I have created a sum of parts valuation of Alibaba with the following components

1. Lazada : 83% stake?

83% * 130b (As Lazada is slightly smaller than SE) = 108b USD.

2) Eleme (Alibaba’s food delivery service which they purchased 2018 at 9.5b USD)

Meituan is backed by Tencent (TCEHY) and will represent many proxy battles between BABA and Tencent in China. With 31% total market share we can roughly estimate the value of Eleme to be 300b* (31%/67.3%) = 138b USD

3) Ant Financial 30% Stake.

Current ANT Market cap… UNKNOWN. I am going to be conservative and assume 2/3 of value has been lost since IPO, such I am going to value (conservatively) ANT at 100b * 30% BABA stake = 30b USD

4) Cainiao (BABA’s equivalent to JD Logistics)

JD Logistic ticker symbol 2618.HK this had IPO’ed in 2021 at 260b HKD = 41b USD. It is quite difficult to compare the two as not much information is available. JD appears to operate with possible slightly more advanced technology, however BABA has significantly larger scale of operations (1 Trillion of sales in 2020 for BABA vs 114b USD

I am valuing it at 41b USD

5) Venture Capital.

This one is almost impossible valuate as Alibaba and Tencent are Chinas two largest VC firms and have a small to large stake in what appears everything. 80% of Chinese tech startups have taken a form of investment from BAT Bidu, Alibaba, Tencent) by the time they reach $5 billion in valuation. Tencent’s listed and unlisted investments were worth some $259 billion in total as of March 2 2021. If we add an arbitrary 50b as to represent the remainder of BABA’s VC

Adding

1 2 3 4 5 = 240b

6) Cash BABA as of Q12021 had 75b in cash in the books

So 240b 75b = 315b.

Current BABA Market cap as of June 13 2021 is 575 Billion

Which means we are buying an ecommerce business generating 27 billion in cashflow and that just grew revenue at 34% and the largest cloud in Asia growing revenue at 40% for 575b - 315b = 260b. Almost 9x 2020 cash flow.

​

Valuation Link