A veritable commercial legend

Editor's note / Even though nothing surprising has been done since then, Jack Ma and his Alibaba are already a veritable commercial legend in the Internet age.

But this will be known to the fate of the thin man, but obviously not satisfied with this. For him, what is "destiny"? Where is the "limit"? So far there is no exact answer. Perhaps, at his own moment, he is also asking himself.

The internet era was inherently fast-paced. Most people are dazed and upset about what will happen tomorrow, and Ma and Alibaba seem to be out here. They seem clear-cut, determined, and optimistic.

Will Ma be the successful businessman who continues to create myths? Alibaba will be invincible that miraculous company?

Who knows?

Hao throw more than 700 million?

After all, Jack Ma bought UC gifted 4 billion US dollars or 5 billion US dollars, until now both sides were not disclosed. But what is certain is that this figure has set a record for China's Internet M & A.

But for Ali and Jack Ma, that's just part of a massive merger. According to the statistics of Qingke Private Equity, an equity investment financial database, from January to June 2014, Ali acquired more than 12 companies and the total amount of M & A transactions was nearly RMB30 billion. If we count the mergers and acquisitions in 2013, Qingdao Haier, Celestica Fund, Gold Map, Sina Weibo and other companies spent nearly 200 billion yuan, the past two years, Ma and Alibaba funds for the acquisition, a conservative estimate has exceeded 700 100 million yuan.

Although in the history of world mergers and acquisitions, the merger of more than $ 5 billion is not uncommon and the companies that have used more than $ 10 billion in expansion in two years are also not uncommon. Even in the mid-20th century, in the diversified mergers and acquisitions in Europe and the United States, mergers and acquisitions of chemical companies The story of acquisition of computer companies by food companies and automobile groups also occurs from time to time. However, there are few precedents for the large span of mergers and acquisitions involving industries.

From Internet companies, fund companies, film and television production companies to football clubs, from drug sales companies, financial technology companies, postal companies to financial media, Alibaba is like an octopus and touches deeply into traditional industries. The end of June 2014, came Ma Lian shares Unicom, the capital market turmoil; then there are rumors that Ma intends to raise cattle, will invest in Iraq's livestock company. Similar rumors endless, the story is true and false, the industry involved is vastly different. Ma is not afraid of indigestion?

"When Alibaba was listed, it was the best time for the company." An international investment bank's fund manager told the China Business reporter that all of Ma's acquisitions provide an imaginative space for the valuation of the market. "He needs a Larger plates look like more promising business types. "

For whom imagination?

According to the prospectus provided by Ali and subsequent documents released, 2C e-commerce business, including Taobao's advertising model and Lynx commission model, is the core source of revenue, accounting for more than 78% , The domestic electricity supplier is still its most profitable business.

However, in many research institutions, the domestic online shopping market has gradually become more stable. For example, iResearch data show that physical 2C e-commerce transaction growth has entered the 20% to 30% range, the growth rate will continue to decline, by 2017, the growth rate will drop to 17.4% level.

Another data shows that Alibaba's source of income is mainly the conversion of GMV into e-commerce advertising and commission income. In short, customers and businesses through Taobao or Lynx, each transaction the same goods, e-commerce platform to charge a certain percentage of the commission. Ali's current GMV to revenue conversion ratio of about 2.3% ~ 3% (iResearch data), but with the growing competition in domestic e-commerce, capital industry analysts believe that the data will be in line with the development The more mature eCommerce eBay is nearing 1.8% for eBay's total volume of revenue converted to revenue in 2013.

According to the updated IPO prospectus, the total volume of commodities traded in China's retail market dropped from 522.9 billion yuan in the same period of 2013 to 430 billion yuan in the first quarter of 2014. Ali's gross profit margin over the same period fell to 45.3% from 51.3% the previous year.

"In terms of e-commerce, the capital markets have a clear forecast of Ali's growth." The fund managers said the capital markets need a more attractive imagination.

Therefore, most of M & A Ali have a clear intention. In the era of mobile internet, e-commerce needs to be transferred from the PC to the mobile terminal. The integration of online and offline means the potential for future development. In Alibaba's IPO document, Alibaba.com emphasizes the application of other service categories in combination with its new expansion The mobile era has great potential for development, not only based on the current business of mobile, more Ali's innovative O2O applications and scenarios.

