I was shown an article by APS’ Mr Wong on JD.com as a bubble in making. This contradicts to my previous findings on my investment thesis. I went back to research on JD.com. I was combing the internet for all the developments of JD.com when I chance upon this website. The author provides a very in-depth research on JD.com and Amazon.
- China’s 2nd largest eCommerce company reported profit in third quarter. JD.com posted net earnings of 1 billion yuan, its highest profit in the three months to Sept. 30.
- JD.com expects revenue for the quarter ending in December to be 107-110 billion yuan which equates to a rise of 35-39 percent. The marketing campaign in November will affect the bottom line.
- JD.com is investing in logistics infrastructure in South East Asia, expanding in Indonesia.
- In China, JD.com is focusing on “white glove” platform focusing on imported food, fashion and electronics.
- Thesis for the company is eCommerce retailing is a logistics business, the lowest cost will win the race.
- JD.com differentiates from Alibaba in terms of its faster delivery times, authenticity quality products, and great customer service.
- JD.com has invested from the start on its logistics network in China whereas Alibaba is relying on partnership with 3rd party carriers (eg. China EMS).
- EV to Revenue ratio points towards undervaluation when compared to its competitors. EV to Revenue of JD is 1.29x, Amazon is 3.68x and Alibaba is 16.69x. This company serves the world’s largest population, loyal customer base, logistics advantage and industry tailwind.