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
30-Jun-12
(RMB in Million Except Per Share Amounts) 2012
China commerce 5,601
International commerce 974
Cloud computing and Internet infrastructure 155
Others 63
Revenue 6,793
Cost of revenue (2,158)
Gross profit 4,635
Operating expenses:
Product development expenses (848)
Sales and marketing expenses (869)
General and administrative expenses(2) (537)
Amortization of intangible assets
Impairment of goodwill and intangible assets
Yahoo TIPLA amendment payment(3)
Total operating expenses (4,448)
Income (loss) from operations 2,345
Net loss attributable to common stockholders 1,722
(1) Share-based compensation expense 279
Growth Analysis and Drivers
Revenue
China commerce 5,601
% qoq (sequential)
International commerce 974
% qoq (sequential)
Cloud computing and Internet infrastructure (ii) 155
% qoq (sequential)
Quarter Ended
Others (iii) 63
% qoq (sequential)
Total 6,793
% qoq
Cost of revenue 2,158
% sales 31.8%
Product development expenses 848
% sales 12.5%
Sales and marketing expenses 869
% sales 12.8%
General and administrative expenses(2) 537
% sales 7.9%
30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13
2012 2012 2013 2013 2013 2013
6,152 10,172 7,242 9,193 9,213 16,761
1,049 1,094 1,043 1,117 1,176 1,264
164 165 166 174 190 196
92 162 223 294 371 524
7,457 11,593 8,674 10,778 10,950 18,745
(2,373) (2,911) (2,277) (2,727) (3,001) (4,171)
5,084 8,682 6,397 8,051 7,949 14,574
(888) (1,163) (854) (1,018) (1,168) (1,707)
(974) (1,249) (521) (713) (657) (1,897)
(804) (1,003) (545) (865) (793) (2,046)
(3,487) - - - - -
(8,563) (6,533) (4,222) (5,358) (5,702) (9,944)
(1,106) 5,060 4,452 5,420 5,248 8,801
(1,560) 4,045 4,197 4,384 4,883 8,266
462 293 225 396 864 659
6,152 10,172 7,242 9,193 9,213 16,761
9.8% 65.3% -28.8% 26.9% 0.2% 81.9%
1,049 1,094 1,043 1,117 1,176 1,264
7.7% 4.3% -4.7% 7.1% 5.3% 7.5%
164 165 166 174 190 196
5.8% 0.6% 0.6% 4.8% 9.2% 3.2%
Quarter Ended
92 162 223 294 371 524
46.0% 76.1% 37.7% 31.8% 26.2% 41.2%
7,457 11,593 8,674 10,778 10,950 18,745
2,373 2,911 2,277 2,727 3,001 4,171
31.8% 25.1% 26.3% 25.3% 27.4% 22.3%
888 1,163 854 1,018 1,168 1,707
11.9% 10.0% 9.8% 9.4% 10.7% 9.1%
974 1,249 521 713 657 1,897
13.1% 10.8% 6.0% 6.6% 6.0% 10.1%
804 1,003 545 865 793 2,046
10.8% 8.7% 6.3% 8.0% 7.2% 10.9%
31-Mar-14
2014
12,571
1,201
198
707
14,677
(3,229)
11,448
(1,321)
(1,468)
(1,614)
-
(7,632)
7,045
12,571
-25%
1,201
-5%
198
1%
Quarter Ended
707
35%
14,677
3,229
22%
1,321
9%
1,468
10%
1,614
11%
Alibaba IPO
(RMB in Million Except Per Share Amounts) Mar-13 Mar-14 Mar-15
Revenue
China commerce 29,167 47,738 60,571
International commerce 4,160 4,758 5,388
Cloud computing and Internet infrastructure 650 758 588
Others 540 1,896 1,784
Total 34,517 55,150 68,331
Cost of revenue (9,719) (13,128) (16,399)
Gross profit 24,798 42,022 51,931
Operating expenses:
Product development expenses (3,753) (5,214) (6,491)
Sales and marketing expenses (3,613) (4,735) (5,808)
General and administrative expenses(2) (2,889) (5,318) (6,560)
Amortization of intangible assets (130) (197) -
Impairment of goodwill and intangible assets (175) (44) -
Yahoo TIPLA amendment payment(3) (3,487) -
Total operating expenses (14,047) (15,508) (18,859)
Income (loss) from operations 10,751 26,514 33,072
Interest and investment income (loss), net 39 1,080 1,132
Interest Expense (1,572) (1,842) (1,664)
Other income (expense), net 894 1,178
Loss before provision (benefit) for income taxes 10,112 26,930 32,540
Income tax expenses (1,457) (1,969) (3,905)
