JP Morgan Delayed Alibaba Group Holding Limited 1

CompletedUNIVERSITY
This document is being provided for the exclusive use of HO SING WONG at CHINESE 15 Sep 2016 12:48
OFPM HKT
HONG KONG, THE Disseminated 15 Sep 2016 01:07 PM HKT
Asia Pacific Equity Research
15 September 2016
Overweight
Alibaba Group Holding Limited BABA, BABA US
Price: $102.40
Alibaba Investor Meetings Key Takeaways
Price Target: $135.00
We recently held investor meetings with Alibaba Executive Vice Chairman Joe China
Tsai in NY. We come away more positive on Alibabas LT growth outlook of Internet
both core commerce and cloud businesses. The tone & content in the meetings Alex Yao
AC
was confident and positive with focus on commercial value of increasing (852) 2800-8535
engagement, core commerce investment priorities, and potential in cloud. alex.yao@jpmorgan.com
Increasing engagement paves the way for LT ads growth. In addition to J.P. Morgan Securities (Asia Pacific) Limited
sharing strong engagement data of Taobao mobile app, (e.g. 7 visits/user/day, Doug Anmuth
AC
28 mins/user/day, 41% DAU/MAU ratio), mgmt. elaborated commercial (1-212) 622-6571

implication of growing engagement from ads supply and demand perspective. douglas.anmuth@jpmorgan.com
On the supply side, growing time spend, visit and pageview have increased Bloomberg JPMA ANMUTH <GO>
J.P. Morgan Securities LLC
commercial ads inventory, of which vast majority is currently not monetized; on
demand side, such trend allows Alibaba to expand its addressable market, Binbin Ding
especially with larger merchants, from pure transaction driven, pay for (852) 2800 8572
binbin.ding@jpmorgan.com
performance ads to brand and campaign ads as Taobao/Tmall expand value
J.P. Morgan Securities (Asia Pacific) Limited
proposition in the marketing funnel from transaction to preference,
consideration, opinion and awareness. Mgmt. described the ads opportunity of Price Performance
the new inventory as billions of dollars in the LT. 110
Core commerce investment focal areas. Mgmt highlighted 3 investment areas 90
for core commerce: 1) Rural areas that host 600m population with low $
70
ecommerce penetration. Mgmt. sees large opportunity here by building out its
distribution capability to more villages, with Chinas rural population spread 50
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
across 600k villages & Alibaba currently having a physical presence in only BABA share price ($)
~20k; 2) category expansion into online supermarket is highly strategic CCMP (rebased)
YTD 1m 3m 12m
given its high frequency nature & ability to build relationships with large brands Abs 33.5% 4.2% 31.7% 63.6%
(& potential advertisers). 3) Southeast Asia. Alibaba will continue to support Rel 28.4% 6.2% 25.4% 56.3%
Lazada after the acquisition of latter in a push to expand presence in SE Asia
while Lazada's 1P logistic model will transit to Cainiao's 4PL model.
Cloud. Mgmt indicated the potential for its cloud business to reach ~20% of
revenue longer-term, up from ~4% in 1QFY17. Mgmt expect Chinas cloud
market size to reach USD30b in 5 years time with AliCloud leading the market
share.
Bloomberg BABA US, Reuters BABA

(Year-end Mar, Rmb mn) FY16 FY17E FY18E FY19E FY16 FY17E FY18E FY19E
Net Sales 101,143 150,829 196,932 247,332 ROE(%) 23.6% 23.5% 25.7% 25.7% 52-Week range 104.30-57.20
Operating Profit (EBIT) 29,102 47,703 67,796 90,164 ROIC(%) - - - - Shares Outstg 2,580MN
EBITDA 52,340 71,890 94,125 118,429 Cash 106,818.0 157,924.1 233,060.8 333,357.8 Market Cap(US) US$264,154MN
Pre Tax Profit 80,600 51,890 76,448 101,576 Equity 249,889.0 303,343.4 376,644.2 471,303.1 Free float -
Reported Net profit 71,460 37,508 58,525 79,883 Qtr GAAP EPS (Rmb) 1Q 2Q 3Q 4Q Avg daily vol. 15.2MM shares
Reported EPS (Rmb) 27.70 14.50 22.17 29.67 EPS (16) 11.92 8.87 4.85 2.07 Avg daily val ($) 1,357.96MN
P/E (x) 24.7 47.2 30.8 23.1 EPS (17) E 2.94 2.80 6.10 2.65 Dividend Yield -
Adj. EPS * 16.63 22.13 29.91 37.41 EPS (18) E 4.32 4.66 8.80 4.39 Index (NASD) 5155.26
Adj. P/E (X) 41.1 30.9 22.9 18.3 1M 3M 12M Price Target 135.00
EV/EBITDA (x) 26.6 18.3 13.1 9.6 Abs. Perf.(%) 4.2% 31.7% 63.6% Price Target End Date 30-Jun-17
P/B (x) 8.1 6.5 5.2 4.2 Rel. Perf.(%) 5.7% 25.2% 56.3% Price Date 14 Sep 16
Y/E BPS (Rmb) 84.25 104.66 130.36 162.94
Source: Company, J. P. Morgan estimates, Bloomberg. * Note: Excluding share-based compensation expense.
See page 9 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision.
www.jpmorganmarkets.com
This document is being provided for the exclusive use of HO SING WONG at CHINESE UNIVERSITY OF
HONG KONG, THE
Alex Yao Asia Pacific Equity Research

(852) 2800-8535 15 September 2016
alex.yao@jpmorgan.com
More notes from the meetings

Key difference between online shopping in China and US
Mgmt believe ecommerce environment in China is different to US in:
more younger customers ( 75% of Mobile Taobao users are below 35 years old),
more mobile adoption (~75% of Alibaba GMV from mobile last quarter), and
much larger market size ( Ecommerce market in China was nearly RMB3.8
trillion or US$600bn in 2015).
Key social and content features that drive engagement growth
Mgmt think Mobile Taobao is not a shopping app but also a place to browse, to find
latest information, and to see live streaming that is similar to QVC. They have also
launched social features allowing users to form communities around interest (i.e.
camping equipment), Q&A features that can get answers typically in 5-10 minutes,
which help users engage with each other and merchants engage with users. Mobile
Taobao now has ~150m DAU, 41% DAU/MAU ratio, with daily time spend of 28
minutes per user. These metrics are higher than that of social platforms such as
Snapchat, Instagram and only behind Facebook in US.
Expanding value proposition to merchant; GMV no longer a key metric to

gauge platform value proposition
Alibabas revenue outgrew GMV in last few quarters and mgmt believe
GMV/transaction is no longer the only value Alibaba delivers to the merchants.
Merchants & brands now not only focus on direct sales conversion but also look to
build a brand, maintain customer relationship and engage consumers with their
offline business. Alibaba is able to help merchants achieve these because of the
platform engagement. Therefore, in calculating the take rate, the denominator is
under-estimated for the value Alibaba delivers to the merchants.
Top 3 investment focal areas

