Alibaba Group Holding Ltd Company is a Chinese multinational online company. Specializing in e-commerce, retail, internet and technology. Founded by Jack Ma on 4 April 1999 in Hangzhou, Zhejiang. Alibaba is a public company and traded as NYSE: BABA.
Alibaba Group Holding Ltd ADR (BABA N) Extended Graph Analysis
1. BABA CASH FLOWS
|Net cash provided by operating activities||41,217,000,000||56,836,000,000||80,326,000,000||125,171,000,000||150,975,000,000||196,996,000,000|
|Net cash used for investing activities||-53,454,000,000||-42,831,000,000||-78,364,000,000||-83,890,000,000||-151,060,000,000||-97,828,000,000|
|Net cash provided by (used for) financing activities||87,497,000,000||-15,846,000,000||32,914,000,000||20,359,000,000||-7,392,000,000||68,605,000,000|
|Free cash flow||33,512,000,000||45,991,000,000||62,780,000,000||95,335,000,000||101,332,000,000||147,353,000,000|
- Cash provided by operating activities was CNY 196.996 billion in 2020.
- Cash used for investing activities were CNY -97.8 in 2020.
- Net cash provided by financing activities was CNY 68.605 billion in 2020.
- Capital expenditure was CNY -49.6 billion in 2020.
- Free cash flow was CNY 147 billion.
- Working capital was CNY 62.6 billion in 2020.
- Cash from operations was increasing year-over-year and has a growth rate of 378 percent in five years.
- Cash from investing activities were purchases of property, plant and equipment, acquisitions and purchases of investments.
- Cash provided by (used for) financing activities were debt repayment and common stock repurchase.
- Capital expenditures were purchases of property, plant and equipment and purchases of intangibles.
- Free cash flow increases year-over-year and has a growth rate of 340% in five years.
- Working capital was erratic in movement in the last five years.
Alibaba was capable and efficient in maintaining a positive cash from operations, free cash flow and working capital in the last five years.
2. BABA BALANCE SHEET
|Net property, plant and equipment||12,244,000,000||16,505,000,000||24,897,000,000||75,866,000,000||98,449,000,000|
|Total non-current assets||113,325,000,000||230,380,000,000||324,296,000,000||460,269,000,000||694,803,000,000|
- Total cash was CNY 203 billion in 2019.
- Current assets were CNY 270 billion in 2019.
- Net property, plant and equipment was CNY 98 billion in 2019.
- Non-current assets were CNY 695 billion in 2019.
- Total assets were CNY 965 billion in 2019.
- Current liabilities were CNY 208 billion in 2019.
- Non-current liabilities were CNY 265 billion in 2019.
- Total liabilities were CNY 473 billion in 2019.
- Retained earnings were CNY 258 billion in 2019.
- Stockholders equity was CNY 492 billion in 2019.
- Cash was increasing year-over-year and has a growth rate of 61% in five years. It represents 21 percent of the total assets.
- Current assets represent 28 percent of total assets and have a growth rate of 90 percent in five years.
- Net property plant and equipment represents 10 percent of total assets. It grew 704 percent in five years.
- Non-current assets was 72 percent of total assets and it grew 513 percent in five years.
- Total assets grew 278 percent in five years.
- Current liabilities represent 44 percent of total liabilities.
- Non-current liabilities represent 56 percent of total liabilities.
- Total liabilities represents 49 percent of total equities and liabilities.
- Retained earnings represent 52 percent of total equities.
- Stockholders equity represents 41 percent of total equities and liabilities.
The balance was strong and in good health. The company was efficient in maintaining a solid balance sheet in the last five years.
3. BABA INCOME AND MARKET
- Revenue was CNY 489 billion in 2020.
- EBIT was CNY 94 billion in 2020.
- Net Income was CNY 172 billion in 2020.
- EBITDA was CNY 213 billion in 2020.
- Market capitalization was CNY 3 trillion in trailing twelve months.
- The calculated intrinsic value was CNY 12 trillion in trailing twelve months.
- Revenue increases year-over-year and has grown 542 percent in five years.
- EBIT has a growth of 299 percent in five years.
- Net income grew 609 percent in five years.
- Market capitalization increased year-over-year and grew 138 percent in five years.
- Intrinsic value was over 276 percent against market capitalization, therefore market price was undervalued.
Alibaba was profitable in the last five years. The management was able to generate more than enough revenue for the operation of the business.
4. BABA FINANCIAL RATIOS
|Asset turnover (average)||0.42||0.33||0.36||0.4||0.45||0.43|
|Return on assets %||13.16||23.06||10.03||10.46||10.41||15.37|
|Return on equity %||27.63||39.43||17.62||19.85||20.42||28.54|
|Return on invested capital %||13.99||11.08||12.13||9.72||9.89||12.16|
- Asset turnover was averaging 0.43 in 2020.
- Return on assets was 15.37 percent in 2020.
- Return on equity was 28.54 percent in 2020.
- Debt/Equity ratio was 0.16 in 2020.
- Return on invested capital was 12.16 percent in 2020.
- Interest coverage was 37.63 in 2020.
- Asset turnover indicates that for every $1 in asset, the company generates 0.43 CNY.
- Return on assets indicates that the company produces .15 CNY of net income for every CNY invested in assets.
- Return on equity indicates that for every CNY invested in equity, it earns .2854 CNY net income.
- Debt/Equity ratio indicates that for every CNY in equity, the company has .16 CNY in leverage.
- Return on invested capital means the company earns .12 CNY profit for its invested capital.
- Interest coverage means that the company can afford to pay its interest payment 38 times of its current financial obligations.
The financial ratios show that the company is managed very well from its business operations. The company is profitable.
5. BABA KEY EXECUTIVE
|Sophie Minzhi WU||Chief Customer Officer|
|Timothy A. Steinert||General counsel and Corporate Secretary|
|Luyuan Fan||Pres, Alibaba Digital Media and Entertainment|
|J. Michael Evans||Director and President|
|Shan Trudy Dai||President Wholesale Marketplaces|
|Jeff Jianfeng Zhang||Chief Technology Officer and President|
|Junfang Jessie Zheng||Chief Risk Officer and Chief Platform Governance Officer|
|Pen-Hung Chris Tung||Chief Marketing Officer|
|Judy Wenhong Tong||Chief People Officer|
Alibaba does not reveal the key executive compensation.
6. BABA LOBBYING AND CONTRIBUTIONS
Alibaba has been spending annual lobbying and contributions since 2011. The figures vary every period. A Note from OpenSecrets is quoted as follows:
NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.
Source: OpenSecret.org Center for Responsive Politics
7. BABA FINANCIAL STRENGTH
|Market value of equity||3,404,603,312,500|
|Book value of total liabilities||472,819,000,000|
|A – Working Capital / Total Assets||0.06||1.2||0.08|
|B – Retained Earnings / Total Assets||0.27||1.4||0.37|
|C – EBIT / Total Assets||0.10||3.3||0.32|
|D – Market Value of Equity / Book Value of Total Liabilities||7.20||0.6||4.32|
|E – Sales / Total Assets||0.51||1||0.51|
Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.
Alibaba. has a Z-Score of 5.60. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.
Alibaba Group Holding Ltd ADR has a strong balance sheet and is financially healthy. The income statement shows that the company was profitable and liquid. The stock price of Alibaba was undervalued, therefore, could be a good Buy.
Researched and written by Criselda