A Chinese court has sided with online giant JD.com in a long running antimonopoly case against its rival Alibaba, the company announced on Friday, years after Beijing launched a tough regulatory crack… 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. 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. 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.
- JD.com (JD) stock is rising Thursday morning following plans to hike employee salaries in 2024, according to Bloomberg.
- On the bright side, JD Retail’s adjusted operating margin still rose 60 basis points to 3.7% for the full year as it reined in its spending and streamlined its business.
- Notably, JD.com has already added 60 million new active customer accounts in the first half of this year, implying that it is on track to meet its full-year target.
- JD’s top line rose by +26% YoY from RMB201 billion in Q to RMB254 billion in Q2 2021, and that was +2% higher than the sell-side analysts’ quarterly revenue forecast based on S&P Capital IQ data.
In a nutshell, JD continues to deliver robust top line growth, and its key operating metrics such as active customer account growth and the increase in order volume have been impressive. At the same time, JD.com seemed to have maintained a good balance between preserving current profitability and investing in future growth. Therefore, I choose to maintain my Neutral rating td ameritrade forex review on JD.com, as there is little certainty with regards to the company’s profitability in five years’ time. Still, the Jefferies’ analysts commentary may have harmed sentiment for the stock, as it did have to do with fundamentals. The analysts now think JD.com’s core retail business will only see flattish year-over-year revenue growth in the recently completed quarter.
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However, when we look at the price-to-book value, the ratio is now around 3.2 times. This is near to the trough levels in July 2021 when the Chinese government announced that the after-school tutoring industry must become non-profit, as well as in November 2018 at the height of the U.S.-China trade tensions. At the same time, JD’s book value has risen over the years and it more than doubled https://broker-review.org/ from two years ago. JD’s market cap has also climbed steadily from late 2018 to early 2021, quadrupling in that period. That cash build is supported by JD’s improving free cash flow which has climbed to $6.3 billion in the third quarter of 2021. On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
JD.com MarketRank™ Stock Analysis
The consensus rating by Wall Street analysts is ‘Strong Buy’, the same for the quant rating for JD. Unless circumstances start to improve broadly, Chinese consumer-facing companies may start to feel significant pressure. As such, investors should approach JD stock with vigilance and caution moving forward. Chinese stocks face pressure Friday over the nation’s economic woes and slowing GDP growth. Yahoo Finance Markets Reporter Jared Blikre analyzes the drivers behind weaknesses in publicly traded Chines… Chinese consumer prices fell 0.5% from a year earlier in November, while economists expected a drop of 0.2%.
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For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. And, you’ll also discover if the current stock market trend is conducive to buying stocks, or if it’s an environment where you want to take defensive action and sell. The wave of antitrust and regulatory actions by China now underway initially emerged in November 2020. That’s when China halted the planned initial public offering of Ant Group, a financial technology giant spun off from Alibaba. In other words, regulatory & policy factors represent the most significant downside risks to JD’s profitability improvement in the coming years. Furthermore, corporate social responsibility is becoming increasingly important for companies operating in China.
TSMC published its fourth-quarter results yesterday and delivered encouraging signals. While the company’s Q4 revenue was essentially flat compared to the prior-year period, it came in higher than expected. Sales are trending toward accelerating again, and artificial intelligence (AI) is playing a key role in driving the positive momentum. The bank posted fourth-quarter results that topped analysts’ expectations on better-than-expected asset and wealth management revenue. Goldman Sachs reported better-than-expected profit and revenue, while Morgan Stanley posted a revenue beat in the fourth quarter.
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The dollar index reached its most expensive level in about one month on Tuesday morning. Manufacturing activity in the New York region collapsed to its lowest level since the early days of the Covid pandemic, the New York Federal Reserve reported Tuesday. Boeing planes were also reportedly involved in minor incidents in Chicago and Japan over the weekend, though it is not clear if the manufacturer was at fault in those events. Wells Fargo downgraded Boeing to equal weight from overweight on Tuesday, warning that the FAA audit could uncover more quality problems for the company. The decline appears to stem at least in part from the continued fallout from a Max plane that lost a door in flight.
While no shareholders would be proud to say the stock they owned lost one-fifth of its value in a year, it’s a consolation considering other Chinese e-commerce stocks lost much more. American depositary receipts (ADRs) of JD.com advanced over 7% in early trading Wednesday after the Chinese e-commerce firm posted better-than-expected results as it attracted customers with lower pri… Amid President Xi Jinping’s visit to the U.S., two major Chinese firms saw exciting earnings beats. Both Tencent (TCEHY) and JD.com (JD) reported Q3 financial results that beat analysts’ expectations. The new everyday low-price strategy, reorganization, and restructuring of the first-party business in 2022 will lead to weak growth in the medium term.
Nevertheless, as discussed in the earlier sections, JD’s valuation is attractive relative to its historical range and the company has several exciting endeavors that could propel revenue growth in the coming quarters and years. With Walmart as the largest corporate shareholder of JD, we can expect the American retail giant to help shield JD from negative U.S. policies. The overall quant rating is not an average of the factor grades listed. Rather the metrics with the strongest predictive value have a greater weight. Also, we should note that JD has its factor grade for revisions upgraded from D to A, a substantial jump in six months, and despite ongoing regulatory headwinds facing Chinese internet stocks. This suggests that analysts could have been too pessimistic previously about the impact of the challenges facing JD on its business prospects.
However, prior to JD’s 2Q 2021 earnings announcement in late-August, the company’s stock price fell by -18% from $75.91 as of July 22, 2021 to $62.19 as of August 19, 2021 which represented a new one-year share price low. This came about as new regulations and policies in China caught investors’ attention, starting with the ban on private tutoring services in the country in late-July. The market is concerned that market leaders in key sectors in China will come under intense scrutiny of the country’s regulators and policy makers. It is noteworthy that JD is the largest company in China’s retail market, with its revenue almost three times that of its closest competitor.
Alibaba has plenty of good things going on, and the risks that apply to Alibaba also apply to PDD. Yet one has been selling off and trading sideways, while the other has skyrocketed. I think this situation is also applicable to Soros’ self-reinforcing theory. Alibaba stock has a constant negative sentiment around it because it’s synonymous with China and the history of the stock prices driving off the cliff. For Westerners in particular, Alibaba is this distant speculative company that doesn’t really affect their daily lives and is easy to dismiss. PDD doesn’t have the same negative sentiment around it because it made a touchdown at the latest Super Bowl, becoming very real for many Americans and Westerners.
However, that same analyst also has a price target well above where shares trade today even after the downgrade. Among the 14 analysts covering the stock, 11 have a buy, two have a hold, and one has a sell rating on the stock. Analysts’ average consensus target price of $102 implies a potential upside of 64 percent. However, most of the current target prices were issued by analysts before the current crackdown started. JD.com set a goal of having a net profit margin in the mid-to-high single digit range in the long term at its June 2021 Investor Day, as compared to its Q non-GAAP net margin of 1.8%.
The China-based e-commerce giant turned in stronger-than-expected revenue growth last quarter and e-commerce sales growth is expected to improve gradually throughout 2024. Multiple factors, including financial performance, market sentiment, and overall economic conditions, have influenced JD.com’s recent stock performance. Positive earnings reports and strategic announcements have typically led to stock price appreciation, whereas unexpected challenges or external factors may result in short-term fluctuations.