Share of results of equity investees (6) (174)
Net income (loss) 8,649 24,787 28,635
Net income (loss) attributable to noncontrolling interests (117) (29)
Net income (loss) attributable to Alibaba Group Holding Limited 8,532 24,758 28,635
Accretion of redeemable convertible preferred stock (17) (24)
Dividends accrued on convertible preference shares (111) (156)
Net loss attributable to common stockholders 8,404 24,578 28,635
EBITDA
Income from Operations 33,072
Add: Share-based compensation expense 2,392
Add: D&A 2,691
Adjusted EBITDA 38,154
Historicals Forecasts
Growth Analysis and Drivers
Revenue
China commerce
Retail (i) 26970 45421 58,139
% yoy 101% 68% 28%
Wholesale (i) 2197 2316 2,432
% yoy -1% 5% 5%
Total China commerce 29,168 47,738 60,571
87% 64% 27%
International commerce
Retail (i) 392 873 1,310
% yoy 76% 123% 50%
Wholesale (i) 3768 3884 4,078
% yoy 6% 3% 5%
Total international commerce 4,161 4,758 5,388
% yoy 11% 14% 13%
Cloud computing and Internet infrastructure (ii) 650 560 588
% yoy 26% -14% 5%
Others (iii) 540 1189 1,784
% yoy 400% 120% 50%
Total 34,519 54,245 68,331
% yoy 72% 57% 26%
Cost of revenue 9,719 13,128 16,399
% sales 28.2% 23.8% 24%
Product development expenses 3,753 5,214 6,491
% sales 10.9% 9.5% 10%
Sales and marketing expenses 3,613 4,735 5,808
% sales 10.5% 8.6% 8.5%
General and administrative expenses(2) 2,889 5,318 6,560
% sales 8.4% 9.6% 9.6%
Share based compensation expense 1259 1919 2,391.57
% Sales 3.6% 3.5% 3.5%
Effective tax rates 14.4% 7.3% 12%
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
76,971 97,936 124,741 156,583 179,775
6,247 7,443 9,141 11,587 13,492
617 648 681 715 750
2,675 4,013 6,019 9,029 11,286
86,511 110,040 140,583 177,914 205,303
(20,763) (26,410) (33,740) (42,699) (49,273)
65,748 83,631 106,843 135,214 156,030
29,040.5
(8,219) (10,454) (13,355) (16,902) (19,504)
(7,353) (9,353) (11,950) (15,123) (17,451)
(8,305) (10,564) (13,496) (17,080) (19,709)
- - - - -
- - - - -
(23,877) (30,371) (38,801) (49,104) (56,664)
41,871 53,260 68,042 86,110 99,367
1,540 2,211 3,236 4,602 6,226
(1,035) (600) (465) (435) (405)
42,376 54,870 70,813 90,277 105,188
(5,933) (8,231) (11,330) (16,250) (21,038)
36,443 46,640 59,483 74,027 84,151
36,443 46,640 59,483 74,027 84,151
36,443 46,640 59,483 74,027 84,151
41,871 53,260 68,042 86,110 99,367
3,028 3,851 4,920 6,227 7,186
5,069 8,089 11,938 16,831 22,717
49,969 65,199 84,901 109,168 129,269
Forecasts
74,418 95,255 121,926 153,627 176,671
28% 28% 28% 26% 15%
2,553 2,681 2,815 2,956 3,104
5% 5% 5% 5% 5%
76,971 97,936 124,741 156,583 179,775
27% 27% 27% 26% 15%
1,964 2,946 4,420 6,629 8,287
50% 50% 50% 50% 25%
4,282 4,496 4,721 4,957 5,205
5% 5% 5% 5% 5%
6,247 7,443 9,141 11,587 13,492
16% 19% 23% 27% 16%
617 648 681 715 750
5% 5% 5% 5% 5%
2,675 4,013 6,019 9,029 11,286
50% 50% 50% 50% 25%
86,511 110,040 140,583 177,914 205,303
27% 27% 28% 27% 15%
20,763 26,410 33,740 42,699 49,273
24% 24% 24% 24% 24%
8,219 10,454 13,355 16,902 19,504
10% 10% 10% 10% 10%
7,353 9,353 11,950 15,123 17,451
8.5% 8.5% 8.5% 8.5% 8.5%
8,305 10,564 13,496 17,080 19,709
9.6% 9.6% 9.6% 9.6% 9.6%
3,027.88 3,851.41 4,920.39 6,226.98 7,185.61
3.5% 3.5% 3.5% 3.5% 3.5%
14% 15% 16% 18% 20%
Mar-21 Mar-22
197,597 207,477
14,995 16,221
788 827
12,979 14,277
226,359 238,802
(54,326) (57,313)
172,033 181,490
(21,504) (22,686)
(19,241) (20,298)
(21,730) (22,925)
- -
- -
(62,475) (65,909)
109,558 115,580
8,041 10,006
(374) (344)
117,224 125,242
(25,789) (31,310)
91,435 93,931
91,435 93,931
91,435 93,931
