29,167
4,160
650
540
34,517

47,738
4,758
758
1,896
55,150

60,571
5,388
588
1,784
68,331

76,971
6,247
617
2,675
86,511

97,936
7,443
648
4,013
110,040

(3,497)
8,406

(6,554)
13,471

(9,719)
24,798

(13,128)
42,022

(16,399)
51,931

(20,763)
65,748

(26,410)
83,631

(2,062)
(3,154)
(1,724)
(144)
(7,084)

(2,897)
(3,058)
(2,211)
(155)
(135)
(8,456)

(3,753)
(3,613)
(2,889)
(130)
(175)
(3,487)
(14,047)

(5,214)
(4,735)
(5,318)
(197)
(44)
(15,508)

(6,491)
(5,808)
(6,560)
-

(8,219)
(7,353)
(8,305)
###
###

(10,454)
(9,353)
(10,564)
-

(18,859)

(23,877)

(30,371)

1,322

5,015

10,751

26,514

33,072

41,871

53,260

549
(4)
68

258
(68)
327

39
(1,572)
894

1,080
(1,842)
1,178

1,132
(1,664)

1,540
(1,035)

2,211
(600)

1,935
(327)
1,608
(425)
1,183

5,532
(842)
(25)
4,665
(437)
4,228

10,112
(1,457)
(6)
8,649
(117)
8,532

26,930
(1,969)
(174)
24,787
(29)
24,758

32,540
(3,905)

42,376
(5,933)

54,870
(8,231)

28,635

36,443

46,640

28,635

36,443

46,640

4,228

(17)
(111)
8,404

(24)
(156)
24,578

28,635

36,443

46,640

33,072
2,392
2,691

41,871
3,028
5,069

53,260
3,851
8,089

1,183

13422

38,154

49,969

65,199

26970
101%
2197
-1%
29,168
87%

45421
68%
2316
5%
47,738
64%

58,139
28%
2,432
5%
60,571
27%

74,418
28%
2,553
5%
76,971
27%

95,255
28%
2,681
5%
97,936
27%

392
76%
3768
6%
4,161
11%

873
123%
3884
3%
4,758
14%

1,310
50%
4,078
5%
5,388
13%

1,964
50%
4,282
5%
6,247
16%

2,946
50%
4,496
5%
7,443
19%

650
26%
540
400%

560
-14%
1189
120%

588
5%
1,784
50%

617
5%
2,675
50%

648
5%
4,013
50%

20,025

34,519
72%

54,245
57%

68,331
26%

86,511
27%

110,040
27%

3,497
29.4%

6,554
32.7%

9,719
28.2%

13,128
23.8%

16,399
24%

20,763
24%

26,410
24%

2,062
17.3%

2,897
14.5%

3,753
10.9%

5,214
9.5%

6,491
10%

8,219
10%

10,454
10%

3,154
26.5%

3,058
15.3%

3,613
10.5%

4,735
8.6%

5,808
8.5%

7,353
8.5%

9,353
8.5%

1,724
14.5%

2,211
11.0%

2,889
8.4%

5,318
9.6%

6,560
9.6%

8,305
9.6%

10,564
9.6%

1254
6.3%

1259
3.6%

1919
3.5%

2,391.57
3.5%

3,027.88
3.5%

3,851.41
3.5%

2215
15,637

223
3542
3,765

515
108

16.9%

15.2%

14.4%

7.3%

12%

14%

15%

Forecasts
Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

124,741
9,141
681
6,019
140,583

156,583
11,587
715
9,029
177,914

179,775
13,492
750
11,286
205,303

197,597
14,995
788
12,979
226,359

207,477
16,221
827
14,277
238,802

(33,740)
106,843

(42,699)
135,214
29,040.5

(49,273)
156,030

(54,326)
172,033

(57,313)
181,490

(13,355)
(11,950)
(13,496)
###

(16,902)
(15,123)
(17,080)
###
-

(19,504)
(17,451)
(19,709)
###

(21,504)
(19,241)
(21,730)
###
-

(22,686)
(20,298)
(22,925)
###

(38,801)

(49,104)

(56,664)

(62,475)

(65,909)

68,042

86,110

99,367

109,558

115,580

3,236
(465)

4,602
(435)

6,226
(405)

8,041
(374)

10,006
(344)

70,813
(11,330)

90,277
(16,250)

105,188
(21,038)

117,224
(25,789)

125,242
(31,310)

