EFTA01457507

8 May 2015 Software & Services Alibaba Revision of estimates Based on the results of the FY 2015 4Q and our discussions with senior management, we change our forecasts as follows: We lift our FY16/17E China retail GMV assumption by 2%/2% • We lift our FY16/17E revenues forecast by 3%/4% • We lift FY16/I 7E non-GAAP operating income by 3%/5%. • We increase FY16/17E non-GAAP EPADS by 0%/1% respectively. 'Figure I: Revision of estimates 6 Zoi 67 PI•J C61.66 06 re. it \,54594 Catnaps %WY el!r learg , 00141 RAM b1) 1444 3 274 3329 2% t%7 3993 4013 2% 64 NI Itgaut 76201 PI 264 101 WI I% 102 50) 0% 1,142Z '31 43 4% 14 , 21 0% Ill , I Gros. 04,041 523 70 091747 11451 3% 71 417 0% 91 464 91450 4% 39 „ 33 „. 9 7% 1 r 33 C11011/A pas G11441 40 177 53 211 561116 3% 34 210 1% 70635 73333 4% 2% Of 3 i 4% PI :Cr Err tOAAPr 22 615 31 148 32 151 3% 36965 43% 4571$ 03 495 6% 52 454 4% 61.399 66 219 6% 671783 41 011104, 70 GA741 35844 4745 48 672 3% 37 717 29% 63 364 65 .250 3% 13 475 24% 84 ,61$ a 223 1% 74.381 III PST 1e4.141 31836 24 950 37 454 9% 40610 .7% 55 140 59 3% 33 9421t, 73.230 83010 6% 0674 41 Pa Wane 4649391 23 301 41 145 27481 4% 3t 241 •72% 41812 .119 43 318 7% 01 103 SI 036 IN 213 4% 03 852 431 Ka art* 410,44API 31245 47005 46.785 0% 45520 3% 63184 63.718 7% 61808 3% 79.313 82.169 4% OD 536 41 • 898 166481 Deuted IRAQ) WW1 0AAPI 943 1074 1051 4% 11202 16 19 16 37 7% 11727 4% 21 67 7250 4% 12569 421 13 19 1797 1788 Oh 517.30 3% 2337 224 00 7% 123.22 4% 2655 30 70 4% 13742 41 P4 gad tR/70. 991915.444,%511% Ga. nun 687% 036% 701% 997% 03% 002% 706% 04% 699% 07% 707% 709% 02% 70 5% 041 79100-1.13001, 5210 13.74 537%' 01% 530% 06% 517% 544%' 02% 136% 06% 519% 5433' 02% 56 0% ESIT ,•3144 ,C511141 297% 31 A% 315% 0.0% 36.1% 4.3% )5 I% 35 8% 0.7% 39 0% -34% 37 0% 36 6% 0.7% 1% :01.39 31 Cliff flair 61.514,0149) 170% 475% 477%' 0.2% N.% 00 VA a69% 450%' 04% 393% 92% 411% 50 :%' OM 428% 1141 Net mwr (WAR, 33 7% 294% 3 9% " 335% 40% 329%. 320%' Oa 34 2% -22% 359% 351%' 493 4 .4 mwp11no, 60491 la % 436% 474% 451%' • 13% 44 416 la 614% 471%' 460% 1,93 469% Oa' 5331 61% % Riau* 45% 30% 34% 4% 35% 4% 31% 13%' 7% 31% 9% 31% 17%' 3% 76% .21 Cron p -AI 34% 32% 36% 3% 30% 0% 33% 34% 116 32% 2% 75% Zro. 2% 30% 41 CEPTIG.440, um Ma-6MP) 23% 80% a a 36% 4% 4% 63% 5% 47% 31% 17% 34% 51% 11% 4% 2% 42% 4 9% 34% 77% 37% 995. 3% 3% 79% res 71 41 kat mono 03.4.411) I% 20% 18% 4% 34% 52% 58%' 3% 47% 10% 36% WIG' 4% 49% .10 Net are ficr,G4AP( 20% 41% 41% 4% 37% 4% 34% 36%' 2% 36% 0% 26% 2101/ 2% 45% .1127 BADS WAN or.46.7 13% 14% 11% -3% .77% $1% SW 3% 64% 1216 31% 333' 4% 49% 411 20909 Men GA1Ill Sal II% 36% 36% 17% 4% 3311 35%' 2% 31% 1% 24% 7%' 3% 4,3% 34.41.4 Deteulle 64, 71 Valuation and risks Valuation Our target price of US$104 is based on a weighted average of 1) forward CY15E non-GAAP PER (50% weighting), 2) CY15E EV/EBITDA (3O% weighting), and 3) a 20% DCF value. TP implies a CY15E PER of 36 (vs prior 38x), a PEG of 1.1x (unchanged) against a CY15-17 CAGR of 33% (vs prior 33.2%1. Downside risks • Mounting competitive pressures from global/local e-commerce platforms and off-line players • Failure to maintain sound relationships with participants in the ecosystem • Inability to develop efficient technological platforms and to innovate Failure to monitor fraudulent transactions on the platform which can result in slowdown in user base growth and activity Page 6 Deutsche Bank AG/Hong Kong CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0117078 CONFIDENTIAL SDNY_GM_00263262 EFTA01457507