Further escalations in geopolitics seem improbable since it would be a dire strategic mistake, especially for China to engage in such behavior, given its current state. Taiwan isn’t a problem today, and US-China tensions should remain in the realm of the sane because both need each other one way or the other to prosper. Minor poking is warranted, but that doesn’t change the thesis for this particular company. Should the geopolitics escalate significantly, it will send every stock market into gushing red along with “Magnificent Seven” -stocks, and that’s the ultimate bear scenario. The real estate sector is facing a significant battle, and this is a dent in the overall Chinese GDP growth. Kick-starting the economy from the COVID shutdowns with the real estate crisis causes the current deflationary pressures.
On Friday, the Federal Aviation Administration announced a plan to increase oversight of the production of that class of plane, which has been grounded by the regulator. On Monday, Boeing said it plans to expand quality inspections on the airplane, Reuters reported. “When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,” he added. “In many previous cycles … the cut rates reactively and did so quickly and often by large amounts. This cycle, however, … I see no reason to move as quickly or cut as rapidly as in the past.” Advanced Micro Devices helped pull the sector into positive territory with a rally of more than 7%. Western Digital was the next biggest gain with a 4% advance, followed by Cadence Design Systems at 3% higher.
The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Alibaba’s news that it won’t spin off its cloud unit due to expanded U.S. export controls on chips is hurting shares. Chinese billionaire Richard Liu has acknowledged a litany of problems besieging his JD.com as the e-commerce company keeps ceding ground to a once-small rival, vowing to change and address the lack of… The People’s Bank of China offered commercial lenders a net 800 billion yuan ($112 billion) in one-year loans Friday—a record cash injection into the banking system through its one-year policy. Latest economic figures from Beijing were a disappointment and the outlook this year doesn’t look much better. We’d like to share more about how we work and what drives our day-to-day business.
- That’s followed by “much stronger’ returns over the rest of the year, which including a summer rally between June and August and a post-election relief rally in November and December.
- Worth mentioning is that JD traded at that $50 per share level less than eight months ago, while it has taken significant steps to improve its profitability, and the Chinese economy has most likely experienced a bottom.
- Today, the company received yet another negative news item, as a Wall Street bank lowered its price target on shares, along with the company’s revenue-growth outlook.
- This suggests that any new laws or regulations governing data collection & usage in China will not have a major impact on JD.com’s overall sales.
With the valuation reset in many tech stocks in the past months, the correction in JD now appears relatively tepid. Thus, it is a tough call to say JD is a better buy over the other battered tech stocks. Through the partnership, JD will benefit from greater utilization of its logistics infrastructure. The press release suggests JD’s global-reach supply chain network will provide the end-to-end fulfillment service from the US to China, leveraging its China-US cargo flights as well as over 1,300 warehouses in the U.S. and China.
NASDAQ: JD
In my view, this crisis doesn’t drastically affect the consumption of the average citizen. They still want to purchase the majority of what JD offers, and sooner or later, the real estate crisis will solve itself. Walmart established a relationship with JD.com in 2016 and owns a 9.8% stake in the company.
JD.com, Inc. (JD)
Hence, I reckon it is more fruitful to compare JD to itself over the past years. JD’s price-to-earnings ratio on a forward basis is presently 32.2 times, the lowest it has been since the second quarter of 2020 and more than half that of the peak achieved in February 2021. Chinese blue-chip stocks have fallen to a five-year low after Moody’s cut the Chinese government’s credit outlook rating. Yahoo Finance’s Jared Blikre joins the Live show to share his observations on …
AMD is also a designer of central processing units (CPUs) and is aiming to continue taking market share away from Intel in PCs and servers. Analysts polled by LSEG expected a profit of $3.51 per share, but it wasn’t clear if that estimate was comparable. The New York-based bank reported fourth-quarter revenue that surpassed expectations, but its results were hit by regulatory charges and its new CEO Ted Pick issued warnings about geopolitical risks and the U.S. economy. Even if the revenue growth stagnates at the current 6.8% YoY, the stock has a tremendous financial margin of safety according to my analysis. That’s one of the worst and somewhat probable scenarios that can happen, and even that doesn’t sound so bad considering the prevailing situation.
A mixed earnings report and weakness in China pushed the e-commerce stock lower last month.
The company’s share price was up 11% from the previous week’s market close heading into this Friday’s trading, according to data from S&P Global Market Intelligence. Goldman Sachs reported fourth-quarter earnings and revenue that beat analyst expectations thanks to a strong performance from the bank’s asset management results. Many Chinese stocks sold off as China cracked down on its listed https://broker-review.org/ companies. While the latest crackdown targeted companies in the
education sector, most of the other listed Chinese equities felt the pressure as the investment sentiment deteriorated. ARK Invest’s Cathie Wood also sold some of her positions in these names, including JD.com. After the recent sell-off, investors wonder if JD.com will go back up and what its forecast looks like for 2025.
Is it the right time to buy JD?
Overall, the revenues continue to experience headwinds and can be sluggish for the next few quarters. JD Retail experienced a 5% increase in revenues compared to a quarter a year earlier, and Logistics revenues were up 31%, a bright spot in the segment. One says a bull market is confirmed when a major index like the S&P 500 climbs 20 percent above its most recent low. By that standard, the bull market was confirmed in June, when the S&P 500 closed 20 percent above its October 2022 low. It doesn’t mean stocks will continue to rise indefinitely, but it does reflect a generally optimistic outlook on Wall Street.
JD.com Earnings Could Boost the China Bull Case
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing vintage fx solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. For those unacquainted, JD.com is a Chinese e-commerce company headquartered in Beijing.
On one hand, I like the fact that JD has managed to strike a delicate balance between maintaining profitability and driving future growth with new investments. On the other hand, future unexpected regulatory events could still have a negative effect on JD.com’s financial performance and stock price. While JD.com’s consolidated subsidiary Dada Nexus, or Dada, overstated an estimated CNY 500 million in revenue and CNY 500 million in costs in the first three quarters of 2023, we think this has minimal earnings impact on JD.com. The overstatement represents 6.1% of Dada’s total revenue but only 0.06% of JD.com’s revenue in the same period. While this speaks to greater corporate governance concerns, we think the recent management changes at Dada and new management with affiliation to JD.com will help to strengthen corporate governance.
As mentioned earlier, JD’s annual active customer accounts was only slightly over half a billion as of June 30, 2021. 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 future user growth is likely to be driven by its further expansion into new product categories and lower-tier cities in China. In summary, JD.com would have been worth investing in as a business, if the company had limited exposure to regulatory & policy risks which is unfortunately not the case.
Separately, China is also placing a greater emphasis on data security, as evidenced by the recent cybersecurity review that newly-listed ride-hailing firm DiDi Global (DIDI) was subject to. Many of the Chinese technology firms are quite reliant on revenue from advertising which involves the extensive collection & analysis of user data. In contrast, JD only derived 7% of its Q revenue from marketplace & marketing services. This suggests that any new laws or regulations governing data collection & usage in China will not have a major impact on JD.com’s overall sales. The Motley Fool has positions in and recommends JD.com and Jefferies Financial Group. Instead of the 12 months typically required for international brands to begin selling in China, JD’s streamlined channel will allow Shopify brands to do so in 3-4 weeks.
Additionally, China’s population fell for the second year in a row, showing that efforts to support population growth and new families have fallen flat. Sign-up to receive the latest news and ratings for JD.com and its competitors with MarketBeat’s FREE daily newsletter.
