JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering_老虎社区_美港股上老虎

JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering

seekingalpha2021-04-20

Summary JD.com has fallen out of favor with investors, together with the rest of Chinese stocks. JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates. ...

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Barbarazhao
·2021-04-24
I am very confident that JD will continue to do well. I have high percentage for this shares
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金牌
·2021-04-20
ugly thief jd
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Songy
·2021-04-20
Like and comment
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刘德华Andylau
·2021-04-20
🚀
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LimPC
·2021-04-20
Cool
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ct123456
·2021-04-20
Cool
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- Songy:
  Comment pls
  2021-04-20
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line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">网页链接</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"JD","symbol_name":"京东","start_time":0,"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","article_id":"1154218683","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","pubTimestamp":1618920744,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"translate_title":"京东：稳健的增长，强劲的自由现金流--为什么值得考虑","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"09618":0.9,"JD":0.9},"content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":372282012,"gmtCreate":1619221318236,"gmtModify":1634287719064,"author":{"id":"3576888762442253","authorId":"3576888762442253","name":"Barbarazhao","avatar":"https://static.tigerbbs.com/40f6fdeabe0e8cac300f1fd2a17eb3ac","vip":1,"crmLevel":8,"crmLevelSwitch":0,"idStr":"3576888762442253","authorIdStr":"3576888762442253"},"htmlText":"I am very confident that JD will continue to do well. I have high percentage for this shares&nbsp;","listText":"I am very confident that JD will continue to do well. I have high percentage for this shares&nbsp;","text":"I am very confident that JD will continue to do well. I have high percentage for this shares","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/372282012","repostId":1154218683,"repostType":2,"repost":{"id":"1154218683","kind":"news","pubTimestamp":1618920744,"share":"https://www.laohu8.com/m/news/1154218683?lang=&edition=full","pubTime":"2021-04-20 20:12","market":"hk","language":"en","title":"JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering","url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","media":"seekingalpha","summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","content":"Summary\n<ul>\n <li>JD.com has fallen out of favor with investors, together with the rest of Chinese stocks.</li>\n <li>JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.</li>\n <li>Without any heroics, this stock trades for less than 18x forward free cash flow.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/fca1ede6aff4d57a8a6881983d6a5ae4\" tg-width=\"1536\" tg-height=\"1024\">Photo by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\n<img src=\"https://static.tigerbbs.com/1abbb6557efecaad89bf294c2a194266\" tg-width=\"635\" tg-height=\"453\">Data by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\n<img src=\"https://static.tigerbbs.com/9304aa7294310f8766138c9c5fe2092a\" tg-width=\"640\" tg-height=\"298\">Source: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\n<img src=\"https://static.tigerbbs.com/d23f6dbcc0c579246a26bbfea2ae9daf\" tg-width=\"640\" tg-height=\"455\">Source: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\n<img src=\"https://static.tigerbbs.com/61937b65a1bb827323293df146ceb1bd\" tg-width=\"640\" tg-height=\"360\">Source: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\n<img src=\"https://static.tigerbbs.com/1e9ceb308beeb73af69318348550c8a3\" tg-width=\"640\" tg-height=\"352\">Source: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1154218683","content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371157506,"gmtCreate":1618923330305,"gmtModify":1618927113599,"author":{"id":"3541480194111269","authorId":"3541480194111269","name":"金牌","avatar":"https://static.tigerbbs.com/fdffb1f4b534ab4db6faeb90edd2613c","vip":1,"hat":"https://static.tigerbbs.com/e6295840391b9cdc17115677ba51429c","crmLevel":1,"crmLevelSwitch":0,"idStr":"3541480194111269","authorIdStr":"3541480194111269"},"htmlText":"ugly thief jd","listText":"ugly thief jd","text":"ugly thief jd","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/371157506","repostId":1154218683,"repostType":2,"repost":{"id":"1154218683","kind":"news","pubTimestamp":1618920744,"share":"https://www.laohu8.com/m/news/1154218683?lang=&edition=full","pubTime":"2021-04-20 20:12","market":"hk","language":"en","title":"JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering","url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","media":"seekingalpha","summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","content":"Summary\n<ul>\n <li>JD.com has fallen out of favor with investors, together with the rest of Chinese stocks.</li>\n <li>JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.