alibaba ipo financial model wallstreetmojo

8/10/2019 Alibaba IPO Financial Model WallstreetMojo

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Alibaba IPOPrepared by - Dheeraj Vaidya, CFA, FRMemail - [email protected]: www.wallstreetmojo.com www.educorporatebridge.com

Core Financial StatementsQuarterly ISIncome StatementBalance SheetCash Flows

Supporting Financial Modeling SchedulesDebtWorking Capital

Depreciation ScheduleAmortization ScheduleShareholder's EquityShares Oustanding

ValuationsDCF ValuationOption Value
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Alibaba IPOQuarterly 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 assetsImpairment 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)


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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%


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30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-132012 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


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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%


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31-Mar-142014

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%


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707 35%

14,677

3,229 22%

1,321 9%

1,468 10%

1,614 11%


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Alibaba IPO

(RMB in Million Except Per Share Amounts) Mar-13 Mar-14 Mar-15

RevenueChina 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 inte (117) (29) Net income (loss) attributable to Alibaba Group Hol 8,532 24,758 28,635

Accretion of redeemable convertible preferred stoc (17) (24) Dividends accrued on convertible preference share (111) (156) Net loss attributable to common stockholders 8,404 24,578 28,635

EBITDAIncome from Operations 33,072

Add: Share-based compensation expense 2,392 Add: D&A 2,691

Adjusted EBITDA 38,154

Historicals


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Growth Analysis and Drivers

Revenue

China commerceRetail (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 commerceRetail (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%


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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


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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%


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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


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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%


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Alibaba IPOAnnual Balance Sheet

(RMB in Million Except Per Share Amounts) Mar-10

ASSETSCurrent assets:Cash and cash equivalentsShort-term investmentsRestricted cash and escrow receivablesLoan receivables, netInvestment securitiesPrepayments, receivables and other assetsTotal current assets

Investment in equity investeesInvestment securitiesPrepayments, receivables and other assetsProperty and equipment, netLand use rightsIntangible assetsGoodwillTotal assets

LIABILITIESCurrent liabilities:Current bank borrowingsSecured borrowingsIncome tax payableEscrow money payableAccrued expenses, accounts payable and other liabilitiesMerchant depositsDeferred revenue and customer advancesTotal current liabilities

Deferred revenueDeferred tax liabilitiesRedeemable Preference SharesNon-current bank borrowingsOther liabilities

Total liabilities

Mezzanine equity:


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Others

Total mezzanine equity

Alibaba Group Holding Limited shareholders equity:

Ordinary shares

Additional paid-in capital

Treasury shares at cost

Subscription receivablesStatutory 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


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Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

proforma

16,857 30,396 48,550 64,630 89,337 131,7324,887 2,290 7,248 7,248 7,248 7,2483,312 3,687 4,244 4,244 4,244 4,244

581 4,426 12,434 15,033 19,032 24,209593 629 1,207 1,207 1,207 1,207

1,669 1,734 2,980 3,758 4,758 6,05227,899 43,162 76,663 96,120 125,826 174,692

1,642 1,555 13,009 13,009 13,009 13,009248 242 1,095 1,095 1,095 1,095

1,466 1,496 2,041 2,041 2,041 2,0412,463 3,808 5,973 10,115 13,697 16,6121,701 1,895 1,863 1,863 1,863 1,863

355 334 1,610 3,931 6,916 10,73811,436 11,294 11,640 11,640 11,640 11,64047,210 63,786 113,894 139,814 176,088 231,690

1,283 3,350 1,200 0 0 00 2,098 8,884 8,884 8,884 8,884

375 259 451 451 451 451339 1,315 2,073 2,624 3,322 4,226

4,659 8,961 13,544 16,399 20,763 26,410745 3,083 7,879 9,840 12,458 15,846

4,350 4,929 6,306 8,200 10,381 13,20511,751 23,995 40,337 46,398 56,259 69,021

529 389 396 396 396 396413 643 1,774 1,774 1,774 1,7740 5191 0 0 0 00 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


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30 86 12630 10533 126 126 126 126

1 1 1

20,778 21,655 36,173

0 0 0

-819 -852 -4931,096 1,337 2,388

-2121 -1666 -7871 -8 139

12552 -20491 -430731,488 -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

- - - -


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191,888 268,277 354,324 449,749 550,8347,248 7,248 7,248 7,248 7,2484,244 4,244 4,244 4,244 4,244

30,928 39,141 45,167 49,799 52,5371,207 1,207 1,207 1,207 1,2077,732 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 13,0091,095 1,095 1,095 1,095 1,0952,041 2,041 2,041 2,041 2,041

18,732 19,693 17,506 10,794 -1,8181,863 1,863 1,863 1,863 1,863

15,632 21,813 28,949 36,821 45,12911,640 11,640 11,640 11,640 11,640

307,260 401,057 499,584 601,961 702,162

0 0 0 0 08,884 8,884 8,884 8,884 8,884

451 451 451 451 4515,398 6,832 7,884 8,692 9,170

33,740 42,699 49,273 54,326 57,31320,244 25,620 29,564 32,596 34,38816,870 21,350 24,636 27,163 28,65685,587 105,835 120,691 132,112 138,861

396 396 396 396 3961,774 1,774 1,774 1,774 1,7740 0 0 0 0

7,141 6,662 6,183 5,704 5,22572 72 72 72 72

94,970 114,739 129,116 140,058 146,328


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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

- - - - -


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Alibaba IPOAnnual Cash Flows

(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-CASH FLOWS FROM OPERATING ACTIVITIES:Net income 4,665 8,649 24,578 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 Amortization of intangible assets 155 130 197