Mgmt highlighted 3 investment areas for core commerce which include:
Rural areas. Rural areas host 600m population with low ecommerce penetration.
Mgmt see large opportunity in this market by building out the companys
distribution capability to more villages, with Chinas rural population spread
across 600k villages & Alibaba currently having a physical presence in only
~20k.
Tmall Supermarket. Mgmt believe online supermarket business is highly
strategic given its high frequency nature & ability to build relationships with
large brands (& potential advertisers). BABAs supermarket business is not
profitable now, but Alibaba plans to continue investing here as scale is the key
for it to achieve profitability. Logistics costs currently average ~20% of basket
size today, with Alibaba noting this likely needs to be closer to ~10% to reach
profitability. The company will stick to Cainiao's 4PL model and has no plan to
touch last mile delivery.
Investment in Southeast Asia. Alibaba wants to invest aggressively in Lazada.
Lazada today has its in-house logistic units but will transit to Cainiaos 4PL
model.
2
HONG KONG, THE

(852) 2800-8535 15 September 2016
Opportunity in cross-broader ecommerce

From a population standpoint, the company believes areas like India, Southeast Asia
and certain parts of Europe (e.g. Russia, Spain) offer more opportunity. The
immediate priority is to bring imports to China because Alibaba is strong in China
and customers have strong demand for high-quality foreign products. The company
has made a lot of effort to bring products from overseas and sell them on Tmall
International. Following that, BABA will seek opportunities in SE Asia (by
leveraging Lazada) and India in the next step. Lastly, Alibaba will try to help more
Chinese merchants sell overseas through AliExpress.
For the role that M&A plays in its cross-border expansion, mgmt believe M&A is a
way for them to acquire talent and Chinese mgmt typically doesn't translate well into
other cultures. Also, M&A should help Alibaba with user growth overseas.
Cloud
Mgmt believes enterprise adoption of the cloud in China is ~3 years behind the US,
where ~10% of enterprise workloads are in the cloud today. Assuming ~20% of
Chinas estimated ~$200B IT spend moves to the cloud over the next ~3-5 years, the
cloud market in China could be ~$30-$40B with Alibaba well positioned as the clear
leader. Mgmt noted its cloud opportunity outside of China will be uneven, with more
opportunity in Southeast Asia, Japan, & parts of the EU while less so in the US.
Stock-based compensation
For SBC, Mgmt pay more attention to how dilutive the SBC is rather than its cost on
P&L, because the P&L impact is arbitrary and it fluctuates with stock price. In
addition, a key component of the SBC is related to mark to market accounting, which
includes 1) Alibaba grants SBC to some employees of ANT Financial to align their
interests; 2) the company grants ANT Financial equity to Alibaba employees at no
cost to BABA Group.
As ANT Financial's value went up, the company booked the mark to market costs.
Going forward Alibabas own SBC (i.e. Alibaba granting share/option to its own
employee) will be normalized while the abnormal movements from Ant Financial
related SBC market to market accounting goes away. Excluding ANT Financial
related SBC, Alibaba SBC is 10% of revs in calendar year 2015 and 12% in 2014.
For reference, Google is at 8.6%, FB at 16.6%, LNKD at 17%.
3
HONG KONG, THE

(852) 2800-8535 15 September 2016
Investment Thesis, Valuation and Risks

Alibaba Group Holding Limited (Overweight; Price Target: $135.00)
Investment Thesis
We expect Alibabas core commerce to continue to deliver steady GMV growth (15%
CAGR from CY17-19) with improving monetization (JPMe take rate to grow from
3.35% in CY17 to 3.60% in CY19) driven by 1) increasing user engagement and 2)
increasing value proposition to merchants. We believe core commerces growth
outlook (net profit CAGR 21% from CY17-19) at its scale and profitability (JPMe 56%
NM in CY17) not only makes Alibaba attractive for LT investors but provides free
cash flow for investment in Alibabas non-commerce initiatives, many of which are
best in class in the China Internet space. We expect Cloud and UCWeb, among
others, to become meaningful earnings contributors over the medium to long term.
Maintain OW.
Valuation
We adopt a SoTP approach to value Alibaba, which yields a total valuation of
US$350bn and a Jun-17 PT of US$135. Key assumptions include:
US$305.2bn for core commerce business, based on CY2017 net profit of

US$13.3bn and a P/E of 23x
US$10.3bn for cloud computing services, based on CY2017 revenue of
US$1.5bn and a P/S of 7x
US$8.1bn for media and entertainment business, based on CY2017 revenue of
US$2.7bn and a P/S of 3x
US$17bn for equity investment and US$9.6bn for net cash
Risks to Rating and Price Target
Key risks include: (1) large Chinese Internet companies such as Tencent and Baidu
could pose a threat to Alibabas Local Services business; (2) investments in digital
content could be a long-lasting effort and bring margin pressure in the long-term; (3)
progress of mobile monetization improvement might be slower than expected, along
with sustainability of Chinas retail marketplace GMV and revenue growth in the
longer run; (4) potential government scrutiny of Internet content and activities in
China; and (5) potential investor concerns around corporate structure.
4
HONG KONG, THE

