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Record sales on Single's Day but have you missed the Alibaba bonanza?

Alibaba is holding a well attended press day at its Hangzhou HQ. A huge screen tracks the amount of merchandise being bought and sold on its websites on Single's Day 2014, held annually on 11/11 as an anti-valentine's day. Already the 6 Billion USD record set last year has been smashed. Peter Garnry, Head of Equity Strategy cuts through the hype and analyses what's likely to happen to Alibaba's stock after the Singles's Day excitement has died down. Peter warns that, in valuation terms, the stock price, now around 120 UD, appears over-stretched.

For example, Peter points out that Alibaba trades 27 times Enterprise Valuation/EBITDA on a two year forward basis compared with 15.3 times for Facebook, an 80% difference.

However, there's little doubt that online retail is booming in China as the country switches from an export driven economy to a consumer driven model. Neil Flynn, Head Equity Analyst at Chinese Investors says "In 2013, Alibaba had sales of 35 billion yuan (about 5.6 Billion USD) on Singles Day, which was 83% higher than the previous year, and the 2012 sales figure of 19.1 bn yuan was passed by 1pm. Alibaba founder Jack Ma says he wants the firm to achieve 100 billion yuan (around 16 Billion USD) in sales in the coming years in a natural way, as opposed to deliberately targeting the figure."

03:33 minutes
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