1. Alibaba
The University of
Texas at Dallas
Chuan-Wen Tsai
Wang-Chang, Tsai
Yi-Chun, Cheng
Heng, Lin
Huishan Huang
Wei Hung Lin

2. Introduction
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
Basic Information
Ticker BABA
Exchange NYSE
Industry Specialty Retail,
Other
Sector Services
Market Information
52 week price range $57.2-95.06
Market Cap $168,257.3(mm)
Share Out. 2,512.4
Avg. Daily Volume 17.57
Float % 41.9%
Institutional Ownership 26.98%
Diluted EPS 4.11
Beta 1.34
TEV/LTM Revenue 11.6x
TEV/LTM EBITDA 35.7x
P/E 16.29
Forword P/E 3.01
ROE 34.7%
Equity Owners

3. Recommendation
Key drivers
1. Growing E-commerce demand
2. Diversified business
3. Improved logistic
4. Increased internet popularity in
rural area
5. International operations
Current price: $67.26
Target price: $76.2
BUY
Recommendation
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion

4. Business description
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
• Founded by Chung
Tsai and Yun Ma in
1999, China
• Provide retail and
wholesale trade
online and on mobile;
cloud computing and
other services.

5. Business Strategy
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
Alibaba
Wholesale platform
that provides B2B
service
Tmall
Third-party platform
for brands and
retailers that
provides B2C service
Taobao
Retail platform that
provides C2C service
Flash sales
11/11 Singles Day

6. SWOT
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
STRENGTHS
Largest online trading player in
China
B2B and C2C market leader
Sufficient funding sources
Mass information sources
OPPORTUNITIES
Potential US Market
Thrive e-commerce future
Growing internet utility
THREATS
Growing competitors
New law restriction
lack of a solid network security
Global economic crises
WEAKNESSES
Illegal, counterfeit products
Low brand recognition

7. Industry Analysis

8. Industry Overview
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
• China has transform form
manufacturing-based economy to
service-based economy
• Government reduces tax, lower fees,
improves administrative procedures,
promotes high-tech companies
• Results: Increasing consumer
demand, growing sectors in
telecommunications, e-commerce,
and energy
E-commerce Market in 2015

9. Industry Overview
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
• China’s e-commerce retail sales are
expected to grow by 42.1% to
US$672.01 billion and is expected to
reach US$1.57 billion in 2018
• Account for over 40% of the global
e-commerce retail market in 2015,
estimated by eMarketer
• China is the world’s leading e-
commerce player
• Mobile-commerce is predicted to
reach US$333.99 billion in 2015,
account for around half of China’s
total retail e-commerce sales.
Mobile-commerce sales in 2015

10. Porter Five Forces Analysis
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
Rivalry
among
Existing
Firms
High
Threats of
entrance of
the new
enterprises
High
Threats of
substitute
products or
services
High
Bargaining
power of
Buyers
High
Bargaining
Power of
Suppliers
Low

11. Financial Analysis

12. D/E ratio and Cash Flow
Company Overview Conclusion
Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis
Competitors
-BIDU, EBAY, NTES, AMZN
D/E ratio
- Second low D/E ratio among its competitors
- Less interest payment
- Sound financial position
Cash Flow
- Positive CFO
- Lowest days sales outstanding among all its opponents
- Reinvest its earning faster than its competitors

13. ROE
Company Overview Conclusion
Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis
BABA BIDU EBAY NTES AMZN
ROE 34.7% 19.5% 14.7% 24% 4.9%
BABA BIDU EBAY NTES AMZN
Profit
Margin
73.1% 19.7% 20.1% 31.8% 0.6%
Assets
Turnover
0.3 0.6 0.3 0.6 1.8
Equity
Multiple
1.58 1.65 2.44 1.26 4.54
DuPont Analysis

14. ROE
Company Overview Conclusion
Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis

15. Valuation

16. Technical Analysis
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
Alibaba has experienced a long period of correction. The
price is recovering from the support. We believe the price
will bounce up more in the future.

17. Technical Analysis
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
The signal line is going to move up to cross above
MACD, this could be a signal to buy.

18. DCF
Industry &
Competitors
Financial
Analysis
Company Overview Valuation RiskAnalysis Conclusion
Discounted Cash Flow Model
• Three years forecast, one terminal year
• Implied $62.05/share
• However, we made assumptions that
possibly make less precise price. We
assigned 20% weighted to the final
target price.
WACC 8.7%
Cost of Equity 10.12%
Cost of Debt 5.23%
Equity 76%
Debt 24%

19. P/E EV/EBIT
$75.54
50% 50%Weights for multipliers
2016 2016Forward years
$70.01 $81.07Multipliers’ values
Multipliers
Forward P/E Valuation and Multipliers Pricing
Company Overview Conclusion
Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis
2016E
EPS 3.33
P/E ratio 25.2x
Forward P/E Valuation
Multipliers Pricing
$83.9

20. $76.2
DCF analysis
20%
Multiples analysis
40%
Target price
Company Overview Conclusion
Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis
Year-end target price
Upside : 13.27%
Forward P/E analysis
40%
$62.05
$75.54
$83.9

21. Risk Analysis

22. Main risks
Company Overview Conclusion
Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis
Fluctuation of exchange rates
- The functional currency of the Company is the United
States Dollar ("US$") and reporting currency of the
Company is Renminbi ("RMB").
- Gains and losses arising from foreign currency translations
Operating risk
- Illegal, counterfeit products
- Reputation damage
- Face lawsuits
- Assurance program

23. Conclusion

24. Company Overview Industry &
Competitors
Financial
Analysis
Valuation Risk Analysis Conclusion
Conclusion
12 M Target price Upside potential
$76.2 13.27%
Sound
financial
position
BUY
Positive
return
Diversified
business
Growing
E-commerce
demand