(852) 2800-8535 15 September 2016
Figure 1: Alibaba Income Statement

RMBm FY2013 FY2014E FY2015E FY2016E 1Q17 2Q17E 3Q17E 4Q17E FY2017E FY2018E FY2019E
Income statement Jun-16 Sep-16 Dec-16 Mar-17
Net revenue 34,517 52,504 76,204 101,143 32,154 34,397 49,051 35,227 150,829 196,932 247,332
Cost of services 9,719 13,369 23,834 34,355 11,744 12,555 16,677 14,091 55,067 71,904 90,068
Gross Profit 24,798 39,135 52,370 66,788 20,410 21,842 32,374 21,136 95,762 125,029 157,264
Product development expenses 3,753 5,093 10,658 13,788 3,988 4,304 4,383 4,172 16,847 19,859 23,662
Sales and marketing expenses 3,613 4,545 8,513 11,307 3,614 3,818 3,881 3,607 14,919 18,359 21,920
General and admin expenses 2,889 4,218 7,800 9,205 2,743 2,786 3,039 2,838 11,407 13,370 15,450
Amortization of intangible assets 130 315 2,089 2,931 1,251 1,179 1,204 1,132 4,767 5,448 5,821
Impairment of goodwill and intangible assets 175 44 175 455 - 34 49 35 119 197 247
Yahoo TIPLA amendment payment 3,487 - - - - - - - - - -
SBC 1,259 2,844 13,028 16,082 3,694 3,694 3,694 3,694 14,776 14,776 14,776
Operating Expense, Non-GAAP 8,996 11,012 13,943 18,218 6,651 7,214 7,609 6,923 28,397 36,812 46,255
Operating Expense 14,047 14,215 29,235 37,686 11,596 12,122 12,556 11,784 48,059 57,233 67,100
Operating Income 10,751 24,920 23,135 29,102 8,814 9,720 19,818 9,352 47,703 67,796 90,164
EBITA, Non-GAAP 15,802 28,123 38,427 48,570 13,759 14,627 24,765 14,214 67,365 88,217 111,009
Non-Operating Revenue
Interest Income 39 1,648 2,899 2,648 750 750 750 750 3,248 4,887 7,080
Investment Income - - 6,251 49,606 - - - - - - -
Govt grant - - - - - - - - - - -
Gain on disposal of assets - - 305 - - - - - - - -
FX gain - - - - - - - - - - -
Other income 894 983 1,082 1,190 1,763 560 560 560 3,443 4,820 5,302
Total Non-Operating Revenue 933 2,631 10,537 53,444 2,513 1,310 1,310 1,310 6,691 9,708 12,382
Non-Operating Expenses
Interest expense (1,572) (2,195) (2,750) (1,946) (626) (626) (626) (626) (1,581) (1,055) (971)
Investment expense - - - - - - - - - - -
Inventory loss - - - - - - - - - - -
Loss of disposal of assets - - - - - - - - - - -
FX loss - - - - - - - - - - -
Other expense - - - - - - - - - - -
Total Non-operating expenses (1,572) (2,195) (2,750) (1,946) (626) (626) (626) (626) (2,504) (1,055) (971)
2,347
Non Operating Income (net) (639) 436 7,787 51,498 1,887 684 684 684 4,187 8,653 11,411
Pre-Tax Profit 10,112 25,356 30,922 80,600 10,701 10,404 20,502 10,036 51,890 76,448 101,576
Income Tax 1,457 3,196 6,416 8,449 2,091 2,115 3,629 2,060 9,895 13,684 17,453
Share of results of equity investees (6) (203) (1,590) (1,730) (1,468) (1,468) (1,468) (1,468) (5,872) (5,872) (5,872)
Net income (loss) 8,649 23,403 24,320 71,289 7,142 6,821 15,404 6,509 35,876 56,893 78,251
Non-controlling interests (117) (88) (59) 171 408 408 408 408 1,632 1,632 1,632
Net income attributable to Alibaba Group 8,532 23,315 24,261 71,460 7,550 7,229 15,812 6,917 37,508 58,525 79,883
Accretion of convertible preference shares (17.000) (31.000) (15.000) - - - -
Dividends accrued on convertible preference shares (111.000) (208.000) (97.000) - - - - - - - -
Net Profit attributable to ordinary shareholders 8,404 23,076 24,149 71,460 7,550 7,229 15,812 6,917 37,508 58,525 79,883
Non-GAAP Net Profit 18,675 27,610 34,981 42,741 12,187 11,729 20,352 11,370 55,638 77,314 99,095
Non-GAAP Net Profit attributable to ordinary shareholders 18,558 27,522 34,922 42,912 12,595 12,137 20,760 11,778 57,270 78,946 100,727
FD EPADS (RMB) 3.57 9.86 9.67 27.70 2.94 2.80 6.10 2.65 14.50 22.17 29.67
Basic EPADS (RMB) 3.66 10.60 10.33 28.88 3.05 2.91 6.33 2.76 15.05 23.02 30.81
Non-GAAP FD EPADS (RMB) 7.77 11.76 13.98 16.63 4.90 4.70 8.00 4.52 22.13 29.91 37.41
Reported non GAAP 13,869.00 12,187
D&A of PPE and land use rights 805 1,339 2,326 3,770 1,204 1,131 1,131 1,131 4,525 5,908 7,420
Equity-settled donation expense
EBITDA 11,556 26,259 25,461 32,872 10,018 10,851 20,949 10,483 52,228 73,704 97,584
Adjusted EBITDA 16,607 29,462 40,753 52,340 14,963 15,759 25,896 15,345 71,890 94,125 118,429
Reported non-GAAP EBITDA 16607 14,963
Margin Analysis (%):

Cost of services 28.2 25.5 31.3 34.0 36.5 36.5 34.0 40.0 36.5 36.5 36.4
Gross Margin 71.8 74.5 68.7 66.0 63.5 63.5 66.0 60.0 63.5 63.5 63.6
Product development 10.9 9.7 14.0 13.6 12.4 12.5 8.9 11.8 11.2 10.1 9.6
Sales and marketing 10.5 8.7 11.2 11.2 11.2 11.1 7.9 10.2 9.9 9.3 8.9
General and admin 8.4 8.0 10.2 9.1 8.5 8.1 6.2 8.1 7.6 6.8 6.2
Product development, Non-GAAP 6.5 6.7 8.0 8.4 8.8 6.3 8.2 7.8 7.5 7.5
Sales and marketing, Non-GAAP 7.0 8.0 9.2 9.8 9.8 7.0 9.0 8.7 8.4 8.1
General and admin, Non-GAAP 5.2 4.3 4.7 5.2 5.0 4.0 5.0 4.7 4.6 4.5
Amortization of intangible assets 0.4 0.6 2.7 2.9 3.9 3.3 2.4 3.1 3.2 2.8 2.4
Impairment of goodwill and intangible assets 0.5 0.1 0.2 0.4 0.0 0.1 0.1 0.1 0.1 0.1 0.1
Yahoo TIPLA amendment payment 10.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
SBC 3.6 5.4 17.1 15.9 11.5 10.7 7.5 10.5 9.8 7.5 6.0
Operating Margin 31.1 47.5 30.4 28.8 27.4 28.3 40.4 26.5 31.6 34.4 36.5
EBITA , Non-GAAP 45.8 53.6 50.4 48.0 42.8 42.5 50.5 40.3 44.7 44.8 44.9
EBITDA 33.5 50.0 33.4 32.5 31.2 31.5 42.7 29.8 34.6 37.4 39.5
EBITDA, Non-GAAP 48.1 56.1 53.5 51.7 46.5 45.8 52.8 43.6 47.7 47.8 47.9
Interest income 0.1 3.1 3.8 2.6 2.3 2.2 1.5 2.1 2.2 2.5 2.9
Investment Income 0.0 0.0 8.2 49.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Investment Expense 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Exchange Gain 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Pre Tax Income 29.3 48.3 40.6 79.7 33.3 30.2 41.8 28.5 34.4 38.8 41.1
Income Tax 14.4 12.6 20.7 10.5 19.5 20.3 17.7 20.5 19.1 17.9 17.2
Effective tax rate Non-GAAP 7.1 9.8 11.3 11.8 13.3 15.0 15.0 15.0 13.8 14.1 14.3
Minority Interest -0.3 -0.4 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net Income 24.3 44.0 31.7 70.7 23.5 21.0 32.2 19.6 24.9 29.7 32.3
Net Income (Non-GAAP) 54.1 52.6 45.9 42.3 37.9 34.1 41.5 32.3 36.9 39.3 40.1
YoY Change (%):