59,483

74,027

84,151

91,435

93,931

59,483

74,027

84,151

91,435

93,931

59,483

74,027

84,151

91,435

93,931

68,042
4,920
11,938

86,110
6,227
16,831

99,367
7,186
22,717

109,558
7,923
29,348

115,580
8,358
36,493

84,901

109,168

129,269

146,828

160,431

121,926
28%
2,815
5%
124,741
27%

153,627
26%
2,956
5%
156,583
26%

176,671
15%
3,104
5%
179,775
15%

194,338
10%
3,259
5%
197,597
10%

204,055
5%
3,422
5%
207,477
5%

4,420
50%
4,721
5%
9,141
23%

6,629
50%
4,957
5%
11,587
27%

8,287
25%
5,205
5%
13,492
16%

9,530
15%
5,465
5%
14,995
11%

10,483
10%
5,738
5%
16,221
8%

681
5%
6,019
50%

715
5%
9,029
50%

750
5%
11,286
25%

788
5%
12,979
15%

827
5%
14,277
10%

140,583
28%

177,914
27%

205,303
15%

226,359
10%

238,802
5%

33,740
24%

42,699
24%

49,273
24%

54,326
24%

57,313
24%

13,355
10%

16,902
10%

19,504
10%

21,504
10%

22,686
10%

11,950
8.5%

15,123
8.5%

17,451
8.5%

19,241
8.5%

20,298
8.5%

13,496
9.6%

17,080
9.6%

19,709
9.6%

21,730
9.6%

22,925
9.6%

4,920.39
3.5%

6,226.98
3.5%

7,185.61
3.5%

7,922.57
3.5%

8,358.08
3.5%

16%

18%

20%

22%

25%

Alibaba IPO
Annual Balance Sheet

Alibaba IPO
Annual Balance Sheet
(RMB in Million Except Per Share Amounts)
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Restricted cash and escrow receivables
Loan receivables, net
Investment securities
Prepayments, receivables and other assets
Total current assets
Investment in equity investees
Investment securities
Prepayments, receivables and other assets
Property and equipment, net
Land use rights
Intangible assets
Goodwill
Total assets
LIABILITIES
Current liabilities:
Current bank borrowings
Secured borrowings
Income tax payable
Escrow money payable
Accrued expenses, accounts payable and other liabilities
Merchant deposits
Deferred revenue and customer advances
Total current liabilities
Deferred revenue
Deferred tax liabilities
Redeemable Preference Shares
Non-current bank borrowings
Other liabilities
Total liabilities

Mezzanine equity:
Others
Total mezzanine equity
Alibaba Group Holding Limited shareholders equity:
Ordinary shares
Additional paid-in capital
Treasury shares at cost
Subscription receivables
Statutory reserves
Accumulated other comprehensive income
Cumulative translation adjustments
Unrealized gain (loss) on available-for-sale investment securities, interest rate swaps and others
Retained earnings (Accumulated deficits)
Total Alibaba Group Holding Limited shareholders equity (deficits)
Non controlling interests
Total equity

