JDCMF - JD.com: Big Buyback Could Ramp Up Growth

2024-07-10 00:36:42 ET

Summary

• A few months ago, I covered JD.com stock, calling it a value (borderline deep value) play with potential.
• Since my last article published, JD stock has beaten the market.
• Despite the significant gains (about 21%), I'm actually more bullish on the stock now than I was then.
• I sold my JD shares on their last leg up, which took their value past $30. They have since given up some of those gains; I'd be comfortable holding JD today.
• In this article, I explain why I'm upgrading JD to strong buy.

JD.com ( JD ) (JDCMF) is China’s biggest e-Commerce company by revenue. Although Alibaba ( BABA ) does far more profit, JD holds inventory directly, resulting in slimmer margins. Still, JD’s massive revenue numbers make it one of China’s true eCommerce giants. It is relatively unique among Chinese eCommerce companies in having a strong focus on quality. Both AliExpress and TEMU have been criticized for a lack of quality in some products; JD is considered to have the best average product quality of all the Chinese eCommerce marketplaces. This quality control comes at a price, though: to ensure that all of its goods are legitimate and that the quality control is high, JD has to hold inventory on its own shelves, which results in lower margins than Alibaba or PDD can boast....

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