Sales 72.4 52.1 45.1 32.7 58.8 55.1 42.0 45.7 49.1 30.6 25.6
Gross Profit 84.1 57.8 33.8 27.5 50.8 45.2 37.2 44.6 43.4 30.6 25.8
Operating Profit 114.4 131.8 -7.2 25.8 70.8 52.0 59.4 82.9 63.9 42.1 33.0
Pretax Income 82.8 150.8 21.9 160.7 -67.2 -57.5 24.2 27.8 -35.6 47.3 32.9
Net Income 98.8 174.6 4.6 195.9 -75.5 -68.2 26.5 28.9 -47.5 56.0 36.5
EPS, Non-GAAP 176.1 51.3 18.9 19.0 33.3 29.6 25.8 52.2 33.1 35.1 25.1
FD ADS O/S (MM) 2,389 2,341 2,499 2,580 2,568 2,581 2,594 2,607 2,587 2,639 2,693
Weighted basic ADS O/S (MM) 2,294 2,178 2,337 2,474 2,473 2,485 2,498 2,510 2,492 2,542 2,593
FD Shares O/S (MM) 2,389 2,341 2,499 2,580 2,568 2,581 2,594 2,607 2,587 2,639 2,693
Weighted Basic O/S (MM) 2,294 2,178 2,337 2,474 2,473 2,485 2,498 2,510 2,492 2,542 2,593
Source: J.P. Morgan estimates, Company data.
5
HONG KONG, THE

(852) 2800-8535 15 September 2016
Figure 2: Alibaba Revenue Drivers

FY FY FY FY Q1 Q2E Q3E Q4E FY FY FY
(RMB m) FY2013 FY2014 FY2015 FY2016E Jun-16 Sep-16 Dec-16 Mar-17 FY2017E FY2018E FY2019E
Total revenue 34,517 52,504 76,204 101,143 32,154 34,397 49,051 35,227 150,829 196,932 247,332
Sequential Growth 33.0% 7.0% 42.6% -28.2%
Year-over-year Growth 72.4% 52.1% 45.1% 32.7% 58.8% 55.1% 42.0% 45.7% 49.1% 30.6% 25.6%
Cost of revenue 9,719 13,369 23,834 34,355 11,744 12,555 16,677 14,091 55,067 71,904 90,068
Gross profit 24,798 39,135 52,370 66,788 20,410 21,842 32,374 21,136 95,762 125,029 157,264
Gross Margin 71.8% 74.5% 68.7% 66.0% 63.5% 63.5% 66.0% 60.0% 63.5% 63.5% 63.6%
Revenue breakdown #REF! #REF! #REF! #REF!

Revenue
Total Revenue 34,517 52,504 76,204 101,143 32,154 34,397 49,051 35,227 150,829 196,932 247,332
Core e-commerce 33,327 49,983 69,498 92,317 27,241 28,986 43,098 28,886 128,211 163,134 197,847
As % of total revenue 96.6% 95.2% 91.2% 91.3% 84.7% 84.3% 87.9% 82.0% 85.0% 82.8% 80.0%
China commerce revenue 29,167 45,132 62,937 84,321 24,644 26,115 39,887 25,876 116,522 148,985 181,196
China retail revenue 26,970 42,832 59,732 80,033 23,383 24,816 38,456 24,574 111,230 142,625 173,827
As % of China commerce revenue 92.5% 94.9% 94.9% 94.9% 94.9% 95.0% 96.4% 95.0% 95.5% 95.7% 95.9%
Online marketing services 19,697 29,729 37,453 52,893 15,901 16,854 25,147 15,341 73,244 89,239 104,814
As % of China retail revenue 73.0% 69.4% 62.7% 66.1% 68.0% 67.9% 65.4% 62.4% 65.8% 62.6% 60.3%
Commission 6,161 12,023 21,264 25,611 7,015 7,453 12,759 8,639 35,866 50,560 65,517
Others 1,112 1,080 1,014 1,529 467 509 550 594 2,120 2,826 3,496
Sequential Growth 10.0% 9.0% 8.0% 8.0%
Year-over-year Growth 58.2% -2.9% -6.1% 50.7% 37.3% 38.6% 38.6% 39.9% 38.6% 33.3% 23.7%
China retail GMV 1,077,169 1,677,587 2,443,674 3,092,385 837,000 887,057 1,216,526 962,393 3,902,976 4,856,076 5,655,017
Taobao Marketplace GMV 824,000 1,173,000 1,597,000 1,877,000 508,000 516,205 659,271 531,173 2,214,649 2,498,466 2,628,426
Year-over-year Growth 42.4% 36.1% 17.5% 19.0% 17.9% 17.1% 18.3% 18.0% 12.8% 5.2%
As % of China retail GMV 76.5% 69.9% 65.4% 60.7% 60.7% 58.2% 54.2% 55.2% 56.7% 51.5% 46.5%
TMall GMV 253,000 505,000 847,092 1,215,385 329,000 370,852 557,255 431,220 1,688,327 2,357,610 3,026,592
As % of China retail GMV 23.5% 30.1% 34.7% 39.3% 39.3% 41.8% 45.8% 44.8% 43.3% 48.5% 53.5%
Tmall commission revenue take rate 2.4% 2.38% 2.51% 2.11% 2.13% 2.01% 2.29% 2.00% 2.12% 2.1% 2.2%
Ads monetization rate 1.83% 1.77%
Blended take rate 2.50% 2.6% 2.44% 2.59% 2.79% 2.80% 3.16% 2.55% 2.85% 2.94% 3.07%
Active buyers 172 255 350 423 434 452 472 486 486 544 585
GMV per active buyer (RMB) 6,263 6,579 6,982 7,311 7,503 7,587 7,799 8,030 8,030 8,929 9,663
Mobile GMV 79,454 318,514 994,254 2,002,854 625,715 675,772 946,081 775,786 3,023,355 4,054,380 4,931,171
As % of total China retail GMV 7.4% 19.0% 40.7% 64.8% 74.8% 76.2% 77.8% 80.6% 77.5% 83.5% 87.2%
Mobile revenue 389 2,905 17,840 50,337 17,514 18,922 29,802 20,170 86,408 119,990 153,389
Year-over-year Growth #DIV/0! 646.8% 514.1% 182.2% 119.3% 79.9% 59.0% 54.2% 71.7% 38.9% 27.8%
As % of total China retail revenue 1.4% 6.8% 29.9% 62.9% 74.9% 76.2% 77.5% 82.1% 77.7% 84.1% 88.2%
Mobile take rate 0.49% 0.9% 1.79% 2.51% 2.80% 2.80% 3.15% 2.60% 2.86% 2.96% 3.11%
PC GMV 997,715 1,359,073 1,449,420 1,089,531 211,285 211,285 270,445 186,607 879,622 801,697 723,847
Year-over-year Growth 54.3% 36.2% 6.6% -24.8% -30.2% -22.6% -13.6% -7.1% -19.3% -8.9% -9.7%
As % of total China retail GMV 92.6% 81.0% 59.3% 35.2% 25.2% 23.8% 22.2% 19.4% 22.5% 16.5% 12.8%
PC revenue 26,581 39,927 41,892 29,696 5,869 5,895 8,654 4,404 24,822 22,635 20,437
Year-over-year Growth #DIV/0! 50.2% 4.9% -29.1% -24.0% -12.6% -13.2% -16.2% -16.4% -8.8% -9.7%
As % of total China retail revenue 98.6% 93.2% 70.1% 37.1% 25.1% 23.8% 22.5% 17.9% 22.3% 15.9% 11.8%
PC take rate 2.66% 2.94% 2.89% 2.73% 2.78% 2.79% 3.20% 2.36% 2.82% 2.82% 2.82%
6
HONG KONG, THE