109,558 115,580
7,923 8,358
29,348 36,493
146,828 160,431
Forecasts
194,338 204,055
10% 5%
3,259 3,422
5% 5%
197,597 207,477
10% 5%
9,530 10,483
15% 10%
5,465 5,738
5% 5%
14,995 16,221
11% 8%
788 827
5% 5%
12,979 14,277
15% 10%
226,359 238,802
10% 5%
54,326 57,313
24% 24%
21,504 22,686
10% 10%
19,241 20,298
8.5% 8.5%
21,730 22,925
9.6% 9.6%
7,922.57 8,358.08
3.5% 3.5%
22% 25%
Alibaba IPO
Annual Balance Sheet
(RMB in Million Except Per Share Amounts) Mar-10
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:
Historicals
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-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
proforma
16,857 30,396 48,550 64,630 89,337 131,732
4,887 2,290 7,248 7,248 7,248 7,248
3,312 3,687 4,244 4,244 4,244 4,244
581 4,426 12,434 15,033 19,032 24,209
593 629 1,207 1,207 1,207 1,207
1,669 1,734 2,980 3,758 4,758 6,052
27,899 43,162 76,663 96,120 125,826 174,692
1,642 1,555 13,009 13,009 13,009 13,009
248 242 1,095 1,095 1,095 1,095
1,466 1,496 2,041 2,041 2,041 2,041
2,463 3,808 5,973 10,115 13,697 16,612
1,701 1,895 1,863 1,863 1,863 1,863
355 334 1,610 3,931 6,916 10,738
11,436 11,294 11,640 11,640 11,640 11,640
47,210 63,786 113,894 139,814 176,088 231,690
1,283 3,350 1,200 0 0 0
0 2,098 8,884 8,884 8,884 8,884
375 259 451 451 451 451
339 1,315 2,073 2,624 3,322 4,226
4,659 8,961 13,544 16,399 20,763 26,410
745 3,083 7,879 9,840 12,458 15,846
4,350 4,929 6,306 8,200 10,381 13,205
11,751 23,995 40,337 46,398 56,259 69,021
529 389 396 396 396 396
413 643 1,774 1,774 1,774 1,774
0 5191 0 0 0 0
0 22,462 30,226 21,450 11,420 7,620
104 60 72 72 72 72
12,797 52,740 72,805 70,090 69,921 78,883
10,447 0
Historicals Forecasts
30
86 126
30 10533 126 126 126 126
1 1 1
20,778
21,655
36,173
0 0 0
-819
-852 -493
1,096 1,337 2,388
-2121 -1666 -787
1 -8 139
12552 -20491 -4307
31,488 -24 33,114
2895 537 1013
34,383 513 40,963 69,598 106,041 152,681
47,210 63,786 113,894 139,814 176,088 231,690
- - - -
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
191,888 268,277 354,324 449,749 550,834
7,248 7,248 7,248 7,248 7,248
4,244 4,244 4,244 4,244 4,244
30,928 39,141 45,167 49,799 52,537
1,207 1,207 1,207 1,207 1,207
7,732 9,785 11,292 12,450 13,134
243,247 329,902 423,481 524,697 629,203
13,009 13,009 13,009 13,009 13,009
1,095 1,095 1,095 1,095 1,095
2,041 2,041 2,041 2,041 2,041
18,732 19,693 17,506 10,794 -1,818
1,863 1,863 1,863 1,863 1,863
15,632 21,813 28,949 36,821 45,129
11,640 11,640 11,640 11,640 11,640
307,260 401,057 499,584 601,961 702,162
0 0 0 0 0
8,884 8,884 8,884 8,884 8,884
451 451 451 451 451
5,398 6,832 7,884 8,692 9,170
33,740 42,699 49,273 54,326 57,313
20,244 25,620 29,564 32,596 34,388
16,870 21,350 24,636 27,163 28,656
85,587 105,835 120,691 132,112 138,861
396 396 396 396 396
1,774 1,774 1,774 1,774 1,774
0 0 0 0 0
7,141 6,662 6,183 5,704 5,225
72 72 72 72 72
94,970 114,739 129,116 140,058 146,328
Forecasts
126 126 126 126 126
212,164 286,191 370,342 461,777 555,708
307,260 401,057 499,584 601,961 702,162
- - - - -
Alibaba IPO
Annual Cash Flows
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
CASH FLOWS FROMOPERATING ACTIVITIES:
Net income 4,665 8,649 24,578 28,635 36,443 46,640 59,483 74,027 84,151 91,435 93,931
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) Loss on disposals of equity investees (24) (68) 3
Realized and unrealized loss (gain) related to investment securities 138 (80) (151)
Change in fair value of other assets and liabilities 264 245 (36)
Loss (Gain) on disposals of other subsidiaries 3 (8) (316)
