[财迷] Reasons to Buy $JD.com(JD)$

1. It's cheap relative to its growth potential

Analysts expect JD's revenue to increase 29% this year, but project its non-GAAP net income will decline 49% as it ramps up its spending again. But next year, they expect its revenue and net income to rise 22% and 104%, respectively. 

Investors should be skeptical of those estimates, but they indicate JD's stock trades at less than one times its annual revenue. By comparison, $Alibaba(BABA)$ and $Pinduoduo Inc.(PDD)$ -- which also stumbled during the Chinese tech sell-off -- trade at three and six times this year's sales estimates, respectively.

2.Partnerships With $Wal-Mart(WMT)$ ,$Alphabet(GOOGL)$ , $Tencent Holding Ltd.(TCEHY)$

JD's business operations include strategic partnerships with $Wal-Mart(WMT)$ , $Alphabet(GOOGL)$ and China-based $Tencent Holding Ltd.(TCEHY)$ .Walmart established a relationship with JD.com in 2016 and owns a 9.8% stake in the company. JD's collaboration with Walmart includes the establishment of a Sam's Club flagship store and Walmart China flagship store on JD.com's website. The two companies have leveraged each other's supply chain to increase product selection for customers across China, and they've partnered on delivery services. $Alphabet(GOOGL)$  invested $550 million in JD.com in 2018, focused on the creation of next-generation retail infrastructure services.

The partnership with China-based internet giant Tencent has a number of moving parts. JD.com has access to Tencent's wildly popular messaging and mobile payment service called WeChat. The partnership drives mobile users to JD.com. Tencent owns nearly 20% of JD.com stock.

The two are also in a strategic partnership with Dalian Wanda Commercial Properties, a leading developer, owner and operator of commercial properties in China.In addition, JD.com is focused on being a leading supply-chain-based technology and services provider. Altogether, JD.com has many similarities to $Amazon.com(AMZN)$ It's primary competitor is $Alibaba(BABA)$

Key Points

• JD.com continues to generate robust growth even as other e-commerce companies face post-pandemic slowdowns.
• JD.com's stock still looks cheap relative to its growth.