(852) 2800-8535 15 September 2016
Figure 3: Alibaba Revenue Drivers (Contd)

FY FY FY FY Q1 Q2E Q3E Q4E FY FY FY
(RMB m) FY2013 FY2014 FY2015 FY2016E Jun-16 Sep-16 Dec-16 Mar-17 FY2017E FY2018E FY2019E
China Wholesale 2,197 2,300 3,205 4,288 1,261 1,299 1,431 1,301 5,292 6,360 7,369
Year-over-year Growth -0.8% 4.7% 39.3% 33.8% 26.5% 24.2% 23.2% 20.1% 23.4% 20.2% 15.9%
As % of China commerce revenue 7.5% 5.1% 5.1% 5.1% 5.1% 5.0% 3.6% 5.0% 4.5% 4.3% 4.1%
Paying members (mn) 0.681 0.690 0.715 0.753 0.753 0.776 0.799 0.807 0.784 0.863 0.948
ARPU (RMB) 3,225 3,331 4,484 5,696 1,674 1,674 1,791 1,612 6,751 7,368 7,777
International commerce revenue 4,160 4,851 6,486 7,629 2,549 2,821 3,155 2,952 11,477 13,897 16,360
Intl Retail 392 938 1,768 2,204 1,117 1,262 1,565 1,330 5,275 6,714 8,108
As % of Intl commerce revenue 9.4% 19.3% 27.3% 28.9% 43.8% 44.7% 49.6% 45.1% 46.0% 48.3% 49.6%
Intl retail GMV

Sequential Growth
Year-over-year Growth
Implied take rate
Intl Wholesale 3,768 3,913 4,718 5,425 1,432 1,559 1,590 1,622 6,202 7,182 8,252
As % of Intl commerce revenue 90.6% 80.7% 72.7% 71.1% 56.2% 55.3% 50.4% 54.9% 54.0% 51.7% 50.4%
Paying members 0.094 0.117 0.129 0.139 0.147 0.148 0.150 0.151 0.149 0.159 0.169
ARPU 40,000 33,330 36,462 39,030 9,760 10,517 10,622 10,729 41,643 45,116 48,688
Sequential Growth -1.2% 7.8% 1.0% 1.0%
Year-over-year Growth -16.7% 9.4% 7.0% 7.3% 7.3% 3.8% 8.5% 6.7% 8.3% 7.9%
Other e-commerce 367 48 50 55 58 212 252 291
Sequential Growth 5.0% 10.0% 5.0%
Year-over-year Growth #DIV/0! -42.2% 18.9% 15.4%
Cloud computing and Internet infrastructure 650 773 1,271 3,019 1,243 1,557 1,715 1,890 6,405 11,031 18,267
Paying members 577,000 646,240 697,939 739,816 2,660,995 3,748,148 5,088,762

Year-over-year Growth 119.4% 44.2% #DIV/0! 40.9% 35.8%
ARPU 2,154 2,409 2,457 2,555 9,575 11,717 14,299

3.7% 11.8% 2.0% 4.0%
16.8% 23.0% #DIV/0! 22.4% 22.0%
Digital media & entertainment 4,447 3,135 3,292 3,621 3,802 13,850 19,731 27,430
Year-over-year Growth 286.1% 42.5% 39.0%
Other revenue 540 1,748 5,510 6,174 535 562 618 649 2,363 3,036 3,788
Year-over-year Growth 400.0% 223.7% 215.2% 12.1% -59.0% -59.1% -65.4% -62.1% -61.7% 28.5% 24.8%
7
HONG KONG, THE

(852) 2800-8535 15 September 2016
Alibaba Group Holding Limited: Summary of Financials

Income Statement - Annual FY16A FY17E FY18E FY19E Income Statement - Quarterly 1Q17A 2Q17E 3Q17E 4Q17E
Revenues 101,143 150,829 196,932 247,332 Revenues 32,154 34,397 49,051 35,227
Operating income 29,102 47,703 67,796 90,164 Operating income 8,814 9,720 19,818 9,352
D&A 6,701 4,525 5,908 7,420 D&A - - - -
EBITDA 35,803 52,228 79,152 103,405 EBITDA 11,269 12,030 22,153 11,616
Net interest income / (expense) 702 1,666 3,832 6,109 Net interest income / (expense) 124 124 124 124
Other income / (expense) 51,498 4,187 8,653 11,411 Other income / (expense) 1,887 684 684 684
Pretax income 80,600 51,890 76,448 101,576 Pretax income 10,701 10,404 20,502 10,036
Income taxes (8,449) (9,895) (13,684) (17,453) Income taxes (2,091) (2,115) (3,629) (2,060)
Net Income 71,460 37,508 58,525 79,883 Net Income 7,550 7,229 15,812 6,917
Weighted average diluted shares 2,580 2,587 2,639 2,693 Weighted average diluted shares 2,568 2,581 2,594 2,607
Diluted EPS 16.63 22.13 29.91 37.41 Diluted EPS 4.90 4.70 8.00 4.52
Balance Sheet and Cash Flow Data FY16A FY17E FY18E FY19E Ratio Analysis FY16A FY17E FY18E FY19E
Cash and cash equivalents 106,818 157,924 233,061 333,358 Sales growth 32.7% 49.1% 30.6% 25.6%
Accounts receivable 17,028 9,211 12,027 15,105 EBITDA growth 28.4% 37.4% 30.9% 25.8%
Other current assets 5,524 5,524 5,524 5,524 EPS growth 19.0% 33.1% 35.1% 25.1%
Current assets 134,070 177,359 255,312 358,687
PP&E 13,629 20,416 28,294 35,714 EBITDA margin 51.7% 47.7% 47.8% 47.9%
Total assets 364,450 414,527 500,356 611,151 Net margin 42.4% 38.0% 40.1% 40.7%
Total debt 57,771 31,915 28,361 27,130 Debt / EBITDA 1.1 0.4 0.3 0.2
Total liabilities 114,561 111,183 123,712 139,848
Shareholders' equity 217,337 270,791 344,092 438,751 Return on assets (ROA) 13.8% 14.7% 17.3% 18.1%
Return on equity (ROE) 23.6% 23.5% 25.7% 25.7%
Net Income (including charges) 71,460 37,508 58,525 79,883
D&A 6,701 4,525 5,908 7,420 Enterprise value / EBITDA 26.6 18.3 13.1 9.6
Change in working capital 7,792 30,295 13,267 14,289 Enterprise value / Free cash flow 30.7 17.4 16.4 11.8
Other P/E 24.7 47.2 30.8 23.1
Cash flow from operations 56,836 88,274 92,476 116,368
Capex (10,845) (11,312) (13,785) (14,840)
Free cash flow 45,348 75,526 75,400 96,290
Cash flow from investing activities (42,831) (11,312) (13,785) (14,840)
Cash flow from financing activities (15,846) (25,856) (3,554) (1,231)
Dividends - - - -
Dividend yield - - - -
Source: Company reports and J.P. Morgan estimates.

