China Stocks: Buying for the future US hedge funds are buying up Chinese stoc...
JD.com is a Chinese internet commerce and e-commerce company headquartered in Beijing. It is one of the largest B2C merchants on the Chinese Internet in terms of transaction volume. The company has 17 million sq. meters of warehouse and logistics facilities. At the end of 2019, JD.com had over 220,000 employees. The company is actively pursuing mergers and acquisitions. So in 2017, the company invested almost $ 400M in online luxury clothing store Farfetch.
In the field of cloud technology, JD.com ranks fourth in China, behind only Alibaba Group, Tencent and Baidu.
Q3 revenue: $ 25.7B (+ 29.2% YoY)
Q3 Operating Income: $ 645M (-12% YoY)
Q3 net income: $ 1.1B (+ 1280% YoY)
Earnings per share last quarter: $ 0.53, above $ 0.41 forecast
The current crisis did not prevent the company’s high growth rates, and even improved the company’s position in the market.
Distribution of revenue by business segment:
JD Retail – 95.73%
New businesses – 4.15%
Unallocated items – 0.20%
Inter-segment – (0.08%)
JD.com is a young and fast growing company. Therefore, the company does not pay dividends – it is much more profitable to invest money back into the company for development. Despite localized services at the moment, the company can potentially enter not only the Asian markets.
But one should be wary of US policy towards China. Of course, after Trump’s departure from the presidency, relations between these two countries may change. However, so far, the tension still remains.
Thus, JD.com is relatively young with a lot of potential. But, despite this, there are still risks of investing in its shares. Such as a possible market correction and tensions between the US and China.
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