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 escrow receivables (113) (974) (760) Loan receivables (226) (2,828) (8,367) Prepayments, receivables and other assets (240) (354) (1,241) Income tax payable 230 (116) 192 Escrow money payable 94 976 758 Accrued expenses, accounts payable and other liabilities 1,332 3,657 4,526 Merchant deposits 583 2,338 4,796 Deferred revenue and customer advances 128 437 1,384

Net cash used in operating activities 9,275 14,476 31,415

CASH FLOWS FROM INVESTING 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) 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)

Cash Flow available for Financing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of ordinary shares, including repayment of loan and interest receivable o 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)

Historicals


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Alibaba IPOWorking Capital

(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12Net Sales 6,670 11,903 20,025 Cost of Sales 1,634 3,497 6,554

Working Capital BalancesLoan 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%

Historical


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Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-1934,517 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%

Forecasts


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Mar-20 Mar-21 Mar-22205,303 226,359 238,802

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%


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Alibaba IPOConsolidated Depreciation and Capex

(RMB in Million Except Per Share Amou Mar-10 Mar-11 Mar-12 Mar-13Net 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&ECapital Expenditures(Depreciation Expense)(Asset Sales )Ending Net PP&E

(as of Dec'2013) below are gross amountsPPE (Break-up for 2014) 2013 2014Computer 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 CapexBreakup

Computer equipment and softwareFurniture, office and transportation equipmentBuildingsConstruction in progress

Computer equipment and software - Straight Line Method

Useful Life 4Computer equipment and software 5,772 Depreciation Expense (existing)

Year Capex Useful Life2015 4193.1168 3.0 2016 5308.7517 3.0 2017 6752.6335 3.0 2018 8626.86 3.0

Historicals


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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 equipmentUseful Life 4Furniture, office and transportation equipm 267.0 Depreciation Expense (existing)

Year Capex Useful Life2015 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)

BuildingsUseful Life 20Buildings 2,630.0

Depreciation Expense (existing)

Year Capex Useful Life2015 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


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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

Useful Life Proportion of Assets4 61.4%4 2.8%

20 28.0% Straight Line Method of Depreciation7.8% 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

Forecasts


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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


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Mar-21 Mar-22226,359 238,802

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


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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


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Alibaba IPOConsolidated Amortization & Intangible

(RMB in Million Except Per Share Amou Mar-10 Mar-11 Mar-12 Mar-13 Mar-14Net 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


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2391.6 3027.9 3851.4 4920.4 6227.0 7185.6 7922.63.5% 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


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Mar-22238,802

8358.13.5%

36,821.4 8,358.1

(50.0)

45,129.5


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Alibaba IPODebt Schedule

(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13Cash Flow Available for Financing ActivitiesProceeds from/ (Repurchase of) Equity+ Beginning Cash Balance- Minimum Cash BalanceCash Available for Debt RepaymentLong Term Debt IssuanceLong Term Debt (Repayments)Cash Available for Revolving Credit Facility

Additional Revolving Credit FacilityBeginning BalanceDiscretionary (Paydown)/ BorrowingsEnding Balance

Long Term (commited payments)Beginning BalanceIssuance(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


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Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-1926,056.1 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

Forecasts


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Mar-20 Mar-21 Mar-2286,525.7 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


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Alibaba IPOConsolidated Shareholder's Equity

(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12 Mar-13Beginning Equity BalanceNet IncomeIssuance/ (Repurchase) of EquityEnding Equity Balance

Historicals


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Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-2040,963.0 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

Forecasts


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Mar-21 Mar-22370,341.8 461,776.6

91,434.8 93,931.4

461,776.6 555,708.0


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Alibaba IPOValuing Alibaba's Options

AssumptionsInputs for Black-Scholes ModelEnter the current stock price = 70 $70 is expected IPO price; converting to RMEnter the strike price on the option = 12.33Enter the expiration of the option = 4.1Enter 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= 70Strike Price= 12.33Adjusted S = 70.0Adjusted K = 12.33Expiration (in years) = 4.1

Options Issued 54Total Shares outstanding 2,446,646T Bond Rate 2.70%Variance 0.1764Annualized 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


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Alibaba IPOShares Oustanding Schedule

Common Shares

Current Structure-

Ordinary Shares 2,321,114,237 Ordinary Shares 47,670,100 issuable upon vestingOrdinary Shares 77,861,552 future issuableOrdinary Shares Issued through IPO


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Weighted-Average RemainingContractual Life (Years) Aggregate Intrinsic Value (inthousands)

4.1


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Alibaba IPODCF Valuations

Free Cash Flow Projections

(RMB in Million Except Per Share Amount Mar-10 Mar-11

EBIT (873) 1,322

Free Cash Flow to FirmEBIT x (1-t) (1,420) 1,099 Add: Depreciation & amortizationLess: CapexAdd: Change in working capitalFCFF

Cost of Capital 9.0%Infinite growth rate 3%

Mar-10 Mar-11Cash Flows

NPV of explicit period 321,953

Terminal value @ perpetual growth (2019) Mar-10 Mar-11Terminal 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 s 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

His

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

DCF Valuation Summary


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Share Price 486.21 78.25

Sensitivity Analysis

191.45 1%

2%3%4%5%

6.0%

g r o w t h


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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-1726,453 34,261 44,795

Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-170 0 -

$191.5 billion dollars

toricals Forecasts


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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


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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-2258,282 73,405 81,819 89,875 94,267

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22- - - - 1,618,255


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2.416949153

alibaba ipo financial model wallstreetmojo

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