Note: Rmb in millions (except per-share data).Fiscal year ends Mar
8
HONG KONG, THE

(852) 2800-8535 15 September 2016
Analyst Certification: The research analyst(s) denoted by an AC on the cover of this report certifies (or, where multiple research
analysts are primarily responsible for this report, the research analyst denoted by an AC on the cover or within the document
individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views
expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of
any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views
expressed by the research analyst(s) in this report. For all Korea-based research analysts listed on the front cover, they also certify, as per
KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion, without undue influence or
intervention.
Important Disclosures
Market Maker/ Liquidity Provider: J.P. Morgan Securities plc and/or an affiliate is a market maker and/or liquidity provider in
securities issued by Alibaba Group Holding Limited.
Lead or Co-manager: J.P. Morgan acted as lead or co-manager in a public offering of equity and/or debt securities for Alibaba Group
Holding Limited within the past 12 months.
Client: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients: Alibaba Group Holding
Limited.
Client/Investment Banking: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as investment
banking clients: Alibaba Group Holding Limited.
Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following
entity(ies) as clients, and the services provided were non-investment-banking, securities-related: Alibaba Group Holding Limited.
Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients, and
the services provided were non-securities-related: Alibaba Group Holding Limited.
Investment Banking (past 12 months): J.P. Morgan received in the past 12 months compensation for investment banking services
from Alibaba Group Holding Limited.
Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking
services in the next three months from Alibaba Group Holding Limited.
Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services
other than investment banking from Alibaba Group Holding Limited.
Other Significant Financial Interests: J.P. Morgan owns a position of 1 million USD or more in the debt securities of Alibaba Group
Holding Limited.
J.P. Morgan Securities (Asia Pacific) Limited (J.P. Morgan) is acting as Financial Advisor to Alibaba Group Holding Limited
(Alibaba Group) on the sale of 100% stake in Beijing Chuanyun Logistics Investment Limited (Target Company) as announced by
Alibaba Health Information Technology Limited (Alibaba Health) on 15 April 2015. J.P. Morgan will be receiving fees for so acting.
J.P. Morgan and/or its affiliates may perform, or may seek to perform, other financial or advisory services for Alibaba Group and/or its
affiliates and may have other interests in or relationships with Alibaba Group and/or its affiliates, and receive fees, commissions or other
compensation in such capacities. This research report and the information herein is not intended to serve as an endorsement of the
proposed transaction or result in procurement, withholding or revocation of a proxy or any other action by a security holder. This report is
based solely on publicly available information. No representation is made that it is accurate or complete.
Company-Specific Disclosures: Important disclosures, including price charts and credit opinion history tables, are available for
compendium reports and all J.P. Morgancovered companies by visiting https://jpmm.com/research/disclosures, calling 1-800-477-0406,
or e-mailing research.disclosure.inquiries@jpmorgan.com with your request. J.P. Morgans Strategy, Technical, and Quantitative
Research teams may screen companies not covered by J.P. Morgan. For important disclosures for these companies, please call 1-800-477-
0406 or e-mail research.disclosure.inquiries@jpmorgan.com.
9
HONG KONG, THE

(852) 2800-8535 15 September 2016
Alibaba Group Holding Limited (BABA, BABA US) Price Chart
Date Rating Share Price Price Target

196 ($) ($)
OW $117 OW $104 OW $97 OW $88 OW $135
29-Oct-14 OW 98.31 112.00
168
OW $122 OW $110 OW $93 OW $90 OW $129 05-Nov-14 OW 101.80 122.00
30-Jan-15 OW 89.81 117.00
140
OW $112 OW $109 OW $96 OW $93 OW $96 20-Mar-15 OW 85.20 109.00
112 08-May-15 OW 80.00 110.00
Price($) 16-Jun-15 OW 86.09 104.00
84 13-Aug-15 OW 75.11 96.00
11-Sep-15 OW 64.63 93.00
56 28-Oct-15 OW 76.35 97.00
29-Jan-16 OW 69.54 93.00
28
24-Feb-16 OW 66.97 90.00
28-Mar-16 OW 76.48 88.00
0
06-May-16 OW 78.83 96.00
Sep Dec Mar Jun Sep Dec Mar Jun Sep
14 14 15 15 15 15 16 16 16 12-Aug-16 OW 98.25 129.00
31-Aug-16 OW 96.00 135.00
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage Oct 29, 2014.
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire
period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated
Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe:
J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analysts (or the analysts teams) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analysts (or the analysts teams)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analysts (or the analysts teams) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if
applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy
reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a
recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stocks expected total return is
compared to the expected total return of a benchmark country market index, not to those analysts coverage universe. If it does not appear
in the Important Disclosures section of this report, the certifying analysts coverage universe can be found on J.P. Morgans research
website, www.jpmorganmarkets.com.
Coverage Universe: Yao, Alex: Alibaba Group Holding Limited (BABA), Autohome Inc (ATHM), Baidu.com (BIDU), BitAuto
Holdings Limited (BITA), Ctrip.com International, Ltd (CTRP), JD.com, Inc. (JD.OQ), Leju Holdings Limited (LEJU), Momo Inc
(MOMO), Phoenix New Media Ltd (FENG), Sina Corp (SINA), Sohu.Com (SOHU), SouFun Holdings Ltd (SFUN), Tencent (0700.HK),
Vipshop (VIPS), Weibo Corporation (WB), YY Inc (YY)
Anmuth, Doug: Alphabet (GOOG), Alphabet Inc. (GOOGL), Amazon.com (AMZN), Bankrate Inc (RATE), Care.com (CRCM), Chegg,
Inc. (CHGG), Criteo (CRTO), Expedia, Inc. (EXPE), Facebook (FB), Groupon (GRPN), LinkedIn Corp (LNKD), Match Group (MTCH),
Netflix Inc (NFLX), Pandora Media Inc (P), The Priceline Group Inc (PCLN), TripAdvisor, Inc. (TRIP), TrueCar Inc. (TRUE),
TubeMogul (TUBE), Twitter, Inc. (TWTR), Yahoo Inc (YHOO), Yelp Inc. (YELP), Zynga Inc (ZNGA), eBay, Inc (EBAY)
J.P. Morgan Equity Research Ratings Distribution, as of July 1, 2016

Overweight Neutral Underweight
(buy) (hold) (sell)
J.P. Morgan Global Equity Research Coverage 43% 45% 12%
IB clients* 52% 49% 37%
JPMS Equity Research Coverage 42% 50% 8%
IB clients* 68% 65% 51%
*Percentage of investment banking clients in each rating category.
For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table
above.
10
HONG KONG, THE