The reason for the acquisition of UC is that UC Browser is the largest mobile browser in the country and is said to occupy the largest share of mobile browsing in India at the same time. In the mobile era, Ali needs more traffic. High German acquisition of the map, because it is the largest navigation software. After getting through, Ali's businesses can locate the location of the entity, so as to achieve the goal of online and offline integration.

Ali assets are no longer "light"?

Some of Ma's mergers and acquisitions appear to capitalists to span a lot. "Why Alibaba makes more money than any other domestic electricity supplier is very important because of its asset-light mode." A domestic electricity analyst said that compared to Jingdong (29.03, -0.02, -0.07%) in logistics Input, the previous Ali without this pressure, cost-effective control, coupled with the huge cash flow, so that Alibaba "easy way."

But Ma 6.2 billion Hong Kong dollar into the culture of China, 5.4 billion stake in Intime Department Store, 1.2 billion stake in Evergrande Football Club, plus $ 249 million stake in Singapore Post, before the establishment of rookie logistics, which hoarding into the land. Ali's assets are no longer light, Jack Ma's empire in all walks of life.

This does bring a lot of imagination, for example, how to integrate pan-cultural enterprises into Internet finance and the development of electricity supplier to international logistics enterprises. However, the integration of these industries takes a long time to nurture, and Alibaba have the ability, the energy will be very great industry have successfully integrated into the Internet?

Ma Yun's previous idea is very clear. In an internal conference a few years ago, he made it clear that the B2C business is the first leg of the relay run in Ali, the second bar is Taobao and Alipay, the third bar is big data, the fourth bar will be finance, logistics, etc. business. However, the above acquisition of nearly 15 billion yuan, with the exception of Singapore Post, and the direction of Jack seems irrelevant.

One Singapore-based international fund trader said: "Once these patterns of Internet-based pan-cultural industries are identified, it will be another Lynx." The most important thing is that in 2014, Industry enterprises, either industry leaders or powerful challengers, all have good business performance. Many of Ali's investments are intervened in the role of strategic collaborators, and they will not exert any financial pressure on the empire in the future. .

A closer look at Jack Ma's investment strategy, he is usually first stock, that the target company has a clear enough future, and then try to control. For example, the previous Tianhong Fund, June 2013 Ali and Celestica launched after the balance treasure, until 2014 May Ali completed 51% of the holdings. The acquisition of Goethe-Software is also a model, beginning with Golds shareholders in 2013 at more than $ 294 million, which was brought under $ 1.1 billion in May 2014. UC mergers and acquisitions is no exception. Trader said the above fund fund: "With current capital flow Ali, Jack can use billions of dollars to bet a future."

Trading is easy to earn money?

Alibaba how much money?

The prospectus, updated on June 26, 2014, shows that Ali's operating profit in FY14 was 24.92 billion yuan. Although this is already a very good income, it is not always good. Another data shows that as of the first quarter of 2014, Alibaba still maintains a free cash flow of 32.246 billion yuan in the accounts, with the short-term investment and cash equivalents, up to 43.632 billion yuan. You know, this is Ali's account after a year of crazy mergers and acquisitions left behind.

Ali has been the darling of the capital markets and won a $ 8 billion syndicated loan in July 2013, of which $ 2.5 billion was for a three-year term loan, $ 1.5 billion for three-year revolving credit and $ 4 billion for a five-year term loan. The financing costs of the three-year and five-year loans were 2.93% and 3.43% respectively. Most of this loan, except for the 2012 debt rollover, is used for mergers and acquisitions in these two years.

M & A easy, but not easy to produce value.

From its earlier share capital in 2013 Takator software, Ali did not point stone into gold. In May 2013, Gold received a $ 294 million investment from Ali, and both parties then opened up an account system. High German users seem to grow rapidly, three quarterly reports in 2013, Germany and Germany map has 171 million users, an increase of double the number of users. However, this does not seem to have helped GAO Tak's finances. In the first quarter of 2014, GAO De's total revenue dropped 32.7% YoY and net loss was 46 million US Dollars, compared with a net profit of 5.7 million US Dollars in the same period of 2013.

With the acquisition of Aliyuan, how high German integration into Ali, how Ali from the management, access to high-end business? None of this is a one-time event.

Because of the short duration of the merger over the past two years, it is difficult to objectively and accurately evaluate its value. However, in the case of industrial economics, mergers and acquisitions have always been the simplest step. After the merger, the merger is the real "one thousand nine hundred and eighty-one difficult."