Media reports indicate that Alibaba is preparing to advance the separate listing of its chip business &#34;Pingtouge,&#34; and JP Morgan is surprised by the &#34;timing of the report.&#34;
According to news from the trading desk, on January 23, the team led by Yao Cheng, head of JP Morgan's China Securities Research, published a research report estimating that the potential valuation of &#34;Pingtouge&#34; could range from $25 billion to $62 billion, accounting for approximately 6% to 14% of Alibaba's current market value.
However, the report clearly states that this figure is highly dependent on the actual future business scale, competitiveness, and the final transaction structure.
Analysts believe that the current market is more focused on verifying whether Alibaba Cloud and its core AI business can solidly deliver results. The company's choice to restart the &#34;value release&#34; narrative seems more like a strategic communication posture, attempting to showcase asset value.
<h2>How is the $25-62 billion calculated?</h2>
Regarding the potential valuation of &#34;Pingtouge,&#34; JP Morgan provided a broad range: $25 billion to $62 billion, which accounts for approximately 6% to 14% of Alibaba's current market value.
The report emphasizes that this is a demonstrative estimate of &#34;option value,&#34; derived from aggressive revenue replacement indicators for 2026, and a rough comparison with domestic peers such as Kunlun Chip and Cambricon.
This range is highly sensitive to three factors: What assets are actually sold externally, how competitive they are compared to domestic and foreign alternatives, and how the final transaction structure is designed.
In other words, this figure is more about answering &#34;If Pingtouge becomes a separately valued asset, how much would the market pay?&#34; rather than being based on a complete modeling of the chip business fundamentals.
The research report admits that due to limited disclosures, they &#34;intentionally simplified the framework.&#34;
<h2>Surprised by the &#34;timing of the report&#34;</h2>
JP Morgan is surprised by Alibaba's decision to release this &#34;value release&#34; signal to the market at this time.
The report points out that the core narrative and attention of the current market are closely tracking whether Alibaba's &#34;Cloud + Generative AI&#34; core business can realize a turning point in monetization. Investors are most concerned about whether Alibaba Cloud's revenue can accelerate growth in the coming quarters.
In contrast, &#34;Pingtouge&#34; remains a business primarily generating revenue from Alibaba internally, with uncertain external commercialization paths. The research report emphasizes the need to focus on several important data points:
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Formal restructuring steps;
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Financial data or departmental economic benefits of Pingtouge Semiconductor;
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More data on external mass production introduction;
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And signals regarding the proposed listing location/time.
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</ul>
</blockquote>
Without these signs, JP Morgan expects the initial excitement to fade.
<h2>Short-term sentiment, long-term strategy</h2>
JP Morgan assesses that even if the news about &#34;Pingtouge&#34; serves as a short-term sentiment catalyst, the market excitement it generates may be difficult to sustain, ultimately returning to Alibaba's fundamentals.
Analysts are optimistic about Alibaba's trading performance over the next 6-12 months, believing the company can weather short-term profit pressures, and expect Alibaba Cloud's revenue to accelerate growth in the coming quarters.
The research report points out that the upward potential of AI-driven cloud business and the strategic optionality of the entire platform will outweigh the profit pressures brought by the company's short-term investments in local living and user acquisition
In simple terms, they believe that the story of Alibaba Cloud is more worthy of attention than the current costs.
In summary, JP Morgan believes that investors should focus on Alibaba's core integration process of cloud and AI, as well as the tangible evidence of its revenue growth.
As for the capital story of &#34;Pingtouge,&#34; it should be regarded as an unclear &#34;additional option&#34; until it truly gains independence and approaches the door of listing

JP Morgan estimates that the potential valuation of "Pingtouge" is between 25 billion to 62 billion USD, but emphasizes that this is only a rough benchmark calculation. Analysts believe that in the absence of key information such as financial data and external customers, the current market should focus on the actual monetization capabilities of Alibaba Cloud and AI business, rather than the "value release" narrative

- Morgan Stanley reports Alibaba is preparing to spin off its chip business, "Pingtouge," with a potential valuation between $25 billion and $62 billion, comprising 6% to 14% of Alibaba's market value.  
- The report emphasizes that this valuation is highly dependent on the actual business scale, competitiveness, and transaction structure, and the timing of this market signal surprised analysts.  
- Analysts advise focusing on Alibaba's core cloud and AI integration process and tangible revenue growth, viewing "Pingtouge" as an ambiguous potential asset until it achieves independence.

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"Ping Tou Ge" to be listed separately? JP Morgan: Surprised by the "timing of the report," valuation may account for 6-14% of Alibaba's market value