Alibaba.com plans Hong Kong IPO

By Kennix Chim

HONG KONG (Reuters) - China's biggest e-commerce firm, Alibaba.com Ltd, plans to raise as much as US$1.32 billion after setting a price range for its Hong Kong initial public offering, sources familiar with the deal said on Monday.

Alibaba.com, founded in 1999 by Jack Ma in Hanzhou in eastern China, is offering 858.9 million shares, or 17 percent of its enlarged share capital, with a price range of HK$10-HK$12 each, the sources said.

Of the offered shares, 73.5 percent are to be sold by its parent company, and the rest are new shares.

The listing will not include Alibaba's consumer arm including the auction firm Taobao, online payments unit Alipay and Yahoo China.

The indicative price range represents a price-to-earnings multiple of 40 to 48 times the syndicate earnings forecast for 2008.

With Alibaba.com's customer base growing fast, Goldman Sachs expected the company to post a 629 million yuan (US$83.7 million) net profit in 2007, a 186 percent jump from last year. In 2008, it could reach a 1 billion yuan net profit.

By comparison, peers Baidu.com Inc trade at about 78.6 times 2008 forecast earnings, while Google Inc and eBay Inc trade at 31 times and 24 times 2008 forecast earnings. Trade media Global Sources Ltd trades at 31 times.

Hong Kong-listed Tencent Holdings Ltd trades at 50 times prospective earnings.