Alibaba shares hit high after market valuation beats Walmart

Alibaba, the Chinese ecommerce behemoth that listed in New York last month, has muscled ahead of Walmart by one important measure: its market valuation now exceeds that of the world's largest retailer by revenues.

Shares of Jack Ma’s Hangzhou-based group climbed as much as 2.8 per cent to touch a new record high of $100.50 yesterday, lifting its market capitalisation above $247 billion (€194 billion).

At that level, Alibaba is just $2billion short of the list of the world's 10 most valuable companies, within reach of Swiss pharmaceutical groups Roche and Novartis. Alibaba would have reshuffled the coveted top 10 had it not been for better than expected third-quarter results from Novartis.

Walmart, with 11,000 stores in 27 countries including China, reported revenues of $473 billion for its past financial year, compared with the $8.6 billion Alibaba collected from its online marketplaces.

The gains yesterday follow comments from Mr Ma, the company's founder and executive chairman, who told a conference on Monday evening that he was interested in working with Apple on financial payments.

Alibaba floated in New York on September 19th, the day that remains the peak for US equity markets and preceded a near correction in the benchmark S&P 500 index. Its shares, which were priced at $68 apiece, rallied 38 per cent on their debut day, as underwriters took hours trying to match orders amid heavy demand. Alibaba eventually opened for trading on the New York Stock Exchange at $92.70 and touched a brief high of $99.70.

Over the past two weeks, several Wall Street analysts have unveiled their targets and ratings for Alibaba, showing it has had a warm reception, with more than three-quarters of brokerages recommending the stock as a “buy”.

Revenues are expected to reach Rmb130.5 billion ($21.3bn) in 2017, a 149 per cent rise from fiscal 2014 levels, according to analyst forecasts collected by Bloomberg. In contrast, Walmart‘s sales are projected to climb 7 per cent over a similar period to $522 billion.

(c) 2014 The Financial Times Limited