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
30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13
2012 2012 2012 2013 2013

5,601 6,152 10,172 7,242 9,193

974 1,049 1,094 1,043 1,117
155 164 165 166 174
63 92 162 223 294
6,793 7,457 11,593 8,674 10,778

(2,158) (2,373) (2,911) (2,277) (2,727)

4,635 5,084 8,682 6,397 8,051

(848) (888) (1,163) (854) (1,018)

(869) (974) (1,249) (521) (713)
(537) (804) (1,003) (545) (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 10,172 7,242 9,193

9.8% 65.3% -28.8% 26.9%

974 1,049 1,094 1,043 1,117

7.7% 4.3% -4.7% 7.1%

155 164 165 166 174

5.8% 0.6% 0.6% 4.8%
 63 92 162 223 294
46.0% 76.1% 37.7% 31.8%

6,793 7,457 11,593 8,674 10,778

2,158 2,373 2,911 2,277 2,727

31.8% 31.8% 25.1% 26.3% 25.3%

848 888 1,163 854 1,018

12.5% 11.9% 10.0% 9.8% 9.4%

869 974 1,249 521 713

12.8% 13.1% 10.8% 6.0% 6.6%

537 804 1,003 545 865

7.9% 10.8% 8.7% 6.3% 8.0%
ed
30-Sep-13 31-Dec-13 31-Mar-14
2013 2013 2014

9,213 16,761 12,571

1,176 1,264 1,201
190 196 198
371 524 707
10,950 18,745 14,677

(3,001) (4,171) (3,229)

7,949 14,574 11,448

(1,168) (1,707) (1,321)

(657) (1,897) (1,468)
(793) (2,046) (1,614)

- - -

(5,702) (9,944) (7,632)

5,248 8,801 7,045

4,883 8,266

864 659

9,213 16,761 12,571

0.2% 81.9% -25%

1,176 1,264 1,201

5.3% 7.5% -5%

190 196 198

9.2% 3.2% 1%
 371 524 707
26.2% 41.2% 35%

10,950 18,745 14,677

3,001 4,171 3,229

27.4% 22.3% 22%

1,168 1,707 1,321

10.7% 9.1% 9%

657 1,897 1,468

6.0% 10.1% 10%

793 2,046 1,614

7.2% 10.9% 11%
Alibaba IPO
Historicals
(RMB in Million Except Per Share Amounts) Mar-13

Revenue
China commerce 29,167
International commerce 4,160
Cloud computing and Internet infrastructure 650
Others 540
Total 34,517

Cost of revenue (9,719)

Gross profit 24,798

Operating expenses:
Product development expenses (3,753)
Sales and marketing expenses (3,613)
General and administrative expenses(2) (2,889)
Amortization of intangible assets (130)
Impairment of goodwill and intangible assets (175)
Yahoo TIPLA amendment payment(3) (3,487)
Total operating expenses (14,047)

Income (loss) from operations 10,751

Interest and investment income (loss), net 39

Interest Expense (1,572)
Other income (expense), net 894

Loss before provision (benefit) for income taxes 10,112

Income tax expenses (1,457)
Share of results of equity investees (6)
Net income (loss) 8,649
Net income (loss) attributable to noncontrolling interests (117)
Net income (loss) attributable to Alibaba Group Holding Limited 8,532

Accretion of redeemable convertible preferred stock (17)

Dividends accrued on convertible preference shares (111)
Net loss attributable to common stockholders 8,404

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

Growth Analysis and Drivers

Revenue

China commerce
Retail (i) 26970
% yoy 101%
Wholesale (i) 2197
% yoy -1%
Total China commerce 29,168
87%

International commerce
Retail (i) 392
% yoy 76%
Wholesale (i) 3768
% yoy 6%
Total international commerce 4,161
% yoy 11%

Cloud computing and Internet infrastructure (ii) 650

% yoy 26%
Others (iii) 540
% yoy 400%

Total 34,519
% yoy 72%

Cost of revenue 9,719

% sales 28.2%

Product development expenses 3,753

% sales 10.9%

Sales and marketing expenses 3,613

% sales 10.5%

General and administrative expenses(2) 2,889

% sales 8.4%

Share based compensation expense 1259

% Sales 3.6%
Effective tax rates 14.4%
Historicals Forecasts
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