Total liabilities + Shareholder's Equity

Check

Mar-10

Mar-11

Historicals
Mar-12

Mar-13

Mar-14
proforma

16,857
4,887
3,312
581
593
1,669
27,899

30,396
2,290
3,687
4,426
629
1,734
43,162

48,550
7,248
4,244
12,434
1,207
2,980
76,663

1,642
248
1,466
2,463
1,701
355
11,436
47,210

1,555
242
1,496
3,808
1,895
334
11,294
63,786

13,009
1,095
2,041
5,973
1,863
1,610
11,640
113,894

1,283
0
375
339
4,659
745
4,350
11,751

3,350
2,098
259
1,315
8,961
3,083
4,929
23,995

1,200
8,884
451
2,073
13,544
7,879
6,306
40,337

529
413
0
0
104

389
643
5191
22,462
60

396
1,774
0
30,226
72

12,797

52,740

72,805

10,447
30

86

30

10533

0
126
126

20,778

21,655

36,173

-819

-852

1,096

1,337

0
-493
2,388

-2121
1
12552
31,488

-1666
-8
-20491
-24

-787
139
-4307
33,114

2895
34,383

537
513

1013
40,963

47,210

63,786

113,894
-

Mar-15

Mar-16

Forecasts
Mar-17

Mar-18

Mar-19

64,630
7,248
4,244
15,033
1,207
3,758
96,120

89,337
7,248
4,244
19,032
1,207
4,758
125,826

131,732
7,248
4,244
24,209
1,207
6,052
174,692

191,888
7,248
4,244
30,928
1,207
7,732
243,247

268,277
7,248
4,244
39,141
1,207
9,785
329,902

13,009
1,095
2,041
10,115
1,863
3,931
11,640
139,814

13,009
1,095
2,041
13,697
1,863
6,916
11,640
176,088

13,009
1,095
2,041
16,612
1,863
10,738
11,640
231,690

13,009
1,095
2,041
18,732
1,863
15,632
11,640
307,260

13,009
1,095
2,041
19,693
1,863
21,813
11,640
401,057

0
8,884
451
2,624
16,399
9,840
8,200
46,398

0
8,884
451
3,322
20,763
12,458
10,381
56,259

0
8,884
451
4,226
26,410
15,846
13,205
69,021

0
8,884
451
5,398
33,740
20,244
16,870
85,587

0
8,884
451
6,832
42,699
25,620
21,350
105,835

396
1,774
0
21,450
72

396
1,774
0
11,420
72

396
1,774
0
7,620
72

396
1,774
0
7,141
72

396
1,774
0
6,662
72

70,090

69,921

78,883

94,970

114,739

126

126

126

126

126

69,598

106,041

152,681

212,164

286,191

139,814

176,088

231,690

307,260

401,057

Mar-20

Mar-21

Mar-22

354,324
7,248
4,244
45,167
1,207
11,292
423,481

449,749
7,248
4,244
49,799
1,207
12,450
524,697

550,834
7,248
4,244
52,537
1,207
13,134
629,203

13,009
1,095
2,041
17,506
1,863
28,949
11,640
499,584

13,009
1,095
2,041
10,794
1,863
36,821
11,640
601,961

13,009
1,095
2,041
-1,818
1,863
45,129
11,640
702,162

0
8,884
451
7,884
49,273
29,564
24,636
120,691

0
8,884
451
8,692
54,326
32,596
27,163
132,112

0
8,884
451
9,170
57,313
34,388
28,656
138,861

396
1,774
0
6,183
72

396
1,774
0
5,704
72

396
1,774
0
5,225
72

129,116

140,058

146,328

126

126

126

370,342

461,777

555,708

499,584

601,961

702,162

Alibaba IPO
Annual Cash Flows
(RMB in Million Except Per Share Amounts)
Mar-10
Mar-11
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) Loss on disposals of equity investees
Realized and unrealized loss (gain) related to investment securities
Change in fair value of other assets and liabilities
Loss (Gain) on disposals of other subsidiaries
Depreciation and amortization of property and equipment and land use rights
Amortization of intangible assets
Share-based compensation expense
Equity-settled donation expense

Impairment of goodwill and intangible assets

Loss (Gain) on disposals of property and equipment
Share of results of equity investees
Deferred income taxes
Allowance for doubtful accounts relating to micro loans
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Restricted cash and escrow receivables
Loan receivables
Prepayments, receivables and other assets
Income tax payable
Escrow money payable
Accrued expenses, accounts payable and other liabilities
Merchant deposits
Deferred revenue and customer advances
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (Increase) in short-term investments, net
(Increase) Decrease in restricted cash
Decrease (Increase) in trading investment securities, net
Acquisitions of available-for-sale and held-to-maturity investment securities
Disposals of available-for-sale investment securities
Acquisitions of
-Land use rights and construction in progress
-Other property, equipment and intangible assets
Disposals of property and equipment
Cash paid for business combinations, net of cash acquired
Deconsolidation and disposal of subsidiaries, net of cash proceeds
Loans to employees, net of repayments
Acquisitions of equity investees
Disposals of equity investees
Net cash provided by (used in) investing activities

Historicals
Mar-12

Mar-13

Mar-14

4,665

8,649

24,578

(24)
138
264
3
715
155
1,254

(68)
(80)
245
(8)
805
130
1,259

135
3
25
150
4

175
3
6
104
120

3
(151)
(36)
(316)
947
197
1,919
1,269
44
(1)
174
1,141
359

(113)
(226)
(240)
230
94
1,332
583
128
9,275

(974)
(2,828)
(354)
(116)
976
3,657
2,338
437
14,476

(760)
(8,367)
(1,241)
192
758
4,526
4,796
1,384
31,415

3,728
(2,108)
167
(508)
1,966

2,589
334
(12)
(60)
26

(4,965)
291
(160)
(1,051)
365

(1,419)
(749)
1
(191)
(20)
(305)
(761)
74
(125)

(1,457)
(1,046)
301
(52)
551
(344)
(452)
167
545

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

Mar-16

Mar-17

Forecasts
Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

28,635

36,443

46,640

59,483

74,027

84,151

91,435

93,931

2,691
71

5,069
42

8,089
30

11,938
26

16,831
46

22,717
50

29,348
50

36,493
50

(2,599)

