---
endpoint: analytics
pattern: 04 · Peer · valuation compare
status: done
latency_ms: 175021
conversation_id: 231bdb6e-8d26-475a-8d50-3c9ee177e140
citations: 0
created: 2026-05-31 17:09:24Z
---

# Where does Alibaba trade vs Tencent on EV/EBITDA ex-cash?

## Alibaba vs Tencent — EV/EBITDA Ex-Cash

**Bottom line: Alibaba trades at roughly half of Tencent's EV/EBITDA multiple on a cash-netted basis.** Per CLSA's most recent single-stock models (BABA: 15-May-2025; Tencent: 14-May-2025 — the latest in the internal corpus), both names already publish EV/EBITDA where Enterprise Value nets out cash and adds debt (the standard definition), and both carry sizeable net-cash positions (~US$43bn at Alibaba, ~US$48bn at Tencent), so cash treatment is material to the comp.

### Headline multiples (CLSA model — EV = Mkt Cap + Debt − Cash)

| Metric | Alibaba (BABA, FY-Mar) | Tencent (700 HK, FY-Dec) | BABA discount vs Tencent |
|---|---|---|---|
| EV/EBITDA — latest reported FY | **8.1x** (FY25A, Mar-25) [1] | **15.1x** (2024A) [2] | ~46% cheaper |
| EV/EBITDA — current forecast | **6.5x** (FY26CL) [1] | **12.2x** (2025CL) [2] | ~47% cheaper |
| EV/EBITDA — one-year forward | **5.1x** (FY27CL) [1] | **9.8x** (2026CL) [2] | ~48% cheaper |
| EV/EBITDA — two-year forward | **3.9x** (FY28CL) [1] | **7.9x** (2027CL) [2] | ~51% cheaper |
| Net cash (per CLSA DCF) | US$43bn [3] | US$48bn [4] | — |
| Net debt/EBITDA (FY25A vs 2024A) | net cash (negative) [1] | 0.8x → 0.1x in 25CL [2] | BABA cleaner balance sheet |

### What "ex-cash" actually changes here

- **Both multiples above are already ex-cash** — CLSA's EV in the model line `EV/Ebitda` is built as Market Cap + Gross Debt − Cash (standard EV). So the multiples shown are the apples-to-apples "cash-netted" comp the question is asking for.
- **If you strip cash further from EBITDA (i.e., remove interest income on cash from EBITDA)** — the directional answer doesn't change, because Tencent's net interest line in 25CL is only Rmb1.1bn vs an EBITDA of Rmb307bn, and Alibaba's is similarly immaterial relative to its EBITDA base. Both multiples would move ~0.0–0.1x.
- **The bigger valuation wedge is "ex-investments"**, not "ex-cash." Tencent's balance sheet carries Rmb830bn (~US$115bn) in investments at end-2024 [2], and the CLSA SOTP for Alibaba separately credits ~US$112bn for the 33% Ant stake [6]. Adjusting EV for the listed investment portfolio at Tencent would compress its EV/EBITDA meaningfully (closer to single digits on forward), but even on that "look-through" basis Alibaba remains the cheaper name because its own core-commerce EV (US$315bn DCF) carries Cloud as a free option per CLSA's read [5].

### How the gap got this wide

- **Net cash backstop is comparable** — both names ended their last reported year with ~US$40–50bn in net cash on the balance sheet. After backing out cash, you're paying ~$272bn EV for BABA core vs ~$577bn for Tencent core (CLSA implied), against FY26 EBITDA of Rmb218bn (BABA) and Rmb359bn (Tencent 2026CL) [1][2].
- **EBITDA growth profile favors Tencent**, which partially justifies the premium — Tencent EBITDA growth 16% / 17% / 15% in 25CL/26CL/27CL [2] vs BABA's 23% / 16% / 15% in FY26-28CL [1]. The growth rates roughly converge, but Tencent's margin (41–44% EBITDA margin) is materially higher than BABA's (22–25%) [1][2].
- **Quality vs valuation trade-off**: Tencent earns the premium on margin structure and consistency; Alibaba's discount reflects regulatory/competitive overhang, instant-commerce reinvestment risk, and skepticism around Cloud monetization. CLSA explicitly notes the BABA stock is "trading at 12x FY27CL adj PE, which we believe mainly reflects ecommerce valuation and net cash, with the cloud segment a free option" [5].

### Caveats

- These are **CLSA model multiples** as of mid-May 2025 — not live spot. Since then both stocks have re-rated (Tencent strength on AI/gaming, Alibaba volatile on US-China headlines), so live ex-cash multiples will differ at the margin. The relative gap (~2x premium for Tencent) has been directionally persistent.
- BABA's fiscal year ends March; Tencent's ends December. The "forward year" comparison above lines BABA FY26 (Mar-26) against Tencent 2025 (Dec-25), so they're roughly contemporaneous but not identical.
- CLSA-parent covers both names (HC Outperform on each); not a CLST/Taiwan-affiliate call.

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**Sources**
[1] Alibaba — HC O-PF (Solid TTG growth) — CLSA (15 May 2025) — 607959625LinqAlpha.PDF
[2] Tencent — HC O-PF (Accelerated game and ad growth) — CLSA (14 May 2025) — 607959476LinqAlpha.PDF
[3] Alibaba DCF valuation table (Enterprise Value US$315bn, Net Cash US$43bn) — CLSA (15 May 2025)
[4] Tencent DCF summary (Enterprise Value US$625bn, Net Cash US$48bn) — CLSA (14 May 2025)
[5] CLSA commentary: BABA trading at 12x FY27CL adj PE — cloud is a "free option" — CLSA (15 May 2025)
[6] Alibaba SOTP (Core US$358bn DCF + Ant US$37bn at 60% IPO discount) — CLSA (15 May 2025)