47,738 60,571 76,971 97,936 124,741

4,758 5,388 6,247 7,443 9,141
758 588 617 648 681
1,896 1,784 2,675 4,013 6,019
55,150 68,331 86,511 110,040 140,583

(13,128) (16,399) (20,763) (26,410) (33,740)

42,022 51,931 65,748 83,631 106,843

(5,214) (6,491) (8,219) (10,454) (13,355)

(4,735) (5,808) (7,353) (9,353) (11,950)
(5,318) (6,560) (8,305) (10,564) (13,496)
(197) - - - -
(44) - - - -
-
(15,508) (18,859) (23,877) (30,371) (38,801)

26,514 33,072 41,871 53,260 68,042

1,080 1,132 1,540 2,211 3,236

(1,842) (1,664) (1,035) (600) (465)
1,178

26,930 32,540 42,376 54,870 70,813

(1,969) (3,905) (5,933) (8,231) (11,330)
(174)
24,787 28,635 36,443 46,640 59,483
(29)
24,758 28,635 36,443 46,640 59,483

(24)
(156)
24,578 28,635 36,443 46,640 59,483

33,072 41,871 53,260 68,042

2,392 3,028 3,851 4,920
2,691 5,069 8,089 11,938
 38,154 49,969 65,199 84,901

45421 58,139 74,418 95,255 121,926

68% 28% 28% 28% 28%
2316 2,432 2,553 2,681 2,815
5% 5% 5% 5% 5%
47,738 60,571 76,971 97,936 124,741
64% 27% 27% 27% 27%

873 1,310 1,964 2,946 4,420

123% 50% 50% 50% 50%
3884 4,078 4,282 4,496 4,721
3% 5% 5% 5% 5%
4,758 5,388 6,247 7,443 9,141
14% 13% 16% 19% 23%

560 588 617 648 681

-14% 5% 5% 5% 5%
1189 1,784 2,675 4,013 6,019
120% 50% 50% 50% 50%

54,245 68,331 86,511 110,040 140,583

57% 26% 27% 27% 28%

13,128 16,399 20,763 26,410 33,740

23.8% 24% 24% 24% 24%

5,214 6,491 8,219 10,454 13,355

9.5% 10% 10% 10% 10%

4,735 5,808 7,353 9,353 11,950

8.6% 8.5% 8.5% 8.5% 8.5%

5,318 6,560 8,305 10,564 13,496

9.6% 9.6% 9.6% 9.6% 9.6%

1919 2,391.57 3,027.88 3,851.41 4,920.39

3.5% 3.5% 3.5% 3.5% 3.5%
7.3% 12% 14% 15% 16%
Forecasts
Mar-19 Mar-20 Mar-21 Mar-22

156,583 179,775 197,597 207,477

11,587 13,492 14,995 16,221
715 750 788 827
9,029 11,286 12,979 14,277
177,914 205,303 226,359 238,802

(42,699) (49,273) (54,326) (57,313)

135,214 156,030 172,033 181,490
29,040.5

(16,902) (19,504) (21,504) (22,686)

(15,123) (17,451) (19,241) (20,298)
(17,080) (19,709) (21,730) (22,925)
- - - -
- - - -

(49,104) (56,664) (62,475) (65,909)

86,110 99,367 109,558 115,580

4,602 6,226 8,041 10,006

(435) (405) (374) (344)

90,277 105,188 117,224 125,242

(16,250) (21,038) (25,789) (31,310)

74,027 84,151 91,435 93,931

74,027 84,151 91,435 93,931

74,027 84,151 91,435 93,931

86,110 99,367 109,558 115,580

6,227 7,186 7,923 8,358
16,831 22,717 29,348 36,493
109,168 129,269 146,828 160,431

153,627 176,671 194,338 204,055

26% 15% 10% 5%
2,956 3,104 3,259 3,422
5% 5% 5% 5%
156,583 179,775 197,597 207,477
26% 15% 10% 5%

6,629 8,287 9,530 10,483

50% 25% 15% 10%
4,957 5,205 5,465 5,738
5% 5% 5% 5%
11,587 13,492 14,995 16,221
27% 16% 11% 8%