(852) 2800-8535 15 September 2016
Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered
companies, please see the most recent company-specific research report at http://www.jpmorganmarkets.com, contact the primary analyst
or your J.P. Morgan representative, or email research.disclosure.inquiries@jpmorgan.com.
Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation based
upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues.
Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US
affiliates of JPMS, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMS,
and may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public
appearances, and trading securities held by a research analyst account.
Other Disclosures
J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. Morgan Cazenove is a marketing
name for the U.K. investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co. and its subsidiaries.
All research reports made available to clients are simultaneously available on our client website, J.P. Morgan Markets. Not all research content is
redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your sales
representative.
Options related research: If the information contained herein regards options related research, such information is available only to persons who have
received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation's Characteristics and Risks of Standardized Options,
please contact your J.P. Morgan Representative or visit the OCC's website at http://www.optionsclearing.com/publications/risks/riskstoc.pdf
Legal Entities Disclosures

U.S.: JPMS is a member of NYSE, FINRA, SIPC and the NFA. JPMorgan Chase Bank, N.A. is a member of FDIC. U.K.: JPMorgan Chase N.A., London
Branch, is authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and to limited regulation by
the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from J.P. Morgan on
request. J.P. Morgan Securities plc (JPMS plc) is a member of the London Stock Exchange and is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England & Wales No. 2711006. Registered Office 25
Bank Street, London, E14 5JP. South Africa: J.P. Morgan Equities South Africa Proprietary Limited is a member of the Johannesburg Securities
Exchange and is regulated by the Financial Services Board. Hong Kong: J.P. Morgan Securities (Asia Pacific) Limited (CE number AAJ321) is regulated
by the Hong Kong Monetary Authority and the Securities and Futures Commission in Hong Kong and/or J.P. Morgan Broking (Hong Kong) Limited (CE
number AAB027) is regulated by the Securities and Futures Commission in Hong Kong. Korea: This material is issued and distributed in Korea by or
through J.P. Morgan Securities (Far East) Limited, Seoul Branch, which is a member of the Korea Exchange(KRX) and is regulated by the Financial
Services Commission (FSC) and the Financial Supervisory Service (FSS). Australia: J.P. Morgan Australia Limited (JPMAL) (ABN 52 002 888 011/AFS
Licence No: 238188) is regulated by ASIC and J.P. Morgan Securities Australia Limited (JPMSAL) (ABN 61 003 245 234/AFS Licence No: 238066) is
regulated by ASIC and is a Market, Clearing and Settlement Participant of ASX Limited and CHI-X. Taiwan: J.P.Morgan Securities (Taiwan) Limited is a
participant of the Taiwan Stock Exchange (company-type) and regulated by the Taiwan Securities and Futures Bureau. India: J.P. Morgan India Private
Limited (Corporate Identity Number - U67120MH1992FTC068724), having its registered office at J.P. Morgan Tower, Off. C.S.T. Road, Kalina,
Santacruz - East, Mumbai 400098, is registered with Securities and Exchange Board of India (SEBI) as a Research Analyst having registration number
INH000001873. J.P. Morgan India Private Limited is also registered with SEBI as a member of the National Stock Exchange of India Limited (SEBI
Registration Number - INB 230675231/INF 230675231/INE 230675231) and Bombay Stock Exchange Limited (SEBI Registration Number - INB
010675237/INF 010675237). Telephone: 91-22-6157 3000, Facsimile: 91-22-6157 3990 and Website: www.jpmipl.com. For non local research reports,
this material is not distributed in India by J.P. Morgan India Private Limited. Thailand: This material is issued and distributed in Thailand by JPMorgan
Securities (Thailand) Ltd., which is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and
Exchange Commission and its registered address is 3rd Floor, 20 North Sathorn Road, Silom, Bangrak, Bangkok 10500. Indonesia: PT J.P. Morgan
Securities Indonesia is a member of the Indonesia Stock Exchange and is regulated by the OJK a.k.a. BAPEPAM LK. Philippines: J.P. Morgan Securities
Philippines Inc. is a Trading Participant of the Philippine Stock Exchange and a member of the Securities Clearing Corporation of the Philippines and the
Securities Investor Protection Fund. It is regulated by the Securities and Exchange Commission. Brazil: Banco J.P. Morgan S.A. is regulated by the
Comissao de Valores Mobiliarios (CVM) and by the Central Bank of Brazil. Mexico: J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P. Morgan Grupo
Financiero is a member of the Mexican Stock Exchange and authorized to act as a broker dealer by the National Banking and Securities Exchange
Commission. Singapore: This material is issued and distributed in Singapore by or through J.P. Morgan Securities Singapore Private Limited (JPMSS)
[MCI (P) 193/03/2016 and Co. Reg. No.: 199405335R], which is a member of the Singapore Exchange Securities Trading Limited and/or JPMorgan Chase
Bank, N.A., Singapore branch (JPMCB Singapore), both of which are regulated by the Monetary Authority of Singapore. This material is issued and
distributed in Singapore only to accredited investors, expert investors and institutional investors, as defined in Section 4A of the Securities and Futures Act,
Cap. 289 (SFA). This material is not intended to be issued or distributed to any retail investors or any other investors that do not fall into the classes of
accredited investors, expert investors or institutional investors, as defined under Section 4A of the SFA. Recipients of this document are to contact
JPMSS or JPMCB Singapore in respect of any matters arising from, or in connection with, the document. Japan: JPMorgan Securities Japan Co., Ltd. and
JPMorgan Chase Bank, N.A., Tokyo Branch are regulated by the Financial Services Agency in Japan. Malaysia: This material is issued and distributed in
Malaysia by JPMorgan Securities (Malaysia) Sdn Bhd (18146-X) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital
Markets Services License issued by the Securities Commission in Malaysia. Pakistan: J. P. Morgan Pakistan Broking (Pvt.) Ltd is a member of the
Karachi Stock Exchange and regulated by the Securities and Exchange Commission of Pakistan. Saudi Arabia: J.P. Morgan Saudi Arabia Ltd. is
authorized by the Capital Market Authority of the Kingdom of Saudi Arabia (CMA) to carry out dealing as an agent, arranging, advising and custody, with
respect to securities business under licence number 35-07079 and its registered address is at 8th Floor, Al-Faisaliyah Tower, King Fahad Road, P.O. Box
11
HONG KONG, THE

(852) 2800-8535 15 September 2016
51907, Riyadh 11553, Kingdom of Saudi Arabia. Dubai: JPMorgan Chase Bank, N.A., Dubai Branch is regulated by the Dubai Financial Services
Authority (DFSA) and its registered address is Dubai International Financial Centre - Building 3, Level 7, PO Box 506551, Dubai, UAE.
Country and Region Specific Disclosures

