JD.com China | Information Technology

JD.com is the largest online direct sales company in terms of transaction volumes and second only to Alibaba in ecommerce in China. With self-owned logistics facilities in the major Tier 1 & 2 cities, JD prides itself on its commitment to delivering the best ecommerce experience with both product authenticity and fast delivery times.




Investment thesis


JD is a major player in the new economy of China. As the largest online direct sales company, JD is positioned to benefit from the rise of ecommerce and the longer term shift in the Chinese economy from investment-led to consumption-driven.


JD remains a key player in China's new economy and we continue to expect the company to enjoy operating leverage from its investments in logistics. Overall, we expect a non-GAAP net margin of 0.2% for 2018 and 0.9% for 2019. While valuations are attractive we highlight that sentiment could remain weak. We see potential catalyst from a) improving profitability at results, b) improving/stabilizing China macro data, c) additional information on how management plans to monetize its logistics assets in China, d) clarity on the outcome of the US investigations on JD‘s

founder.



Positive positioning for the Chinese consumer


- GMV growth could be better than we expected with increasing consumption in China

- Improvements in brand/user engagement could result higher than expected monetization rates

- Better than expected operating leverage could drive earnings to grow faster than we anticipate






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