Depreciation and amortization of property and equipment and land use rights 715 805 947 2,691 5,069 8,089 11,938 16,831 22,717 29,348 36,493
Amortization of intangible assets 155 130 197 71 42 30 26 46 50 50 50
Share-based compensation expense 1,254 1,259 1,919
Equity-settled donation expense 1,269
Impairment of goodwill and intangible assets 135 175 44
Loss (Gain) on disposals of property and equipment 3 3 (1)
Share of results of equity investees 25 6 174
Deferred income taxes 150 104 1,141
Allowance for doubtful accounts relating to micro loans 4 120 359
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Restricted cash and escrowreceivables (113) (974) (760) - - - - - - - -
Loan receivables (226) (2,828) (8,367) (2,599) (4,000) (5,176) (6,719) (8,213) (6,026) (4,632) (2,738)
Prepayments, receivables and other assets (240) (354) (1,241) (778) (1,000) (1,294) (1,680) (2,053) (1,506) (1,158) (684)
Income tax payable 230 (116) 192 - - - - - - - -
Escrowmoney payable 94 976 758 551 698 904 1,173 1,434 1,052 809 478
Accrued expenses, accounts payable and other liabilities 1,332 3,657 4,526 2,855 4,363 5,647 7,330 8,959 6,574 5,053 2,986
Merchant deposits 583 2,338 4,796 1,961 2,618 3,388 4,398 5,376 3,944 3,032 1,792
Deferred revenue and customer advances 128 437 1,384 1,894 2,182 2,824 3,665 4,480 3,287 2,527 1,493
Net cash used in operating activities 9,275 14,476 31,415 35,281 46,416 61,050 79,614 100,886 114,242 126,463 133,802
CASH FLOWS FROMINVESTING ACTIVITIES:
Decrease (Increase) in short-term investments, net 3,728 2,589 (4,965)
(Increase) Decrease in restricted cash (2,108) 334 291
Decrease (Increase) in trading investment securities, net 167 (12) (160)
Acquisitions of available-for-sale and held-to-maturity investment securities (508) (60) (1,051)
Disposals of available-for-sale investment securities 1,966 26 365
Acquisitions of
- Land use rights and construction in progress (1,419) (1,457) (1,326)
- Other property, equipment and intangible assets (749) (1,046) (3,010) (9,225) (11,679) (14,855) (18,979) (24,018) (27,716) (30,558) (32,238)
Disposals of property and equipment 1 301
Cash paid for business combinations, net of cash acquired (191) (52) (422)
Deconsolidation and disposal of subsidiaries, net of cash proceeds (20) 551 134
Loans to employees, net of repayments (305) (344) (203)
Acquisitions of equity investees (761) (452) (11,934)
Disposals of equity investees 74 167 89
Net cash provided by (used in) investing activities (125) 545 (22,192) (9,225) (11,679) (14,855) (18,979) (24,018) (27,716) (30,558) (32,238)
Cash Flowavailable for Financing Activities 26,056 34,737 46,195 60,636 76,868 86,526 95,904 101,563
CASH FLOWS FROMFINANCING ACTIVITIES:
Issuance of ordinary shares, including repayment of loan and interest receivable on employee loans for the exercise of ordinary shares 618 16,792 1,598 - - - - - - - -
Repurchase of ordinary shares (2) (40,111) (116)
Issuance of ordinary shares for Partner Capital Investment Plan (Note 8(c)) 442
Issuance of Convertible Preference Shares, net of direct incidental fees incurred 10,542
Payment of dividend on Convertible Preference Shares (103) (104)
Redemption of Redeemable Preference Shares (5,131)
Acquisitions of shares of Alibaba.com Limited (419)
Payment for privatization of Alibaba.com Limited (15,134)
Acquisition of the remaining noncontrolling interest in a subsidiary (335) (9)
Dividend paid by a consolidated subsidiary to noncontrolling interests (9)
Disposals of partial interest in subsidiaries, net of related costs 166 11