(4,000)

(5,176)

(6,719)

(8,213)

(6,026)

(4,632)

(2,738)

(778)
-

(1,000)
-

(1,294)
-

(1,680)
-

(2,053)
-

(1,506)
-

(1,158)
-

(684)
-

551
2,855
1,961

698
4,363
2,618

904
5,647
3,388

1,173
7,330
4,398

1,434
8,959
5,376

1,052
6,574
3,944

809
5,053
3,032

478
2,986
1,792

1,894

2,182

2,824

3,665

4,480

3,287

2,527

1,493

35,281

46,416

61,050

79,614

100,886

114,242

126,463

133,802

(1,326)
(3,010)

(9,225)

(11,679)

(14,855)

(18,979)

(24,018)

(27,716)

(30,558)

(32,238)

(422)
134
(203)
(11,934)
89
(22,192)

(9,225)

(11,679)

(14,855)

(18,979)

(24,018)

(27,716)

(30,558)

(32,238)

Cash Flow available for Financing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of ordinary shares, including repayment of loan and interest receivable on e
Repurchase of ordinary shares
Issuance of ordinary shares for Partner Capital Investment Plan (Note 8(c))

Issuance of Convertible Preference Shares, net of direct incidental fees incurred

PaymentofdividendonConvertiblePreferenceShares

Redemption of Redeemable Preference Shares

Acquisitions of shares of Alibaba.com Limited

Payment for privatization of Alibaba.com Limited

Acquisition of the remaining noncontrolling interest in a subsidiary

Dividend paid by a consolidated subsidiary to noncontrolling interests

Disposals of partial interest in subsidiaries, net of related costs
Proceeds from secured borrowings relating to micro loans

Proceeds from current bank borrowings

Repayment of current bank borrowings
Proceeds from non-current bank borrowings

Repayment of non-current bank borrowings

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Mar-15

26,056

618
(2)

16,792
(40,111)

10,542
(103)

(419)

(9)
166
827
(706)

(15,134)
(335)

11
2,098
2,439
(2,584)
24,979

475
(54)

(1,406)
(76)

1,598
(116)
442

34,737

46,195

60,636

76,868

86,526

95,904

101,563

(104)
(5,131)

(9)

6,786
403
(123)
30,088
(24,788)
9,046

(1,200)

(8,776)

(10,030)

(3,800)

(479)

(479)

(479)

(479)

(479)

(9,976)

(10,030)

(3,800)

16,080

24,707

42,395

60,157

(479)

76,389

(479)

86,047

(479)

95,425

(479)

101,084

(479)

48,550
64,630

64,630
89,337

89,337
131,732

131,732
191,888

191,888
268,277

268,277
354,324

354,324
449,749

449,749
550,834

(115)

9,571

13,539

18,154

7,286
16,857

16,857
30,396

30,396
48,550

still need to incorporate IPO proceeds

Alibaba IPO
Working Capital

Historic
(RMB in Million Except Per Share Amounts)
Net Sales
Cost of Sales

Mar-10

Mar-11

6,670
1,634

11,903
3,497

Working Capital Balances

Loan receivables, net
Prepayments, receivables and other assets
Total Non Cash Current Assets

Escrow money payable

Accrued expenses, accounts payable and other liabilities
Merchant deposits
Deferred revenue and customer advances
Total Non-Debt Current Liabilities

Net Working Capital/ (Deficit)

(Increase)/ Decrease in Working Capital

Ratios & Assumptions
Loan receivables, net
% of Sales
Prepayments, receivables and other assets
% of Sales

Escrow money payable

% of COGS
Accrued expenses, accounts payable and other liabilities
% of COGS
Merchant deposits

Deferred revenue and customer advances

% of COGS

Historicals
Mar-12

Mar-13

Mar-14

Mar-15

Mar-16

Mar-17

20,025
6,554

34,517
9,719

55,150
13,128

68,331
16,399

86,511
20,763

110,040
26,410

581
1,669
2,250

4,426
1,734
6,160

12,434
2,980
15,414

15,033
3,758
18,791

19,032
4,758
23,791

24,209
6,052
30,261

339
4,659
745
4,350
10,093

1,315
8,961
3,083
4,929
18,288

2,073
13,544
7,879
6,306
29,802

2,624
16,399
9,840
8,200
37,063

3,322
20,763
12,458
10,381
46,924

4,226
26,410
15,846
13,205
59,686

(7,843)

(12,128)

(14,388)

(18,272)

(23,133)

(29,425)

