Discounted Cash Flow (DCF) Analysis Unlevered

Alibaba Group Holding Limited (BABA)

Consumer Cyclical

Operating Data

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Revenue	5,544.90	8,464.29	12,307.08	15,639.83	22,968.66	39,593.37	56,246.35	83,098.35	122,769.51	181,379.67	267,970.32
Revenue (%)
EBITDA	2,007.25	4,894.05	6,125.23	13,240.68	9,490.65	14,974.21	18,595.04	40,443.97	59,751.92	88,277.48	130,421.16
EBITDA (%)
EBIT	1,856.99	4,627.43	5,399.11	12,657.32	8,723.50	13,584.49	16,362.06	37,319.47	55,135.79	81,457.61	120,345.47
EBIT (%)
Depreciation	150.27	266.63	726.12	583.37	767.15	1,389.73	2,232.98	3,124.50	4,616.13	6,819.88	10,075.68
Depreciation (%)

Balance Sheet Data

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Total Cash	6,062.79	9,387.74	20,720.19	17,890.40	21,884.54	33,254.47	30,322.41	87,394.54	129,116.69	190,757.00	281,824.39
Total Cash (%)
Account Receivables	-	-	-	-	-	-	-	-	-	-	-
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	-	-	-	-	-	-	-	-	-	-	-
Accounts Payable (%)
Capital Expenditure	-353.76	-770.25	-1,244.25	-1,676.59	-1,596.32	-3,104.12	-5,298.41	-7,188.01	-10,619.56	-15,689.34	-23,179.43
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 194.66
Diluted Shares Outstanding	3,080.60
Cost of Debt
Tax Rate	15.85
After-tax Cost of Debt	-0.74
Risk-Free Rate
Market Risk Premium
Cost of Equity	20.78
Total Debt	16,691.64
Total Equity	599,669.01
Total Capital	616,360.66
Debt Weighting	2.71
Equity Weighting	97.29
Wacc

Build Up Free Cash

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Revenue	5,544.90	8,464.29	12,307.08	15,639.83	22,968.66	39,593.37	56,246.35	83,098.35	122,769.51	181,379.67	267,970.32
EBITDA	2,007.25	4,894.05	6,125.23	13,240.68	9,490.65	14,974.21	18,595.04	40,443.97	59,751.92	88,277.48	130,421.16
EBIT	1,856.99	4,627.43	5,399.11	12,657.32	8,723.50	13,584.49	16,362.06	37,319.47	55,135.79	81,457.61	120,345.47
Tax Rate	14.59%	12.06%	20.91%	10.57%	23.98%	22.12%	15.85%	17.15%	17.15%	17.15%	17.15%
EBIAT	1,586.13	4,069.57	4,269.91	11,319.02	6,631.72	10,580.26	13,768.77	30,917.97	45,678.21	67,484.99	99,702.32
Depreciation	150.27	266.63	726.12	583.37	767.15	1,389.73	2,232.98	3,124.50	4,616.13	6,819.88	10,075.68
Accounts Receivable	-	-	-	-	-	-	-	-	-	-	-
Inventories	-	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	-	-	-	-	-	-	-	-	-	-
Capital Expenditure	-	416.49	474.00	432.34	-80.27	1,507.80	2,194.29	1,889.60	3,431.55	5,069.78	7,490.09
UFCF	1,736.39	4,752.68	5,470.02	12,334.73	7,318.60	13,477.78	18,196.03	35,932.07	53,725.90	79,374.64	117,268.10
WACC
PV UFCF								24,816.15	30,836.28	37,860.48	46,484.73
SUM PV UFCF											72,189.64

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	20.33
Free cash flow (t + 1)	121,958.82
Terminal Value	746,839.10
Present Value of Terminal Value	296,044.82

Intrinsic Value

Enterprise Value	368,234.46
Net Debt	-13,630.76
Equity Value	381,865.22
Shares Outstanding	3,080.60
Equity Value Per Share	123.96

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