715 750 788 827

5% 5% 5% 5%
9,029 11,286 12,979 14,277
50% 25% 15% 10%

177,914 205,303 226,359 238,802

27% 15% 10% 5%

42,699 49,273 54,326 57,313

24% 24% 24% 24%

16,902 19,504 21,504 22,686

10% 10% 10% 10%

15,123 17,451 19,241 20,298

8.5% 8.5% 8.5% 8.5%

17,080 19,709 21,730 22,925

9.6% 9.6% 9.6% 9.6%

6,226.98 7,185.61 7,922.57 8,358.08

3.5% 3.5% 3.5% 3.5%
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
 Historicals
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
proforma

16,857 30,396 48,550

4,887 2,290 7,248
3,312 3,687 4,244
581 4,426 12,434
593 629 1,207
1,669 1,734 2,980
27,899 43,162 76,663

1,642 1,555 13,009

248 242 1,095
1,466 1,496 2,041
2,463 3,808 5,973
1,701 1,895 1,863
355 334 1,610
11,436 11,294 11,640
47,210 63,786 113,894

1,283 3,350 1,200

0 2,098 8,884
375 259 451
339 1,315 2,073
4,659 8,961 13,544
745 3,083 7,879
4,350 4,929 6,306
11,751 23,995 40,337

529 389 396

413 643 1,774
0 5191 0
0 22,462 30,226
104 60 72

12,797 52,740 72,805

 10,447 0
30 86 126
30 10533 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
47,210 63,786 113,894

-
 Forecasts
Mar-15 Mar-16 Mar-17 Mar-18 Mar-19

64,630 89,337 131,732 191,888 268,277

7,248 7,248 7,248 7,248 7,248
4,244 4,244 4,244 4,244 4,244
15,033 19,032 24,209 30,928 39,141
1,207 1,207 1,207 1,207 1,207
3,758 4,758 6,052 7,732 9,785
96,120 125,826 174,692 243,247 329,902

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
10,115 13,697 16,612 18,732 19,693
1,863 1,863 1,863 1,863 1,863
3,931 6,916 10,738 15,632 21,813
11,640 11,640 11,640 11,640 11,640
139,814 176,088 231,690 307,260 401,057

0 0 0 0 0
8,884 8,884 8,884 8,884 8,884
451 451 451 451 451
2,624 3,322 4,226 5,398 6,832
16,399 20,763 26,410 33,740 42,699
9,840 12,458 15,846 20,244 25,620
8,200 10,381 13,205 16,870 21,350
46,398 56,259 69,021 85,587 105,835

396 396 396 396 396

1,774 1,774 1,774 1,774 1,774
0 0 0 0 0
21,450 11,420 7,620 7,141 6,662
72 72 72 72 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

354,324 449,749 550,834

7,248 7,248 7,248
4,244 4,244 4,244
45,167 49,799 52,537
1,207 1,207 1,207
11,292 12,450 13,134
423,481 524,697 629,203

13,009 13,009 13,009

1,095 1,095 1,095
2,041 2,041 2,041
17,506 10,794 -1,818
1,863 1,863 1,863
28,949 36,821 45,129
11,640 11,640 11,640
499,584 601,961 702,162

0 0 0
8,884 8,884 8,884
451 451 451
7,884 8,692 9,170
49,273 54,326 57,313
29,564 32,596 34,388
24,636 27,163 28,656
120,691 132,112 138,861

396 396 396

1,774 1,774 1,774
0 0 0
6,183 5,704 5,225
72 72 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
Historicals Forecasts
(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 FROM OPERATING 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 escrow receivables (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 - - - - - - - -
Escrow money 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 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) (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 Flow available for Financing Activities 26,056 34,737 46,195 60,636 76,868 86,526 95,904 101,563

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of ordinary shares, including repayment of loan and interest receivable on e 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
PaymentofdividendonConvertiblePreferenceShares (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

Alibaba IPO
Working Capital

Historic
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11
Net Sales 6,670 11,903
Cost of Sales 1,634 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 34,517 55,150 68,331 86,511 110,040
6,554 9,719 13,128 16,399 20,763 26,410

581 4,426 12,434 15,033 19,032 24,209

1,669 1,734 2,980 3,758 4,758 6,052
2,250 6,160 15,414 18,791 23,791 30,261

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
10,093 18,288 29,802 37,063 46,924 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 4,426 12,434 15,033 19,032 24,209

