Alibaba

[Choon]

I recall somewhere i saw the valuation of China Unlisted Unicorns as of end 2021

Ant was valued at USD $150 billion, Alibaba cloud at US $120 billion, Cainiao is at US $50 billion.

Taking Alibaba's stakes and its cash/equity, it gives a value of 53+77+50+120+30= USD$330 billion.

The above main stakes total value is higher than its current market cap. This excludes its entire commerce division. Again valuation is subjective and should China tighten its rein on its tech companies, ANT and alibaba cloud valuations will head south

Alibaba has other valuable names as well such as Dingtalk which is the China equivalent of Slack (Slack is valued at about US$27 billion). The china commerce arm earns about RMB$180 billion per year (or about USD$28 billion). No doubt profits are falling, so lets keep it at 10x P/E. That's is $280 billion.

Eventual fair value of Alibaba is US$630 billion.

Hi CY09 u are right as published by lilian on substack, basing on lastest round, Ant Group has a 150bil usd valuation, Alicloud has a 124bil usd valuation, Cainao has a 30bil usd valuation. Indeed its core commerce is currently valued at zero by the market.

Generally I find sum-of-the-parts valuation to be easily utilised by sales promoters / sell-side analysts to provide an easy and convenient justification for an exaggerated price. 

The SOTP theory relies heavily on the assumption of efficient markets - being that the constituents/parts are also conservatively/efficiently priced by the market. But often these constituents/parts are overvalued by the market.

For example (in my view),
- Yihai Kerry Arawana (constituent of Wilmar) is surely overpriced. 
- Yonghui (constituent of Dairy Farm) is surely overpriced. 

Borrowing from the Grab Thread - what if other than Taobao/Tmall - all the other businesses of Ali (which are all loss-making) - are just storyline business - i.e. that they may never be viable businesses?

Another way to look at it is - what if all the other businesses of Ali are cost centres (never meant to be profitable) but are required to defend Taobao/Tmall against competition?

I do not believe that all the other businesses of Ali are worth zero. But I think market valuations of these businesses are too easy and loose (e.g. based on Price/sales). Their true valuations probably lies somewhere in the middle (between zero and loose valuations).

Having said the above, I am a fan of Ali and unfortunately vested at significantly higher prices than current.