U.K. and European Economic Area (EEA): Unless specified to the contrary, issued and approved for distribution in the U.K. and the EEA by JPMS plc.
Investment research issued by JPMS plc has been prepared in accordance with JPMS plc's policies for managing conflicts of interest arising as a result of
publication and distribution of investment research. Many European regulators require a firm to establish, implement and maintain such a policy. Further
information about J.P. Morgan's conflict of interest policy and a description of the effective internal organisations and administrative arrangements set up
for the prevention and avoidance of conflicts of interest is set out at the following link https://www.jpmorgan.com/jpmpdf/1320678075935.pdf. This report
has been issued in the U.K. only to persons of a kind described in Article 19 (5), 38, 47 and 49 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (all such persons being referred to as "relevant persons"). This document must not be acted on or relied on by persons who are not
relevant persons. Any investment or investment activity to which this document relates is only available to relevant persons and will be engaged in only
with relevant persons. In other EEA countries, the report has been issued to persons regarded as professional investors (or equivalent) in their home
jurisdiction. Australia: This material is issued and distributed by JPMSAL in Australia to "wholesale clients" only. This material does not take into
account the specific investment objectives, financial situation or particular needs of the recipient. The recipient of this material must not distribute it to any
third party or outside Australia without the prior written consent of JPMSAL. For the purposes of this paragraph the term "wholesale client" has the
meaning given in section 761G of the Corporations Act 2001. Germany: This material is distributed in Germany by J.P. Morgan Securities plc, Frankfurt
Branch and J.P.Morgan Chase Bank, N.A., Frankfurt Branch which are regulated by the Bundesanstalt fr Finanzdienstleistungsaufsicht. Hong Kong: The
1% ownership disclosure as of the previous month end satisfies the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons
Licensed by or Registered with the Securities and Futures Commission. (For research published within the first ten days of the month, the disclosure may
be based on the month end data from two months prior.) J.P. Morgan Broking (Hong Kong) Limited is the liquidity provider/market maker for derivative
warrants, callable bull bear contracts and stock options listed on the Stock Exchange of Hong Kong Limited. An updated list can be found on HKEx
website: http://www.hkex.com.hk. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of share trading, and
that a loss may occur due to the exchange rate in the case of foreign share trading. In the case of share trading, JPMorgan Securities Japan Co., Ltd., will be
receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the commission rate which was individually
agreed between JPMorgan Securities Japan Co., Ltd., and the customer in advance. Financial Instruments Firms: JPMorgan Securities Japan Co., Ltd.,
Kanto Local Finance Bureau (kinsho) No. 82 Participating Association / Japan Securities Dealers Association, The Financial Futures Association of Japan,
Type II Financial Instruments Firms Association and Japan Investment Advisers Association. Korea: This report may have been edited or contributed to
from time to time by affiliates of J.P. Morgan Securities (Far East) Limited, Seoul Branch. Singapore: As at the date of this report, JPMSS is a designated
market maker for certain structured warrants listed on the Singapore Exchange where the underlying securities may be the securities discussed in this
report. Arising from its role as designated market maker for such structured warrants, JPMSS may conduct hedging activities in respect of such underlying
securities and hold or have an interest in such underlying securities as a result. The updated list of structured warrants for which JPMSS acts as designated
market maker may be found on the website of the Singapore Exchange Limited: http://www.sgx.com.sg. In addition, JPMSS and/or its affiliates may also
have an interest or holding in any of the securities discussed in this report please see the Important Disclosures section above. For securities where the
holding is 1% or greater, the holding may be found in the Important Disclosures section above. For all other securities mentioned in this report, JPMSS
and/or its affiliates may have a holding of less than 1% in such securities and may trade them in ways different from those discussed in this report.
Employees of JPMSS and/or its affiliates not involved in the preparation of this report may have investments in the securities (or derivatives of such
securities) mentioned in this report and may trade them in ways different from those discussed in this report. Taiwan: This material is issued and
distributed in Taiwan by J.P. Morgan Securities (Taiwan) Limited. India: For private circulation only, not for sale. Pakistan: For private circulation only,
not for sale. New Zealand: This material is issued and distributed by JPMSAL in New Zealand only to persons whose principal business is the investment
of money or who, in the course of and for the purposes of their business, habitually invest money. JPMSAL does not issue or distribute this material to
members of "the public" as determined in accordance with section 3 of the Securities Act 1978. The recipient of this material must not distribute it to any
third party or outside New Zealand without the prior written consent of JPMSAL. Canada: The information contained herein is not, and under no
circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer
to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be
made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly
registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or
territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in
any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities
of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted
through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment
upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence.
Dubai: This report has been issued to persons regarded as professional clients as defined under the DFSA rules. Brazil: Ombudsman J.P. Morgan: 0800-
7700847 / ouvidoria.jp.morgan@jpmorgan.com.
General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan Chase & Co.
or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy except with respect to any disclosures relative to
JPMS and/or its affiliates and the analyst's involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market
for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change
without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any
financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not
intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this report must make its own
independent decisions regarding any securities or financial instruments mentioned herein. JPMS distributes in the U.S. research published by non-U.S.
affiliates and accepts responsibility for its contents. Periodic updates may be provided on companies/industries based on company specific developments or
announcements, market conditions or any other publicly available information. Clients should contact analysts and execute transactions through a J.P.
Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise.
"Other Disclosures" last revised July 9, 2016.
12
HONG KONG, THE

(852) 2800-8535 15 September 2016
Copyright 2016 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan. #$J&098$#*P
13

JP Morgan Delayed Alibaba Group Holding Limited 1

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

JP Morgan Delayed Alibaba Group Holding Limited 1

Caricato da

Copyright:

Formati disponibili

CompletedUNIVERSITY

28 mins/user/day, 41% DAU/MAU ratio), mgmt. elaborated commercial (1-212) 622-6571

Core commerce investment focal areas. Mgmt highlighted 3 investment areas 90

Bloomberg BABA US, Reuters BABA

Alex Yao Asia Pacific Equity Research

More notes from the meetings

Expanding value proposition to merchant; GMV no longer a key metric to

Top 3 investment focal areas

Alex Yao Asia Pacific Equity Research

Opportunity in cross-broader ecommerce

Alex Yao Asia Pacific Equity Research

Investment Thesis, Valuation and Risks

US$305.2bn for core commerce business, based on CY2017 net profit of

Alex Yao Asia Pacific Equity Research

Figure 1: Alibaba Income Statement

Margin Analysis (%):

YoY Change (%):

Source: J.P. Morgan estimates, Company data.

Alex Yao Asia Pacific Equity Research

Figure 2: Alibaba Revenue Drivers

Revenue breakdown #REF! #REF! #REF! #REF!

Source: J.P. Morgan estimates, Company data.

Alex Yao Asia Pacific Equity Research

Figure 3: Alibaba Revenue Drivers (Contd)

Intl retail GMV

Implied take rate

Paying members 577,000 646,240 697,939 739,816 2,660,995 3,748,148 5,088,762

ARPU 2,154 2,409 2,457 2,555 9,575 11,717 14,299

Source: J.P. Morgan estimates, Company data.

Alex Yao Asia Pacific Equity Research

Alibaba Group Holding Limited: Summary of Financials

Source: Company reports and J.P. Morgan estimates.

Alex Yao Asia Pacific Equity Research

Alex Yao Asia Pacific Equity Research

Alibaba Group Holding Limited (BABA, BABA US) Price Chart

Date Rating Share Price Price Target

J.P. Morgan Equity Research Ratings Distribution, as of July 1, 2016

Alex Yao Asia Pacific Equity Research

Legal Entities Disclosures

Alex Yao Asia Pacific Equity Research

Country and Region Specific Disclosures

"Other Disclosures" last revised July 9, 2016.

Alex Yao Asia Pacific Equity Research

Potrebbero piacerti anche