Proceeds from secured borrowings relating to micro loans 2,098 6,786
Proceeds from current bank borrowings 827 2,439 403
Repayment of current bank borrowings (706) (2,584) (123) (1,200) - - - - - - -
Proceeds from non-current bank borrowings 24,979 30,088
Repayment of non-current bank borrowings (24,788) (8,776) (10,030) (3,800) (479) (479) (479) (479) (479)
Net cash provided by (used in) financing activities 475 (1,406) 9,046 (9,976) (10,030) (3,800) (479) (479) (479) (479) (479)
Effect of exchange rate changes on cash and cash equivalents (54) (76) (115)
Net increase (decrease) in cash and cash equivalents 9,571 13,539 18,154 16,080 24,707 42,395 60,157 76,389 86,047 95,425 101,084
Cash and cash equivalents, beginning of period 7,286 16,857 30,396 48,550 64,630 89,337 131,732 191,888 268,277 354,324 449,749
Cash and cash equivalents, end of period 16,857 30,396 48,550 64,630 89,337 131,732 191,888 268,277 354,324 449,749 550,834
still need to incorporate IPO proceeds
Historicals Forecasts
Alibaba IPO
Working Capital
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12
Net Sales 6,670 11,903 20,025
Cost of Sales 1,634 3,497 6,554
Working Capital Balances
Loan receivables, net 581
Prepayments, receivables and other assets 1,669
Total Non Cash Current Assets - 2,250
Escrow money payable 339
Accrued expenses, accounts payable and other liabilities 4,659
Merchant deposits 745
Deferred revenue and customer advances 4,350
Total Non-Debt Current Liabilities - 10,093
Net Working Capital/ (Deficit) - (7,843)
(Increase)/ Decrease in Working Capital 7,843
Ratios & Assumptions
Loan receivables, net 581
% of Sales 2.9%
Prepayments, receivables and other assets 1,669
% of Sales 8.3%
Escrow money payable 339
% of COGS 5.2%
Accrued expenses, accounts payable and other liabilities 4,659
% of COGS 71.1%
Merchant deposits 745
11.4%
Deferred revenue and customer advances 4,350
% of COGS 66.4%
Historicals
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
34,517 55,150 68,331 86,511 110,040 140,583 177,914
9,719 13,128 16,399 20,763 26,410 33,740 42,699
4,426 12,434 15,033 19,032 24,209 30,928 39,141
1,734 2,980 3,758 4,758 6,052 7,732 9,785
6,160 15,414 18,791 23,791 30,261 38,660 48,926
1,315 2,073 2,624 3,322 4,226 5,398 6,832
8,961 13,544 16,399 20,763 26,410 33,740 42,699
3,083 7,879 9,840 12,458 15,846 20,244 25,620
4,929 6,306 8,200 10,381 13,205 16,870 21,350
18,288 29,802 37,063 46,924 59,686 76,252 96,500
(12,128) (14,388) (18,272) (23,133) (29,425) (37,592) (47,574)
4,285 2,260 3,884 4,861 6,292 8,167 9,982
4,426 12,434 15,033 19,032 24,209 30,928 39,141
12.8% 22.5% 22.0% 22.0% 22.0% 22.0% 22.0%
1,734 2,980 3,758 4,758 6,052 7,732 9,785
5.0% 5.4% 5.5% 5.5% 5.5% 5.5% 5.5%
1,315 2,073 2,624 3,322 4,226 5,398 6,832
13.5% 15.8% 16.0% 16.0% 16.0% 16.0% 16.0%
8,961 13,544 16,399 20,763 26,410 33,740 42,699
92.2% 103.2% 100.0% 100.0% 100.0% 100.0% 100.0%
3,083 7,879 9,840 12,458 15,846 20,244 25,620
31.7% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0%
4,929 6,306 8,200 10,381 13,205 16,870 21,350
50.7% 48.0% 50.0% 50.0% 50.0% 50.0% 50.0%
Historicals Forecasts
Mar-20 Mar-21 Mar-22
205,303 226,359 238,802
49,273 54,326 57,313
45,167 49,799 52,537
11,292 12,450 13,134
56,458 62,249 65,671
7,884 8,692 9,170
49,273 54,326 57,313
29,564 32,596 34,388
24,636 27,163 28,656
111,356 122,777 129,526
(54,898) (60,528) (63,856)
7,324 5,630 3,327
45,167 49,799 52,537
22.0% 22.0% 22.0%
11,292 12,450 13,134
5.5% 5.5% 5.5%
7,884 8,692 9,170
16.0% 16.0% 16.0%
49,273 54,326 57,313