7,843

4,285

2,260

3,884

4,861

6,292

581
2.9%

4,426
12.8%

12,434
22.5%

15,033
22.0%

19,032
22.0%

24,209
22.0%

1,669
8.3%

1,734
5.0%

2,980
5.4%

3,758
5.5%

4,758
5.5%

6,052
5.5%

339
5.2%

1,315
13.5%

2,073
15.8%

2,624
16.0%

3,322
16.0%

4,226
16.0%

4,659
71.1%

8,961
92.2%

13,544
103.2%

16,399
100.0%

20,763
100.0%

26,410
100.0%

745
11.4%

3,083
31.7%

7,879
60.0%

9,840
60.0%

12,458
60.0%

15,846
60.0%

4,350
66.4%

4,929
50.7%

6,306
48.0%

8,200
50.0%

10,381
50.0%

13,205
50.0%

Forecasts
Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

140,583
33,740

177,914
42,699

205,303
49,273

226,359
54,326

238,802
57,313

30,928
7,732
38,660

39,141
9,785
48,926

45,167
11,292
56,458

49,799
12,450
62,249

52,537
13,134
65,671

5,398
33,740
20,244
16,870
76,252

6,832
42,699
25,620
21,350
96,500

7,884
49,273
29,564
24,636
111,356

8,692
54,326
32,596
27,163
122,777

9,170
57,313
34,388
28,656
129,526

(37,592)

(47,574)

(54,898)

(60,528)

(63,856)

8,167

9,982

7,324

5,630

3,327

30,928
22.0%

39,141
22.0%

45,167
22.0%

49,799
22.0%

52,537
22.0%

7,732
5.5%

9,785
5.5%

11,292
5.5%

12,450
5.5%

13,134
5.5%

5,398
16.0%

6,832
16.0%

7,884
16.0%

8,692
16.0%

9,170
16.0%

33,740
100.0%

42,699
100.0%

49,273
100.0%

54,326
100.0%

57,313
100.0%

20,244
60.0%

25,620
60.0%

29,564
60.0%

32,596
60.0%

34,388
60.0%

16,870
50.0%

21,350
50.0%

24,636
50.0%

27,163
50.0%

28,656
50.0%

Alibaba IPO
Consolidated Depreciation and Capex
(RMB in Million Except Per Share Amounts)
Net Sales
Capital Expenditures
Capital Expenditures as % of Net Sales

Mar-10
6,670

Mar-11
11,903

Historicals
Mar-12
20,025
2,168
-10.8%

Beginning Net PP&E

Capital Expenditures
(Depreciation Expense)
(Asset Sales )
Ending Net PP&E
(as of Dec'2013)
PPE (Break-up for 2014)
Computer equipment and software
Furniture, office and transportation equipment
Buildings
Construction in progress
Total

below are gross amounts

2013
3,640.0
242.0
892.0
1,720.0
6,494.0

Total Capex
Breakup
Computer equipment and software
Furniture, office and transportation equipment
Buildings
Construction in progress

Computer equipment and software - Straight Line Method

Useful Life
4
Computer equipment and software
5,772
Depreciation Expense (existing)
Capex
Year
Useful Life
2015 4193.11684
3.0
5308.75168
2016
3.0

2017
2018
2019
2020
2021
2022

6752.63347
8626.86002
10917.682289
12598.449184
13890.54159
14654.124563

3.0
3.0
3.0
3.0
3.0
3.0

Depreciation (Computer equipment and software)

Furniture, office and transportation equipment
Useful Life
Furniture, office and transportation equipment
Depreciation Expense (existing)
Year
2015
2016
2017
2018
2019
2020
2021
2022

4
267.0

Capex
Useful Life
194.0
3.0
245.6
3.0
312.4
3.0
399.1
3.0
505.0
3.0
582.8
3.0
642.5
3.0
677.9
3.0

Total Depreciation (Furniture, office and transportation equipment)

Buildings
Useful Life
Buildings
Depreciation Expense (existing)

20
2,630.0

Year
2015
2016
2017
2018
2019
2020
2021
2022
Total Depreciation (Buildings)
Total Depreciation Expense

Capex
Useful Life
1,910.6
3.0
2,418.9
3.0
3,076.8
3.0
3,930.8
3.0
4974.6196153
3.0
5740.457615
3.0
6329.1968785
3.0
6677.121899
3.0

Historicals

Forecasts
Mar-13
34,517
2,503
-7.3%

Mar-14
55,150
4,336
-7.9%

5,973.0

Mar-15
68,331
6,833
10.0%

Mar-16
86,511
8,651
10.0%

Mar-17
110,040
11,004
10.0%

5,973.0
6,833.1
(2,690.9)