2.9% 12.8% 22.5% 22.0% 22.0% 22.0%

1,669 1,734 2,980 3,758 4,758 6,052

8.3% 5.0% 5.4% 5.5% 5.5% 5.5%

339 1,315 2,073 2,624 3,322 4,226

5.2% 13.5% 15.8% 16.0% 16.0% 16.0%

4,659 8,961 13,544 16,399 20,763 26,410

71.1% 92.2% 103.2% 100.0% 100.0% 100.0%

745 3,083 7,879 9,840 12,458 15,846

11.4% 31.7% 60.0% 60.0% 60.0% 60.0%

4,350 4,929 6,306 8,200 10,381 13,205

66.4% 50.7% 48.0% 50.0% 50.0% 50.0%
 Forecasts
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
140,583 177,914 205,303 226,359 238,802
33,740 42,699 49,273 54,326 57,313

30,928 39,141 45,167 49,799 52,537

7,732 9,785 11,292 12,450 13,134
38,660 48,926 56,458 62,249 65,671

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
76,252 96,500 111,356 122,777 129,526

(37,592) (47,574) (54,898) (60,528) (63,856)

8,167 9,982 7,324 5,630 3,327

30,928 39,141 45,167 49,799 52,537

22.0% 22.0% 22.0% 22.0% 22.0%

7,732 9,785 11,292 12,450 13,134

5.5% 5.5% 5.5% 5.5% 5.5%

5,398 6,832 7,884 8,692 9,170

16.0% 16.0% 16.0% 16.0% 16.0%

33,740 42,699 49,273 54,326 57,313

100.0% 100.0% 100.0% 100.0% 100.0%

20,244 25,620 29,564 32,596 34,388

60.0% 60.0% 60.0% 60.0% 60.0%

16,870 21,350 24,636 27,163 28,656

50.0% 50.0% 50.0% 50.0% 50.0%
Alibaba IPO
Consolidated Depreciation and Capex

Historicals
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12
Net Sales 6,670 11,903 20,025
Capital Expenditures 2,168
Capital Expenditures as % of Net Sales -10.8%

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
Computer equipment and software 3,640.0
Furniture, office and transportation equipment 242.0
Buildings 892.0
Construction in progress 1,720.0

Total 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)

Year Capex Useful Life

2015 4193.11684 3.0
2016 5308.75168 3.0
 2017 6752.63347 3.0
2018 8626.86002 3.0
2019 10917.682289 3.0
2020 12598.449184 3.0
2021 13890.54159 3.0
2022 14654.124563 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 4974.6196153 3.0
2020 5740.457615 3.0
2021 6329.1968785 3.0
2022 6677.121899 3.0

Total Depreciation (Buildings)

Total Depreciation Expense

Historicals Forecasts
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
34,517 55,150 68,331 86,511 110,040
2,503 4,336 6,833 8,651 11,004
-7.3% -7.9% 10.0% 10.0% 10.0%

5,973.0 10,115.2 13,697.0

6,833.1 8,651.1 11,004.0
(2,690.9) (5,069.3) (8,088.5)

5,973.0 10,115.2 13,697.0 16,612.5

w are gross amounts

2014 Useful Life Proportion of Assets
5,772.0 4 61.4%
267.0 4 2.8%
2,630.0 20 28.0% Straight Line Method of Depreciation
737.0 7.8% Straight Line Method of Depreciation
Straight Line Method of Depreciation
9,406.0

4,193 5,309 6,753

194 246 312
1,911 2,419 3,077
535 678 862

1,443.0 1,443.0 1,443.0

698.9 1,397.7 1,397.7

884.8 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 64.7

40.9 81.9
52.1

99.1 172.3 265.3

131.5 131.5 131.5

318.4 636.9 636.9

403.2 806.3
512.8

449.9 1,171.5 2,087.5

2,690.9 5,069.3 8,088.5

 Forecasts
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
140,583 177,914 205,303 226,359 238,802
14,058 17,791 20,530 22,636 23,880
10.0% 10.0% 10.0% 10.0% 10.0%

16,612.5 18,732.4 19,693.2 17,506.4 10,794.5

14,058.3 17,791.4 20,530.3 22,635.9 23,880.2
(11,938.3) (16,830.6) (22,717.1) (29,347.8) (36,493.0)

18,732.4 19,693.2 17,506.4 10,794.5 (1,818.3)

