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    China Business
     May 7, '14

Alibaba files for IPO

Alibaba Group, which accounts for about 80% of all e-commerce in China, has filed registration documents for what may be one of the biggest initial public offerings yet in the United States and one of the most keenly anticipated this year.

The prospect for investors in an IPO that may be worth between US$15 billion and $20 billion appears mouthwatering: last year,

Alibaba had net income of US$3.56 billion on revenue of $7.95 billion - or a profit margin of about 45%.

Until the sale, which may be months off, potential investors have to get to grips with just what in fact is up for grabs. For some indication of the complexity of what is - and is not - on offer see here for an overview, while Paul Gillis, Professor of Practice at Peking University's Guanghua School of Management, who reckons a sale might not take place before the autumn, adds insight into Alibaba's use of the structure referred to as avariable interest entity.

Meanwhile, a report by noted Chinese news website Caixin underlines the scope of Alibaba's interests and how the company's reach goes well beyond serving as a marketplace for Chinese-made products.

Its money market fund, Yu E Bao, launched by an Alibaba unit, Zhejiang Alibaba, through the parent company's payment service Alipay, has become China's top public investment fund, boasting more than 81 million users with over 540 billion yuan in investment. See here




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