Alibaba announces plans for US IPO

China's e-commerce company Alibaba Group Holding Ltd announced Sunday plans for a US IPO, as Chinese companies flock to the US stock market to take advantage of soaring valuations.

An IPO in the US is expected to enhance Alibaba's "transparency" and allow the company to "pursue long-term vision and deals," read a statement e-mailed to the Global Times Sunday. But a spokesperson with Alibaba refused to indicate which bourse the IPO would be launched or the amount of money that they would aim to receive from the flotation.

Unnamed sources were quoted by Reuters Saturday as saying that the deal is expected to be worth more than $15 billion, making it one of the global Internet industry's largest IPOs since Facebook Inc's $16 billion in 2012.

Alibaba, owner of the country's leading business to consumer e-commerce platform tmall.com by sales volumes, becomes the latest major Chinese Internet company to tap US markets, just after its rival JD filed for a US IPO to raise $1.5 billion in late January. On Friday, Twitter-like social networking service Sina Weibo also filed for an IPO in the US market.

China will see more Internet enterprises issue stock offerings on the US market in 2014, as they, including Alibaba, need large amounts of financial support to help further expand operation and the US market usually gives a higher valuation than the stock market in China, said Liu Boyu, an IPO analyst with Beijing-based ChinaVenture Investment Consulting Group.

In addition, the threshold of an IPO in the US is lower for some aspects such as the revenue amount, Liu told the Global Times Sunday.

Analysts expect Alibaba's average valuation to reach $153 billion in a report by Bloomberg on February 5.

Zhang Yi, CEO of Shenzhen-based market research firm iiMedia Research, noted that the company needs to get listed as soon as possible otherwise it may suffer lower valuation, given that the company faces increasingly strong challenges from Tencent, operator of the country's popular instant messaging mobile app WeChat.

The two companies have engaged in a tight competition for the top position in mobile Internet. While Alibaba acquired an 18 percent stake in China's Twitter-like Sina Weibo last April to complement its shortcomings in social networking, Tencent announced it would buy a 15 percent stake in JD in early March this year to strengthen its capacity in e-commerce operation.

Liu also has an optimistic attitude toward the prospect of Alibaba's US IPO due to Alibaba's active deployment in mobile Internet as well as Internet financing products.

Besides, US investors have started regaining an appetite for Chinese dotcoms since last year after a series of auditing scandals and short-selling in 2011 damaged the reputation of Chinese firms, Zhang told the Global Times on Sunday.

For instance, Qunar doubled the initial value in its US debut in November 2013. It raised $167 million at $15 each, higher than the expected range of $12 to $14 for the IPO in the NASDAQ.

Analysts believes that the IPOs of online marketplace 58.com Inc and travel-booking site Qunar in the second half of 2013 opened the door for another round of US stock offerings by Chinese Internet companies.

According to media reports, in 2013 China's IPOs raised nearly $1 billion on the Wall Street, five times higher than the figure in 2012 but still lower than 2010's over $4 billion.