Depreciation
Depreciation
Depreciation

8,627 10,918 12,598 13,891 14,654

399 505 583 643 678
3,931 4,975 5,740 6,329 6,677
1,102 1,394 1,609 1,774 1,871

1,443.0 1,443.0 1,443.0 1,443.0 1,443.0

1,397.7 1,397.7 1,397.7 1,397.7 1,397.7

1,769.6 1,769.6 1,769.6 1,769.6 1,769.6
 2,250.9 2,250.9 2,250.9 2,250.9 2,250.9
1,437.8 2,875.6 2,875.6 2,875.6 2,875.6
1,819.6 3,639.2 3,639.2 3,639.2
2,099.7 4,199.5 4,199.5
2,315.1 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 64.7 64.7 64.7 64.7

81.9 81.9 81.9 81.9 81.9
104.1 104.1 104.1 104.1 104.1
66.5 133.0 133.0 133.0 133.0
84.2 168.3 168.3 168.3
97.1 194.3 194.3
107.1 214.2
113.0

383.9 534.6 715.9 920.1 1,140.2

131.5 131.5 131.5 131.5 131.5

636.9 636.9 636.9 636.9 636.9

806.3 806.3 806.3 806.3 806.3
1,025.6 1,025.6 1,025.6 1,025.6 1,025.6
655.1 1,310.3 1,310.3 1,310.3 1,310.3
829.1 1,658.2 1,658.2 1,658.2
956.7 1,913.5 1,913.5
1,054.9 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
Historicals
(RMB in Million Except Per Share Amounts) Mar-10 Mar-11 Mar-12
Net Sales 6,670 11,903 20,025
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
Historicals Forecasts
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
34,517 55,150 68,331 86,511 110,040 140,583
106.0 1469.0 2391.6 3027.9 3851.4 4920.4
0.3% 2.7% 3.5% 3.5% 3.5% 3.5%

1,610.0 3,930.6 6,916.5 10,737.9

2,391.6 3,027.9 3,851.4 4,920.4
(71.0) (42.0) (30.0) (26.0)

1,610.0 3,930.6 6,916.5 10,737.9 15,632.3

Forecasts
Mar-19 Mar-20 Mar-21 Mar-22
177,914 205,303 226,359 238,802
6227.0 7185.6 7922.6 8358.1
3.5% 3.5% 3.5% 3.5%

15,632.3 21,813.2 28,948.8 36,821.4

6,227.0 7,185.6 7,922.6 8,358.1
(46.0) (50.0) (50.0) (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) Mar-10 Mar-11
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
Average Cash Balance

Interest Earned 2%
Historicals
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
26,056.1 34,736.8

48,550.0 64,630.1
(10,000.0) (10,000.0)
38,550.0 54,630.1
- -
(8,776.0) (10,030.0)
29,774.0 44,600.1

1,200.0 -
(1,200.0) -
1,200.0 - -

30,226.0 21,450.0

(8,776.0) (10,030.0)
30,226.0 21,450.0 11,420.0

600 -
6.0% 6.0%
36.0 -

25,838 16,435
6.3% 6.3%
1,628 1,035

1,664 1,035

48,550 64,630 89,337

56,590 76,983

1,132 1,540
 Forecasts
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
46,194.7 60,635.7 76,867.8 86,525.7 95,904.4

89,336.8 131,731.5 191,888.2 268,277.0 354,323.7

(10,000.0) (10,000.0) ### (10,000.0) (10,000.0)
79,336.8 121,731.5 181,888.2 258,277.0 344,323.7
- - ### - -
(3,800.0) (479.0) (479.0) (479.0) (479.0)
75,536.8 121,252.5 181,409.2 257,798.0 343,844.7

- - - - -
- - - - -
- - - - -

11,420.0 7,620.0 7,141.0 6,662.0 6,183.0

(3,800.0) (479.0) ### (479.0) (479.0)

