Alibaba – Does it say “open sesame” for IPO treasure?

There is nice story about treasure behind name of this Chinese company.

Impressive is also the company carrying this name: their profit rose from US$1.02 billion to US$1.84 billion. Expected revenue level for 2016 is even more attractive: US$18 billion!  The analysts are taking it from there adding nice 25x multiple with 20 per cent discount rate and thus reaching an entity worth US$98 billion today. So it seems as valuable as Facebook was during IPO.

It will be interesting to see what happens. I do not predict any specific fate for this “treasure box”, but rather pointing few things that make me wonder.

Alibaba’s market share: Alibaba is currently dominating huge share of Chinese online market. It seems difficult to maintain current position, if competition is opening up.

Alibaba’s market: Alibaba is focused in China. The growth expectations of that market seem to be slowing down from faster period of growth experienced earlier.

Analysts seem to be little undesided too with the valuation. The latest comment i found has already decreased estimate to $62 billion. Timing is cruicial in IPO as you can see from valuation changes. Intresting to see what happens. Merchandise is excellent, but what it is worth?