Many of the themes apparent in my January write-up continue to be apparent today. The mobile exposure numbers remain simply mind-blowing (126m net adds!)
Back to the cash flow how does US$7.7bn of Alibaba's FY15 sound? Well that is a cool 4.1% free cash flow yield which is very solid.
Of course another way to look at it is that the company is trading at a historic FY x29 ebitda or over x40 non-GAAP diluted EPS. So hardly a value situation per se and, as noted below, the company's acquisition strategy is diluting underlying margins too.
My view would be that building this sort of a client base predominately in the world's fastest growing large economy is clearly structurally very interesting. Just under 40% ebitda growth for a just over x40 earnings rating...peg ratio advocates could certainly make that work.
So not a stock for everyone maybe but I can still make it work and want to add further over time/on weakness. The US$80 level the share bounced from today is one such level, US$70 (or 5% free cash flow yield using the FY15A free cash generation) is another.
Alibaba: i like the structural growth and cash flow and the management evolution announced today also sounds sensible. I am looking for opportunities to augment my holding.