100.0% 100.0% 100.0%
29,564 32,596 34,388
60.0% 60.0% 60.0%
24,636 27,163 28,656
50.0% 50.0% 50.0%
Forecasts
Alibaba IPO
Consolidated Depreciation and Capex
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13
Net Sales 6,670 11,903 20,025 34,517
Capital Expenditures 2,168 2,503
Capital Expenditures as % of Net Sales -10.8% -7.3%
Beginning Net PP&E
Capital Expenditures
(Depreciation Expense)
(Asset Sales )
Ending Net PP&E
(as of Dec'2013) below are gross amounts
PPE (Break-up for 2014) 2013 2014
Computer equipment and software 3,640.0 5,772.0
Furniture, office and transportation equipment 242.0 267.0
Buildings 892.0 2,630.0
Construction in progress 1,720.0 737.0
Total 6,494.0 9,406.0
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)
Year Capex Useful Life
2015 4193.1168 3.0
2016 5308.7517 3.0
2017 6752.6335 3.0
2018 8626.86 3.0
Historicals
2019 10917.682 3.0
2020 12598.449 3.0
2021 13890.542 3.0
2022 14654.125 3.0
Depreciation (Computer equipment and software)
Furniture, office and transportation equipment
Useful Life 4
Furniture, office and transportation equipment 267.0
Depreciation Expense (existing)
Year Capex Useful Life
2015 194.0 3.0
2016 245.6 3.0
2017 312.4 3.0
2018 399.1 3.0
2019 505.0 3.0
2020 582.8 3.0
2021 642.5 3.0
2022 677.9 3.0
Total Depreciation (Furniture, office and transportation equipment)
Buildings
Useful Life 20
Buildings 2,630.0
Depreciation Expense (existing)
Year Capex Useful Life
2015 1,910.6 3.0
2016 2,418.9 3.0
2017 3,076.8 3.0
2018 3,930.8 3.0
2019 4974.6196 3.0
2020 5740.4576 3.0
2021 6329.1969 3.0
2022 6677.1219 3.0
Total Depreciation (Buildings)
Total Depreciation Expense
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
55,150 68,331 86,511 110,040 140,583 177,914 205,303
4,336 6,833 8,651 11,004 14,058 17,791 20,530
-7.9% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
5,973.0 10,115.2 13,697.0 16,612.5 18,732.4 19,693.2
6,833.1 8,651.1 11,004.0 14,058.3 17,791.4 20,530.3
(2,690.9) (5,069.3) (8,088.5) (11,938.3) (16,830.6) (22,717.1)
5,973.0 10,115.2 13,697.0 16,612.5 18,732.4 19,693.2 17,506.4
below are gross amounts
Useful Life 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
4,193 5,309 6,753 8,627 10,918 12,598
194 246 312 399 505 583
1,911 2,419 3,077 3,931 4,975 5,740
535 678 862 1,102 1,394 1,609
1,443.0 1,443.0 1,443.0 1,443.0 1,443.0 1,443.0
698.9 1,397.7 1,397.7 1,397.7 1,397.7 1,397.7
884.8 1,769.6 1,769.6 1,769.6 1,769.6
1,125.4 2,250.9 2,250.9 2,250.9
1,437.8 2,875.6 2,875.6
Historicals Forecasts
1,819.6 3,639.2
2,099.7
2,141.9 3,725.5 5,735.7 8,299.0 11,556.4 15,475.8
66.8 66.8 66.8 66.8 66.8 66.8
32.3 64.7 64.7 64.7 64.7 64.7
40.9 81.9 81.9 81.9 81.9
52.1 104.1 104.1 104.1
66.5 133.0 133.0
84.2 168.3
97.1
99.1 172.3 265.3 383.9 534.6 715.9
131.5 131.5 131.5 131.5 131.5 131.5
318.4 636.9 636.9 636.9 636.9 636.9
403.2 806.3 806.3 806.3 806.3
512.8 1,025.6 1,025.6 1,025.6
655.1 1,310.3 1,310.3
829.1 1,658.2
956.7
449.9 1,171.5 2,087.5 3,255.4 4,739.7 6,525.5
2,690.9 5,069.3 8,088.5 11,938.3 16,830.6 22,717.1
Mar-21 Mar-22
226,359 238,802
22,636 23,880
10.0% 10.0%
17,506.4 10,794.5
22,635.9 23,880.2
(29,347.8) (36,493.0)
10,794.5 (1,818.3)
13,891 14,654
643 678
6,329 6,677
1,774 1,871
1,443.0 1,443.0
1,397.7 1,397.7
1,769.6 1,769.6
2,250.9 2,250.9
2,875.6 2,875.6
Forecasts
3,639.2 3,639.2
4,199.5 4,199.5
2,315.1 4,630.2
2,442.4
19,890.6 24,648.0
66.8 66.8
64.7 64.7
81.9 81.9
104.1 104.1
133.0 133.0
168.3 168.3
194.3 194.3
107.1 214.2
113.0
920.1 1,140.2
131.5 131.5
636.9 636.9
806.3 806.3
1,025.6 1,025.6
