Author Topic: JD - JD.COM  (Read 11965 times)

hillfronter83

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Re: JD - JD.COM
« Reply #30 on: July 19, 2018, 12:10:18 PM »
An interesting article from New Yorker talking about JD and eCommerce in China.

https://www.newyorker.com/magazine/2018/07/23/how-e-commerce-is-transforming-rural-china


randallchsu

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Re: JD - JD.COM
« Reply #31 on: July 19, 2018, 06:21:31 PM »
iqiyi recently ran a promotion with JD.

For 89 rmb*, a buyer gets one year iqiyi gold vip and JD plus. And the buyer can purchase the promotion package twice, so that's two years of services for 178 rmb*. If the buyer already has JD plus and paid 178 rmb*, the plus membership will automatically extend for another 24 months.

iqiyi and JD are both likely to report skyrocketed membership level for this year.

*if the buyer purchased via cash-back sites, that's another 20% cash rebate
« Last Edit: July 19, 2018, 06:30:12 PM by randallchsu »

blainehodder

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Re: JD - JD.COM
« Reply #32 on: July 20, 2018, 12:03:24 PM »
I just don't get why this continually sells off. It trades sub 1x rev with massive growth and a massive runway.  Yes it is capital intensive but even with a tiny future margin they are worth min 2x the current mcap.  It can't all be explained away by trade/currency war fears.  Yes BABA is a huge competitor but JD is well financed and has the backing of Tencent and Walmart. It just doesn't make any sense to me. It doesn't look like a failing company, but it certainly trades like one.
« Last Edit: July 20, 2018, 12:09:43 PM by blainehodder »

lucasnascimento

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Re: JD - JD.COM
« Reply #33 on: July 20, 2018, 12:08:33 PM »
I just don't get why this continually sells off. It trades sub 1x rev with massive growth and a massive runway.  Yes it is capital intensive but even with a tiny future margin they are worth min 2x the current mcap.  It can't all be explained away by trade/currency war fears.  Yes BABA is a huge competitor but JD is well financed and has the backing of Tencent and Walmart. It just doesn't make any sense to me.

Me neither.

Liberty

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Re: JD - JD.COM
« Reply #34 on: July 20, 2018, 12:19:59 PM »
I just don't get why this continually sells off. It trades sub 1x rev with massive growth and a massive runway.  Yes it is capital intensive but even with a tiny future margin they are worth min 2x the current mcap.  It can't all be explained away by trade/currency war fears.  Yes BABA is a huge competitor but JD is well financed and has the backing of Tencent and Walmart. It just doesn't make any sense to me. It doesn't look like a failing company, but it certainly trades like one.

They are also backed by Google, with a recent investment of half a billion.

Shanghai's index is down about 20% year to date, so that certainly doesn't help.

Saw a rumor today that Hillhouse and Tiger Global sold out. No idea if true, but could explain some pressure on the price.

If you have conviction that it's worth a lot more than where it's trading at, it's an opportunity.
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winjitsu

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Re: JD - JD.COM
« Reply #35 on: July 20, 2018, 02:04:09 PM »
No position, but I'll happily play the other side.

I think people think JD is the next Amazon platform play where one subscription gets you access to videos music shopping etc but in China, JD is just for commerce and I'd argue Tencent is the real platform play (you use the wechat portal to access music, videos, shopping, use wechat currency etc.). Also China is slightly different because we see federation of companies teaming up, so the value is spread between the members of the federation and you can't have certain segments like AWS subsidize money losers like Video / Alexa etc like Amazon. Result is a weaker flywheel.

Walmart is dumb e-commerce money. If anything this is a contra-indicator.

Market will be winner takes all, Alibaba is winning in that regard. I ask my Chinese national friends where they do their online shopping -- majority use Alibaba over JD.

fareastwarriors

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Re: JD - JD.COM
« Reply #36 on: July 20, 2018, 07:43:14 PM »
No position, but I'll happily play the other side.

I think people think JD is the next Amazon platform play where one subscription gets you access to videos music shopping etc but in China, JD is just for commerce and I'd argue Tencent is the real platform play (you use the wechat portal to access music, videos, shopping, use wechat currency etc.). Also China is slightly different because we see federation of companies teaming up, so the value is spread between the members of the federation and you can't have certain segments like AWS subsidize money losers like Video / Alexa etc like Amazon. Result is a weaker flywheel.

Walmart is dumb e-commerce money. If anything this is a contra-indicator.

Market will be winner takes all, Alibaba is winning in that regard. I ask my Chinese national friends where they do their online shopping -- majority use Alibaba over JD.


This is pure speculation. Doesn't Tencent own like ~18% of JD? Any chance Tencent takes out JD to compete directly with Alibaba? One stop shop.

chrispy

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Re: JD - JD.COM
« Reply #37 on: July 22, 2018, 09:11:18 AM »
Yes, they own an amount right around there

petec

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Re: JD - JD.COM
« Reply #38 on: July 25, 2018, 02:52:00 AM »
I just don't get why this continually sells off. It trades sub 1x rev with massive growth and a massive runway.  Yes it is capital intensive but even with a tiny future margin they are worth min 2x the current mcap.  It can't all be explained away by trade/currency war fears.  Yes BABA is a huge competitor but JD is well financed and has the backing of Tencent and Walmart. It just doesn't make any sense to me. It doesn't look like a failing company, but it certainly trades like one.

I'm new to the name. Mind if I ask how you value it? I get that it's <1x sales but that alone doesn't necessarily mean much. You have to make a margin assumption. If you assumed 2% net margin on RBM600bn of sales you're still on 29x. Should margins, or sales, be much higher than that any time soon? Genuine question - I don't know, I'm just reading as much as I can. But it's not immediately obvious how it's worth "min 2x" from here.

blainehodder

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Re: JD - JD.COM
« Reply #39 on: July 25, 2018, 10:24:16 AM »
I just don't get why this continually sells off. It trades sub 1x rev with massive growth and a massive runway.  Yes it is capital intensive but even with a tiny future margin they are worth min 2x the current mcap.  It can't all be explained away by trade/currency war fears.  Yes BABA is a huge competitor but JD is well financed and has the backing of Tencent and Walmart. It just doesn't make any sense to me. It doesn't look like a failing company, but it certainly trades like one.

I'm new to the name. Mind if I ask how you value it? I get that it's <1x sales but that alone doesn't necessarily mean much. You have to make a margin assumption. If you assumed 2% net margin on RBM600bn of sales you're still on 29x. Should margins, or sales, be much higher than that any time soon? Genuine question - I don't know, I'm just reading as much as I can. But it's not immediately obvious how it's worth "min 2x" from here.


Margin expansion should happen in the next 3-4 years to 4%+ in my opinion. While GMV is about 1/3 to 1/4 of the closest comp, ad rev is 1/10th - Ad revenue growth will drive material margin expansion. Further logistics margin on rapidly increasing 3p sales will again drive expansion. Combined with the rapid revenue growth, it is highly likely JD is trading with a large discount. Your 29x becomes more like 14x  for a company with an endless growth opportunity and revenue growth rates likely sustaining above 30% for years.