10,115.2
8,651.1
(5,069.3)

13,697.0
11,004.0
(8,088.5)

10,115.2

13,697.0

16,612.5

w are gross amounts

2014 Useful Life
5,772.0
267.0
2,630.0
737.0

Proportion of Assets
4
61.4%
4
2.8%
20
28.0% Straight Line Method of Depreciation
7.8% Straight Line Method of Depreciation
Straight Line Method of Depreciation

9,406.0

4,193
194
1,911
535

5,309
246
2,419
678

6,753
312
3,077
862

1,443.0

1,443.0

1,443.0

698.9

1,397.7
884.8

1,397.7
1,769.6

1,125.4

2,141.9

3,725.5

5,735.7

66.8

66.8

66.8

32.3

64.7
40.9

64.7
81.9
52.1

99.1

172.3

265.3

131.5

131.5

131.5

318.4

636.9
403.2

636.9
806.3
512.8

449.9

1,171.5

2,087.5

2,690.9

5,069.3

8,088.5

Forecasts
Mar-18
140,583
14,058
10.0%

Mar-19
177,914
17,791
10.0%

Mar-20
205,303
20,530
10.0%

Mar-21
226,359
22,636
10.0%

Mar-22
238,802
23,880
10.0%

16,612.5
14,058.3
(11,938.3)

18,732.4
17,791.4
(16,830.6)

19,693.2
20,530.3
(22,717.1)

17,506.4
22,635.9
(29,347.8)

10,794.5
23,880.2
(36,493.0)

18,732.4

19,693.2

17,506.4

10,794.5

(1,818.3)

8,627
399
3,931
1,102

10,918
505
4,975
1,394

12,598
583
5,740
1,609

13,891
643
6,329
1,774

14,654
678
6,677
1,871

1,443.0

1,443.0

1,443.0

1,443.0

1,443.0

1,397.7
1,769.6

1,397.7
1,769.6

1,397.7
1,769.6

1,397.7
1,769.6

1,397.7
1,769.6

Depreciation
Depreciation
Depreciation

2,250.9
1,437.8

2,250.9
2,875.6
1,819.6

2,250.9
2,875.6
3,639.2
2,099.7

2,250.9
2,875.6
3,639.2
4,199.5
2,315.1

2,250.9
2,875.6
3,639.2
4,199.5
4,630.2
2,442.4

8,299.0

11,556.4

15,475.8

19,890.6

24,648.0

66.8

66.8

66.8

66.8

66.8

64.7
81.9
104.1
66.5

64.7
81.9
104.1
133.0
84.2

64.7
81.9
104.1
133.0
168.3
97.1

64.7
81.9
104.1
133.0
168.3
194.3
107.1

64.7
81.9
104.1
133.0
168.3
194.3
214.2
113.0

383.9

534.6

715.9

920.1

1,140.2

131.5

131.5

131.5

131.5

131.5

636.9
806.3
1,025.6
655.1

636.9
806.3
1,025.6
1,310.3
829.1

636.9
806.3
1,025.6
1,310.3
1,658.2
956.7

636.9
806.3
1,025.6
1,310.3
1,658.2
1,913.5
1,054.9

636.9
806.3
1,025.6
1,310.3
1,658.2
1,913.5
2,109.7
1,112.9

3,255.4

4,739.7

6,525.5

8,537.1

10,704.8

11,938.3

16,830.6

22,717.1

29,347.8

36,493.0

Alibaba IPO
Consolidated Amortization & Intangible
0
(RMB in Million Except Per Share Amounts)
Net Sales
Additions to Intangibles
Additions to Intangibles as % of Net Sales
Beginning Net Intangibles
Additions to Intangibles
(Amortization Expense)
(Intangible Sales and write offs)
Ending Net Intangibles

Mar-10
6,670

Mar-11
11,903

Historicals
Mar-12
20,025

Historicals
Mar-13
34,517
106.0
0.3%

Mar-14
55,150
1469.0
2.7%

1,610.0

Mar-15
68,331
2391.6
3.5%

Mar-16
86,511
3027.9
3.5%

Mar-17
110,040
3851.4
3.5%

Forecasts
Mar-18
140,583
4920.4
3.5%

1,610.0
2,391.6
(71.0)

3,930.6
3,027.9
(42.0)

6,916.5
3,851.4
(30.0)

10,737.9
4,920.4
(26.0)