1,310.3 1,310.3
1,658.2 1,658.2
1,913.5 1,913.5
1,054.9 2,109.7
1,112.9
8,537.1 10,704.8
29,347.8 36,493.0
Alibaba IPO
Consolidated Amortization & Intangible
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Net Sales 6,670 11,903 20,025 34,517 55,150
Additions to Intangibles 106.0 1469.0
Additions to Intangibles as % of Net Sales 0.3% 2.7%
Beginning Net Intangibles
Additions to Intangibles
(Amortization Expense)
(Intangible Sales and write offs)
Ending Net Intangibles 1,610.0
Historicals
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
68,331 86,511 110,040 140,583 177,914 205,303 226,359
2391.6 3027.9 3851.4 4920.4 6227.0 7185.6 7922.6
3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5%
1,610.0 3,930.6 6,916.5 10,737.9 15,632.3 21,813.2 28,948.8
2,391.6 3,027.9 3,851.4 4,920.4 6,227.0 7,185.6 7,922.6
(71.0) (42.0) (30.0) (26.0) (46.0) (50.0) (50.0)
3,930.6 6,916.5 10,737.9 15,632.3 21,813.2 28,948.8 36,821.4
Forecasts
Mar-22
238,802
8358.1
3.5%
36,821.4
8,358.1
(50.0)
45,129.5
Forecasts
Alibaba IPO
Debt Schedule
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13
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
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 48,550
Average Cash Balance
Interest Earned 2%
Historicals
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
26,056.1 34,736.8 46,194.7 60,635.7 76,867.8
48,550.0 64,630.1 89,336.8 131,731.5 191,888.2
(10,000.0) (10,000.0) (10,000.0) (10,000.0) (10,000.0)
38,550.0 54,630.1 79,336.8 121,731.5 181,888.2
- - - - -
(8,776.0) (10,030.0) (3,800.0) (479.0) (479.0)
29,774.0 44,600.1 75,536.8 121,252.5 181,409.2
1,200.0 - - - -
(1,200.0) - - - -
1,200.0 - - - - -
30,226.0 21,450.0 11,420.0 7,620.0 7,141.0
(8,776.0) (10,030.0) (3,800.0) (479.0) (479.0)
30,226.0 21,450.0 11,420.0 7,620.0 7,141.0 6,662.0
600 - - - -
6.0% 6.0% 6.0% 6.0% 6.0%
36.0 - - - -
25,838 16,435 9,520 7,381 6,902
6.3% 6.3% 6.3% 6.3% 6.3%
1,628 1,035 600 465 435
1,664 1,035 600 465 435
64,630 89,337 131,732 191,888 268,277
56,590 76,983 110,534 161,810 230,083
1,132 1,540 2,211 3,236 4,602
Historicals Forecasts
Mar-20 Mar-21 Mar-22
86,525.7 95,904.4 101,563.5
268,277.0 354,323.7 449,749.1
(10,000.0) (10,000.0) (10,000.0)
258,277.0 344,323.7 439,749.1
- - -
(479.0) (479.0) (479.0)
257,798.0 343,844.7 439,270.1
- - -
- - -
- - -
6,662.0 6,183.0 5,704.0
(479.0) (479.0) (479.0)
6,183.0 5,704.0 5,225.0
- - -
6.0% 6.0% 6.0%
- - -
6,423 5,944 5,465
6.3% 6.3% 6.3%
405 374 344
405 374 344
354,324 449,749 550,834
311,300 402,036 500,291
6,226 8,041 10,006
Forecasts
Alibaba IPO
Consolidated Shareholder's Equity
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13
Beginning Equity Balance
Net Income
Issuance/ (Repurchase) of Equity
Ending Equity Balance
Historicals
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
40,963.0 69,598.2 106,041.2 152,681.1 212,164.2 286,191.3
28,635.2 36,443.0 46,639.9 59,483.1 74,027.2 84,150.5
-
40,963.0 69,598.2 106,041.2 152,681.1 212,164.2 286,191.3 370,341.8
Historicals Forecasts
Mar-21 Mar-22
370,341.8 461,776.6
91,434.8 93,931.4
461,776.6 555,708.0
Forecasts
Alibaba IPO
Valuing Alibaba's Options
Assumptions
Inputs for Black-Scholes Model
Enter the current stock price = 70 $70 is expected IPO price; converting to RMB
Enter the strike price on the option = 12.33
Enter the expiration of the option = 4.1
Enter the standard deviation in stock prices = 42.00%
Enter the annualized dividend yield on stock = 0.00%
Enter the treasury bond rate = 2.70%
Enter the number of warrants (options) outstanding = 54.28
