Alibaba valuation approaches US$100 billion ahead of possible IPO

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Alibaba's revenue climbed to US$1.84 billion in the last quarter of 2012, from US$1.02 billion one year earlier. Photo: Reuters

Published: 12:00am, 9 May 2013Updated: 4:39am, 9 May 2013

The value of Alibaba Group continues to be an object of speculation after profit at the mainland's biggest e-commerce company more than doubled in the quarter that ended December 31.

Privately held Alibaba posted a net profit of US$642.17 million in the period, up from US$236.91 million a year earlier, according to a United States regulatory filing made by Yahoo. Yahoo owns 24 per cent of Alibaba.

Revenue at Hangzhou-based Alibaba climbed to US$1.84 billion in the quarter to December, up from US$1.02 billion a year ago.

That jump was driven by Alibaba's business-to-consumer online shopping site, Tmall.com, which charges commissions, and its consumer-to-consumer platform, Taobao Marketplace, a source said. The two businesses' combined gross merchandise value exceeded 1 trillion yuan (HK$1.26 trillion) last year.

In a research note on Yahoo, Stifel Nicolaus analyst Jordan Rohan said the results showed "the value of [Yahoo's] Alibaba asset is rapidly increasing towards US$100 billion, far above our prior assumptions".

"We now expect Alibaba to approach US$18 billion in revenues by 2016 at a 50 per cent pro-forma operating margin. Applying a 25x multiple and a 20 per cent discount rate, we get an entity worth US$98 billion today," Rohan said.