Alibaba likely to launch IPO sooner

Alibaba Group Holding's financing business is likely to draw favorable investor response in an expected IPO of China's largest e-commerce provider, possibly next year, analysts said Thursday.

"Alibaba's e-commerce platform and small loan business will be appealing to investors. Its platform business still has large room for growth and the burgeoning loan business will help rake in fat profits in the future," Lu Zhenwang, an independent e-commerce analyst, told the Global Times.

The Hong Kong-based Ming Pao reported Wednesday that if the market allows, Alibaba will launch its IPO earlier than expected and some investment banks have begun preparing for the IPO.

Alibaba privatized its Hong Kong-listed B2B (business-to-business) arm in June for HK$17.9 billion ($2.3 billion) in order to pave the way for the floatation of the entire group.

"Investors in both Hong Kong and US stock markets have low confidence in Chinese firms. So it is not a good time to go public in these markets this year," said Li Weidong, an analyst with ChinaVenture Investment Consulting.

"The Alibaba IPO will be a huge offering in the Chinese Internet sector," Lu said. "It could turn out to be the largest one among the domestic Internet companies that will go public in the following 10 years."

To its rivals in the e-commerce business, a listing by Alibaba means money to strengthen its services like logistics, Lu said, which is not good news for the rivals.

Shanghai Securities News reported Thursday, citing insiders, that Alibaba is closing an $8 billion financing plan. The financing will bring the group's valuation to over $40 billion.

The bulk of the money will be used to buy back the 20 percent stake in itself from Yahoo! Inc at a price tag of $7.1 billion, the report said. Alibaba has been trying to buy back the shares to have more control over its own business and as part of the group listing effort. The willingness got stronger as its ties with Yahoo turned sour since January 2010.

According to the agreement signed with Yahoo in May, Alibaba would go public by the end of 2015 at the latest.

Alibaba announced Saturday that starting from January 1 of 2013, it would develop itself into an e-commerce platform, as well as a finance and data service provider.

Compared with commercial banks, Alibaba has its competitive edge in the small loan business. "The membership firms on the platform of Alibaba are stable and small loans by Alibaba bear low risks as the group has clear idea of qualifications of these members," Lu said.

Alibaba spinned off its profit-making Alipay payment unit without permission from Yahoo in 2011, which somehow dampened investors' investment willingness, Li told the Global Times. "But the stable performance and promising financing business of Alibaba will be interesting to investors."