Enter the number of shares outstanding = 2,446,646
Calculation of Box Inc Option
Stock Price= 70
Strike Price= 12.33
Adjusted S = 70.0
Adjusted K = 12.33
Expiration (in years) = 4.1
Options Issued 54
Total Shares outstanding 2,446,646
T Bond Rate 2.70%
Variance 0.1764
Annualized dividend yield 0.00%
Interest Rate 2.70%
d1 = 2.5972
N (d1) = 0.9953
d2 = 1.7468
N (d2) = 0.9597
Value per Alibaba's option = 59.08 $
Value of all Alibaba's options outstanding = $3,207
$70 is expected IPO price; converting to RMB
Alibaba IPO
Shares Oustanding Schedule
Common Shares
Current Structure
-
Ordinary Shares 2,321,114,237
Ordinary Shares 47,670,100 issuable upon vesting
Ordinary Shares 77,861,552 future issuable
Ordinary Shares Issued through IPO << put your number here
2,446,645,889
Options Data

SharesSubjectto
Outstanding Options
Weighted-
AverageExercise
Price
Outstanding at March 31, 2013 (i) 26,189,060
Options granted 8,095,500
Options exercised (16,619,426)
Cancelled/forfeited/expired (1,308,213)
Outstanding at December 31, 2013 (i) 16,356,921 12.33
Total Number of outstanding options provided in the prospectus 54,279,500
(see below)
Weighted-Average Remaining
ContractualLife (Years)
Aggregate IntrinsicValue (in
thousands)
4.1
Alibaba IPO
DCF Valuations
Free Cash Flow Projections
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11
EBIT (873) 1,322
Free Cash Flow to Firm
EBIT x (1-t) (1,420) 1,099
Add: Depreciation & amortization
Less: Capex
Add: Change in working capital
FCFF
Cost of Capital 9.0%
Infinite growth rate 3%
Mar-10 Mar-11
Cash Flows
NPV of explicit period 321,953
Terminal value @ perpetual growth (2019) Mar-10 Mar-11
Terminal value as of 2019
NPV of terminal value 812,148
DCF calculation as of Valuation (RMB) Valuation (US$)
NPV of explicit period 321,953 51,791
NPV of terminal value 812,148 130,646
Enterprise Value 1,134,100 182,437
+ Cash $48,550 7,810
- Debt ($40,310) (6,484)
Equity value 1,142,340 183,851
+ Short term investments, restricted cash, investment securities 12,587 2,025
+Investment in equity investees 13,009 2,093
+ Alipay valuation 24,866 4,000
Stock Option Value $3,207 516
Adjusted Equity Value 1,189,595 191,452
Historicals
Free cash flow to firm of explicit period (2015E to 2019E)
DCF Valuation Summary
Share Price 486.21 78.25
Sensitivity Analysis
191.45
1%
2%
3%
4%
5%
6.0%
g
r
o
w
t
h
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
5,015 10,751 26,514 33,072 41,871 53,260
4,252 9,202 24,575 29,103 36,009 45,271
715 805 947 2,691 5,069 8,089
(749) (1,046) (3,010) (9,225) (11,679) (14,855)
4,285 2,260 3,884 4,861 6,292
13,246 24,772 26,453 34,261 44,795
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
26,453 34,261 44,795
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
0 0 -
$191.5 billion dollars
Historicals Forecasts
Free cash flow to firm of explicit period (2015E to 2019E)
7% 8% 9% 10% 11%
214 181 157 138 123
246 203 172 149 131
293 232 191 163 141
372 276 219 181 154
529 350 261 207 171
1,002 498 330 246 196
WACC
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
68,042 86,110 99,367 109,558 115,580
57,155 70,610 79,493 85,455 86,685
11,938 16,831 22,717 29,348 36,493
(18,979) (24,018) (27,716) (30,558) (32,238)
8,167 9,982 7,324 5,630 3,327
58,282 73,405 81,819 89,875 94,267
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
58,282 73,405 81,819 89,875 94,267
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
- - - - 1,618,255
Forecasts
Free cash flow to firm of explicit period (2015E to 2019E)
2.416949153