3,930.6

6,916.5

10,737.9

15,632.3

Forecasts
Mar-19
177,914
6227.0
3.5%

Mar-20
205,303
7185.6
3.5%

Mar-21
226,359
7922.6
3.5%

Mar-22
238,802
8358.1
3.5%

15,632.3
6,227.0
(46.0)

21,813.2
7,185.6
(50.0)

28,948.8
7,922.6
(50.0)

36,821.4
8,358.1
(50.0)

21,813.2

28,948.8

36,821.4

45,129.5

Alibaba IPO
Debt Schedule
Historicals
(RMB in Million Except Per Share Amounts)
Cash Flow Available for Financing Activities
Proceeds from/ (Repurchase of) Equity
+ Beginning Cash Balance
- Minimum Cash Balance
Cash Available for Debt Repayment
Long Term Debt Issuance
Long Term Debt (Repayments)
Cash Available for Revolving Credit Facility

Mar-10

Mar-11

Additional Revolving Credit Facility

Beginning Balance
Discretionary (Paydown)/ Borrowings
Ending Balance
Long Term (commited payments)
Beginning Balance
Issuance
(Repayment/ Amortization)
Ending Balance
Interest Expense Calculation
1) Revolving Credit Facility
Interest Expense (Revolving Credit)
2) Long Term (committed)
Interest Expense
(1) + (2): Total Interest Expense

Cash Balances
Cash Balance
Average Cash Balance
Interest Earned

2%

Historicals
Mar-12

Mar-13

Mar-14

1,200.0

30,226.0

48,550

Mar-15
26,056.1

Mar-16
34,736.8

48,550.0
(10,000.0)
38,550.0
(8,776.0)
29,774.0

64,630.1
(10,000.0)
54,630.1
(10,030.0)
44,600.1

1,200.0
(1,200.0)
-

30,226.0

21,450.0

(8,776.0)
21,450.0

(10,030.0)
11,420.0

600
6.0%
36.0

6.0%
-

25,838
6.3%
1,628

16,435
6.3%
1,035

1,664

1,035

64,630
56,590

89,337
76,983

1,132

1,540

Mar-17
46,194.7
89,336.8
(10,000.0)
79,336.8
(3,800.0)
75,536.8

Forecasts
Mar-18
60,635.7
131,731.5
(10,000.0)
121,731.5
(479.0)
121,252.5

Mar-19
76,867.8

Mar-20
86,525.7

Mar-21
95,904.4

191,888.2
###
181,888.2
###
(479.0)
181,409.2

268,277.0
(10,000.0)
258,277.0
(479.0)
257,798.0

354,323.7
(10,000.0)
344,323.7
(479.0)
343,844.7

11,420.0

7,620.0

7,141.0

6,662.0

6,183.0

(3,800.0)
7,620.0

(479.0)
7,141.0

###
6,662.0

(479.0)
6,183.0

(479.0)
5,704.0

6.0%
-

6.0%
-

6.0%
-

6.0%
-

6.0%
-

9,520
6.3%
600

7,381
6.3%
465

6,902
6.3%
435

6,423
6.3%
405

5,944
6.3%
374

600

465

435

405

374

131,732
110,534

191,888
161,810

268,277
230,083

354,324
311,300

449,749
402,036

2,211

3,236

4,602

6,226

8,041

Mar-22
101,563.5
449,749.1
(10,000.0)
439,749.1
(479.0)
439,270.1

5,704.0
(479.0)
5,225.0

6.0%
5,465
6.3%
344
344

550,834
500,291
10,006

Alibaba IPO
Consolidated Shareholder's Equity
Historicals
(RMB in Million Except Per Share Amounts)
Beginning Equity Balance
Net Income
Issuance/ (Repurchase) of Equity
Ending Equity Balance

Mar-10

Mar-11

Historicals
Mar-12

F
Mar-13

Mar-14

40,963.0

Mar-15
40,963.0
28,635.2
69,598.2

Mar-16
69,598.2
36,443.0
106,041.2

Mar-17
106,041.2
46,639.9
152,681.1

Forecasts
Mar-18
Mar-19
152,681.1
212,164.2
59,483.1
74,027.2

Mar-20
286,191.3
84,150.5

Mar-21
370,341.8
91,434.8

Mar-22
461,776.6
93,931.4

212,164.2

370,341.8

461,776.6

555,708.0

286,191.3

Alibaba IPO
Valuing Alibaba's Options
Assumptions
InputsforBlackScholesModel
Enterthecurrentstockprice=
Enterthestrikepriceontheoption=
Entertheexpirationoftheoption=
Enterthestandarddeviationinstockprices=
Entertheannualizeddividendyieldonstock=
Enterthetreasurybondrate=
Enterthenumberofwarrants(options)outstanding=
Enterthenumberofsharesoutstanding=