7,620.0 7,141.0 6,662.0 6,183.0 5,704.0

- - - - -
6.0% 6.0% 6.0% 6.0% 6.0%
- - - - -

9,520 7,381 6,902 6,423 5,944

6.3% 6.3% 6.3% 6.3% 6.3%
600 465 435 405 374

600 465 435 405 374

131,732 191,888 268,277 354,324 449,749

110,534 161,810 230,083 311,300 402,036

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) Mar-10 Mar-11
Beginning Equity Balance
Net Income
Issuance/ (Repurchase) of Equity
Ending Equity Balance
Historicals F
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
40,963.0 69,598.2 106,041.2
28,635.2 36,443.0 46,639.9
-
40,963.0 69,598.2 106,041.2 152,681.1
 Forecasts
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22
152,681.1 212,164.2 286,191.3 370,341.8 461,776.6
59,483.1 74,027.2 84,150.5 91,434.8 93,931.4

212,164.2 286,191.3 370,341.8 461,776.6 555,708.0

Alibaba IPO
Valuing Alibaba's Options
Assumptions
InputsforBlackScholesModel
Enterthecurrentstockprice= 70
Enterthestrikepriceontheoption= 12.33
Entertheexpirationoftheoption= 4.1
Enterthestandarddeviationinstockprices= 42.00%
Entertheannualizeddividendyieldonstock= 0.00%
Enterthetreasurybondrate= 2.70%
Enterthenumberofwarrants(options)outstanding= 54.28
Enterthenumberofsharesoutstanding= 2,446,646

CalculationofBoxIncOption

StockPrice= 70
StrikePrice= 12.33
AdjustedS= 70.0
AdjustedK= 12.33
Expiration(inyears)= 4.1

OptionsIssued 54
TotalSharesoutstanding 2,446,646
TBondRate 2.70%
Variance 0.1764
Annualizeddividendyield 0.00%
InterestRate 2.70%

d1= 2.5972
N(d1)= 0.9953

d2= 1.7468
N(d2)= 0.9597

ValueperAlibaba'soption= $59.08

ValueofallAlibaba'soptionsoutstanding= $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
Ordinary Shares 77,861,552
Ordinary Shares Issued through IPO
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 Weighted- Weighted-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 4.1

54,279,500
Aggregate Intrinsic Value (in
thousands)
Alibaba IPO
DCF Valuations

Free Cash Flow Projections Hist

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

EBIT (873)
Free Cash Flow to Firm
EBIT x (1-t) (1,420)
Add: Depreciation & amortization
Less: Capex
Add: Change in working capital
FCFF

Cost of Capital 9.0%

Infinite growth rate 3%

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

Mar-10
Cash Flows
NPV of explicit period 321,953

Terminal value @ perpetual growth (2019) Mar-10

Terminal value as of 2019
NPV of terminal value 812,148

DCF Valuation Summary

DCF calculation as of Valuation (RMB)

NPV of explicit period 321,953
NPV of terminal value 812,148
Enterprise Value 1,134,100
+ Cash $48,550
- Debt ($40,310)
Equity value 1,142,340
+ Short term investments, restricted cash, investment securities 12,587
+Investment in equity investees 13,009
+ Alipay valuation 24,866
Stock Option Value $3,207
Adjusted Equity Value 1,189,595
Share Price 486.21

growth
 Historicals
Mar-11 Mar-12 Mar-13 Mar-14

1,322 5,015 10,751 26,514

1,099 4,252 9,202 24,575

715 805 947
(749) (1,046) (3,010)
4,285 2,260
13,246 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 7% 8% 9%
1%
2%
3%
4%
5%
6.0%
 Forecasts
Mar-15 Mar-16 Mar-17 Mar-18

33,072 41,871 53,260 68,042

29,103 36,009 45,271 57,155

2,691 5,069 8,089 11,938
(9,225) (11,679) (14,855) (18,979)
3,884 4,861 6,292 8,167
26,453 34,261 44,795 58,282

Mar-15 Mar-16 Mar-17 Mar-18

26,453 34,261 44,795 58,282

Mar-15 Mar-16 Mar-17 Mar-18

0 0 - -
WACC
10% 11%

2.4169491525
Mar-19 Mar-20 Mar-21 Mar-22

86,110 99,367 109,558 115,580

70,610 79,493 85,455 86,685

16,831 22,717 29,348 36,493
(24,018) (27,716) (30,558) (32,238)
9,982 7,324 5,630 3,327
73,405 81,819 89,875 94,267

Mar-19 Mar-20 Mar-21 Mar-22

73,405 81,819 89,875 94,267

Mar-19 Mar-20 Mar-21 Mar-22

- - - 1,618,255