The continued growth of online shopping in China and globally presents a vast market for JD.com to capture. Expanding its product categories and reaching untapped customer segments are potential avenues for growth. JD.com’s investment in advanced technologies, including AI and big data, also opens doors for further innovation in customer experience and supply chain management. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in.
- Ochama stores also serve as a showcase of JD’s technological prowess.
- Moreover, JD’s partner, Dada Nexus (DADA), revealed accounting inaccuracies.
- Those headline numbers looked solid, but JD’s stock plunged 11% after the report and remains 60% below its all-time high from February 2021.
- All this should translate into better revenues for JD.com because these initiatives should attract even more merchants to JD.com.
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That will give Tencent less of an incentive to partner with JD.com — and perhaps drive it to compete more aggressively in areas where the two companies overlap. JD.com’s stock was trading at $28.89 at the start of the year. Since then, JD shares have decreased by 8.3% and is now trading at $26.50. Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects https://www.day-trading.info/eurobonds-dual-currency-bonds-floating-rate-notes/ the stocks you care about. JD shares also appear to be moving higher alongside several Chinese names following reports suggesting China’s central bank has agreed to continue to ramp up financial support for enterprises to help support the economy. The report indicates JD’s founder Richard Liu recently called for changes at JD in response to internal issues at the company flagged by an employee post.
American depositary receipts (ADRs) of Chinese e-commerce retailer JD.com (JD) jumped over 16% in early trading Wednesday after the company reported fourth quarter sales that beat estimates. The key factors that will impact JD.com’s performance in the future are its ability to gain market share, thus attracting new users, and reducing its costs. The revenue rise was not impressive for a growing high-tech company, mostly due to the fact that other market players, Pinduoduo (PDD) and DouYu (DOYU), are winning bigger market shares.
Is JD Stock Overvalued? JD Stock Key Metrics
On the bottom line, the company per-share profit jumped by 51.5% to $0.74, ahead of the consensus at $0.66. China stopped releasing a key data point on youth unemployment, sparking concerns that the situation was worse than it appeared. Meanwhile, industrial output and investment were weaker than expected and aggregate demand also declined. However, quarterly results do not allow investors to see the whole picture.
The payment date is expected to be on or around April 23, 2024, and on or around April 29, 2024, for holders of ordinary shares and holders of ADSs, respectively. Under this program, JD may buy back up to $3.0 billion worth of its ordinary shares and ADSs over the next 36 months through March 2027. The buybacks would likely support the company’s valuations throughout the period.
It operates an integrated model that allows the company to control the whole user experience. Most of its revenues are from selling products directly to consumers. The https://www.topforexnews.org/investing/investing-in-the-future-of-food/ company tries to sell a wide range of goods at low prices and sends them to customers. Therefore, JD looks reasonably valued — but not cheap — relative to its peers.
Apart from AMZN, JD has outperformed the major international e-commerce stocks in the past year. Shopify Inc., Etsy Inc. (ETSY), Sea Limited (SE), and MercadoLibre Inc. (MELI) have seen their share prices decline 29.4 percent to 45.1 percent in the past year while JD is down 27.3 percent. As mentioned early on, following the share distribution, Tencent would be left with a 2.3 percent stake in JD, down from 17 percent.
British retailer Currys drops 5% as China’s JD.com walks away from takeover race
Currys shares soared on Monday after Chinese online retailer JD.com joined U.S. activist investor Elliott Advisors in a battle to buy the British home appliance and electronics retailer, which has alr… But it is also essential to view this earnings report in the context of JD’s quarterly and annual earnings results. Earlier this month, JD.com reported its full-year 2023 and 4Q 2023 earnings results.
However, it is best to invest in an asset class, in this case, the Chinese stock market, when it is trading quite low. Due to the fact that the Chinese economy is not growing as fast as it used to, China’s central bank is hinting at monetary easing ahead. This will improve the prospects of the stock market and make many companies’ shares rise. JD’s net income reached a record high in 2020 during the coronavirus pandemic.
Should I Buy JD.com Stock? JD Pros and Cons Explained
I personally wouldn’t buy JD until its growth either stabilizes or accelerates again. If I had to pick a Chinese e-commerce stock right now, I’d definitely buy Pinduoduo for its stronger growth rates instead of JD. Alibaba, which is expected to grow much slower than JD in fiscal 2024 (which starts at the end of March), trades at 13 times next year’s earnings. Pinduoduo, which is growing faster than JD and Alibaba, trades at 26 times forward earnings. It also plans to invest $1.5 billion in a new subsidiary that will focus on selling cheaper products — which suggests it’s struggling to keep pace with Pinduoduo in China’s lower-end market. However, China’s entire e-commerce sector could still heat up again this year as China ends its zero-COVID policies and the macro environment stabilizes.
At the same time, JD.com’s stock price fell from the $64.85 it used to trade for on July 1, 2022, when the article was published, to $27.85 as of the time of writing. BABA stock price, meanwhile, only decreased from $116 to $75 per share as of the time of writing. So, the stock price decline only totaled about 35%, or a third. The question remains if JD shares have reached their bottom and if they have a bright future right now. However, JD’s first-party marketplace takes on its own inventories and operates at much lower margins than Alibaba and Pinduoduo, which don’t take on any inventories for their third-party marketplaces. JD offsets some of that pressure by providing its own logistics services, which were expanded by years of big investments, to external customers.
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As Chinese companies navigate the more stringent regulatory environment and demonstrate their commitment to Beijing’s ‘common prosperity’ drive, it helps to have ample cash on hand. JD’s net cash, measured by its net financial debt, is at $26.4 billion as of the last reported quarter (Q3 2021), its highest ever. To provide another perspective, JD’s net cash has reached 23.5% of its market capitalization. When it comes to Chinese e-commerce stocks, Alibaba, Pinduoduo, and JD are the top three names. For investors preferring to have a pure-play on digital shopping, PDD and JD are the dominant choices. The former, however, relies heavily on third-party logistics companies to handle shipping while the latter has long invested in its delivery fleet.
JD does not only have to pay for operating logistics and delivery services. So, it is challenging to make a profit under these conditions. As I have mentioned earlier in this how to start a currency trading business truic article, JD’s rivals PDD and Douying are winning greater market shares. PDD sets very low pricing, while Douying is quickly growing its live-streaming e-commerce business.