70
12.33
4.1
42.00%
0.00%
2.70%
54.28
2,446,646

CalculationofBoxIncOption
StockPrice=
StrikePrice=
AdjustedS=
AdjustedK=
Expiration(inyears)=
OptionsIssued
TotalSharesoutstanding
TBondRate
Variance
Annualizeddividendyield
InterestRate

70
12.33
70.0
12.33
4.1
54
2,446,646
2.70%
0.1764
0.00%
2.70%

d1=
N(d1)=

2.5972
0.9953

d2=
N(d2)=

1.7468
0.9597

ValueperAlibaba'soption=
ValueofallAlibaba'soptionsoutstanding=

$59.08
$3,207

$70 is expected IPO price; converting to RMB

Alibaba IPO
Shares Oustanding Schedule
Common Shares
Current Structure
Ordinary Shares
Ordinary Shares
Ordinary Shares
Ordinary Shares Issued through IPO

2,321,114,237
47,670,100
77,861,552
2,446,645,889

Options Data

Outstanding at March 31, 2013 (i)

Options granted
Options exercised
Cancelled/forfeited/expired
Outstanding at December 31, 2013 (i)
Total Number of outstanding options provided in the prospectus
(see below)

issuable upon vesting

future issuable
<< put your number here

Shares Subject to
WeightedWeighted-Average Remaining
Outstanding Options
Average Exercise Price Contractual Life (Years)
26,189,060
8,095,500
(16,619,426)
(1,308,213)
16,356,921
12.33
54,279,500

4.1

Aggregate Intrinsic Value (in

thousands)

Alibaba IPO
DCF Valuations
Free Cash Flow Projections

Hist

(RMB in Million Except Per Share Amounts)

Mar-10
(873)

EBIT
Free Cash Flow to Firm
EBIT x (1-t)
Add: Depreciation & amortization
Less: Capex
Add: Change in working capital

(1,420)

FCFF

Cost of Capital
Infinite growth rate

9.0%
3%

Free cash flow to firm of explicit period (2015E to 2019E)

Mar-10
Cash Flows
NPV of explicit period

321,953

Mar-10

Terminal value @ perpetual growth (2019)

Terminal value as of 2019
NPV of terminal value

812,148

DCF Valuation Summary

DCF calculation as of
NPV of explicit period
NPV of terminal value
Enterprise Value
+ Cash
- Debt
Equity value
+ Short term investments, restricted cash, investment securities

Valuation (RMB)

+ Alipay valuation
Stock Option Value

321,953
812,148
1,134,100
$48,550
($40,310)
1,142,340
12,587
13,009
24,866
$3,207

Adjusted Equity Value

1,189,595

+Investment in equity investees

486.21

growth

Share Price

Historicals
Mar-11

Mar-12

Mar-13

Mar-14

1,322

5,015

10,751

26,514

1,099

4,252
715
(749)

9,202
805
(1,046)
4,285
13,246

24,575
947
(3,010)
2,260
24,772

Mar-11

Mar-12

Mar-13

Mar-14

Mar-11

Mar-12

Mar-13

Mar-14

Valuation (US$)
51,791
130,646
182,437
7,810
(6,484)
183,851
2,025
2,093
4,000
516
191,452 $191.5 billion dollars

78.25

Sensitivity Analysis
WACC
191.45
1%
2%
3%
4%
5%
6.0%

7%

8%

9%

Mar-15

Mar-16

Forecasts
Mar-17

33,072

41,871

53,260

68,042

29,103
2,691
(9,225)
3,884
26,453

36,009
5,069
(11,679)
4,861
34,261

45,271
8,089
(14,855)
6,292
44,795

57,155
11,938
(18,979)
8,167
58,282

Mar-15
26,453

Mar-16
34,261

Mar-17
44,795

Mar-18
58,282

Mar-15
0

Mar-16
0

Mar-17
-

Mar-18
-

Mar-18

WACC
10%

11%

2.4169491525

Mar-19

Mar-20

Mar-21

Mar-22

86,110

99,367

109,558

115,580

70,610
16,831
(24,018)
9,982
73,405

79,493
22,717
(27,716)
7,324
81,819

85,455
29,348
(30,558)
5,630
89,875

86,685
36,493
(32,238)
3,327
94,267

Mar-19
73,405

Mar-20
81,819

Mar-21
89,875

Mar-22
94,267

Mar-19
-

Mar-20
-

Mar-21
-

Mar-22
1,618,255