China’s Alibaba Mulls IPO Offering

Alibaba Group, China's largest e-commerce company, is mulling to hold an international public offering (IPO).

This, as Jack Ma, the founder and chairman of Alibaba Group Holding Ltd., expects China's online retail to surge in the next five years.

The potential IPO is likewise seen as part of strategy to offset the results that comes from Yahoo's desire to sell half its 40 per cent control stake in the company in the next few months.

"They say, 'please make money because if you don't make money we go bankrupt,'" Mr Ma said during a keynote speech at the Credit Suisse Asian Investment Conference in Hong Kong on Wednesday. Mr Ma was referring to the reactions of the small and midsize enterprises that rely on its e-commerce platforms to make money when the Yahoo announcement was made.

"I say, 'don't worry about us, we are making money. I think when we IPO you'll know the numbers,'" Mr Ma, who founded Alibaba in 1999, said.

"If they list, it will be the largest IPO this year," Eric Qiu, a Hong Kong-based analyst, was quoted by Bloomberg.

In a March 1 filing, Yahoo said Alibaba's net income jumped 81 per cent to $484.5 million in 2012. Sales likewise surged 74 percent to $4.08 billion.

If the IPO pushes through, bankers and investors believe Alibaba's market capitalisation would become bigger than Tencent and Baidu combined, Mr Qiu said.

China's largest Internet company, Tencent is valued at $63 billion. Baidu Inc., meantime, as the owner of China's largest search engine, is valued more than $29 billion.

Mr Ma is scheduled to step down in May as chief executive of Alibaba Group but will remain as its executive chairman. He will be replaced by Jonathan Lu.

Mr Ma said in June 2012, at the time of the Yahoo announcement, that the potential IPO could happen within five years.

According to a Morgan Stanley research note in February 2013, the IPO could value the firm at US$80 billion.

Projections made by Forbes said Alibaba could rake in the following revenues and net income this calendar year: $860 million in revenue and $129 million in net income by first quarter, $1,106 million in revenue and $243 million in net income by second quarter, $1,187 million in revenue and $249 million in net income by third quarter and $1,790 million in revenue and $501 million in net income by fourth quarter.