Alibaba

[CY09]

I have no answer but truthfully this are my viewpoints

China E-Commerce: Likely a 3-5% profit growth annualized. This year Baba has already guided for no growth as it needs to increase cost to help local businesses on its commerce platform

ANT: Another 5-8% annualized grower. No longer able to grow quickly due to regulators clamping on it

Baba cloud computing: likely the star of the show who will be gaining double digit growths and eventually breaking even due to operating leverage. For me I think by FY 24, it will be profitable and rake in RMB 1 billion.

Digital Media and Entertainment: Likely loss making but a RMB 5 billion blackhole.

Lazada and Rest: Still will be equally poor results due to competition

With my views across these segments, I am trying to figure out how much will baba be worth in 3 years time and invest in it now. Assuming a 20x forward PE of FY24 for holding baba as it executes its business, trying to find out the price to invest in it. Why a 3 year horizon frame because currently China regulatory landscape is too choppy and it will not be forgotten until post 2022 and given how the Western World views the Chinese Govt in a bad light

Why P/E 20 because henceforth Baba's cloud computing and ANT will be the one driving earnings. To me, this is likely to be an 8% annual profit growth which is around what I expect for holding onto Alibaba. I feel P/E 20 is fair because it is 5% earnings on my investment in it, aka the risk free rate for CPF-SA first 40k