</li>\n <li>Without any heroics, this stock trades for less than 18x forward free cash flow.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/fca1ede6aff4d57a8a6881983d6a5ae4\" tg-width=\"1536\" tg-height=\"1024\">Photo by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\n<img src=\"https://static.tigerbbs.com/1abbb6557efecaad89bf294c2a194266\" tg-width=\"635\" tg-height=\"453\">Data by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\n<img src=\"https://static.tigerbbs.com/9304aa7294310f8766138c9c5fe2092a\" tg-width=\"640\" tg-height=\"298\">Source: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\n<img src=\"https://static.tigerbbs.com/d23f6dbcc0c579246a26bbfea2ae9daf\" tg-width=\"640\" tg-height=\"455\">Source: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\n<img src=\"https://static.tigerbbs.com/61937b65a1bb827323293df146ceb1bd\" tg-width=\"640\" tg-height=\"360\">Source: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\n<img src=\"https://static.tigerbbs.com/1e9ceb308beeb73af69318348550c8a3\" tg-width=\"640\" tg-height=\"352\">Source: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1154218683","content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371123032,"gmtCreate":1618922015426,"gmtModify":1634289900152,"author":{"id":"3570676891706485","authorId":"3570676891706485","name":"Songy","avatar":"https://static.tigerbbs.com/d3cac0923861c776658a275d83f896eb","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3570676891706485","authorIdStr":"3570676891706485"},"htmlText":"Like and comment&nbsp;","listText":"Like and comment&nbsp;","text":"Like and comment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/371123032","repostId":1154218683,"repostType":4,"repost":{"id":"1154218683","kind":"news","pubTimestamp":1618920744,"share":"https://www.laohu8.com/m/news/1154218683?lang=&edition=full","pubTime":"2021-04-20 20:12","market":"hk","language":"en","title":"JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering","url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","media":"seekingalpha","summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","content":"Summary\n<ul>\n <li>JD.com has fallen out of favor with investors, together with the rest of Chinese stocks.</li>\n <li>JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.</li>\n <li>Without any heroics, this stock trades for less than 18x forward free cash flow.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/fca1ede6aff4d57a8a6881983d6a5ae4\" tg-width=\"1536\" tg-height=\"1024\">Photo by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\n<img src=\"https://static.tigerbbs.com/1abbb6557efecaad89bf294c2a194266\" tg-width=\"635\" tg-height=\"453\">Data by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\n<img src=\"https://static.tigerbbs.com/9304aa7294310f8766138c9c5fe2092a\" tg-width=\"640\" tg-height=\"298\">Source: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\n<img src=\"https://static.tigerbbs.com/d23f6dbcc0c579246a26bbfea2ae9daf\" tg-width=\"640\" tg-height=\"455\">Source: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\n<img src=\"https://static.tigerbbs.com/61937b65a1bb827323293df146ceb1bd\" tg-width=\"640\" tg-height=\"360\">Source: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\n<img src=\"https://static.tigerbbs.com/1e9ceb308beeb73af69318348550c8a3\" tg-width=\"640\" tg-height=\"352\">Source: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1154218683","content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371160423,"gmtCreate":1618921044262,"gmtModify":1634289907145,"author":{"id":"3561891557783829","authorId":"3561891557783829","name":"刘德华Andylau","avatar":"https://static.tigerbbs.com/d7a382e10620661ed3a01fc6d1d8398f","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3561891557783829","authorIdStr":"3561891557783829"},"htmlText":"🚀","listText":"🚀","text":"🚀","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/371160423","repostId":1154218683,"repostType":4,"repost":{"id":"1154218683","kind":"news","pubTimestamp":1618920744,"share":"https://www.laohu8.com/m/news/1154218683?lang=&edition=full","pubTime":"2021-04-20 20:12","market":"hk","language":"en","title":"JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering","url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","media":"seekingalpha","summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","content":"Summary\n<ul>\n <li>JD.com has fallen out of favor with investors, together with the rest of Chinese stocks.</li>\n <li>JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.</li>\n <li>Without any heroics, this stock trades for less than 18x forward free cash flow.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/fca1ede6aff4d57a8a6881983d6a5ae4\" tg-width=\"1536\" tg-height=\"1024\">Photo by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\n<img src=\"https://static.tigerbbs.com/1abbb6557efecaad89bf294c2a194266\" tg-width=\"635\" tg-height=\"453\">Data by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\n<img src=\"https://static.tigerbbs.com/9304aa7294310f8766138c9c5fe2092a\" tg-width=\"640\" tg-height=\"298\">Source: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\n<img src=\"https://static.tigerbbs.com/d23f6dbcc0c579246a26bbfea2ae9daf\" tg-width=\"640\" tg-height=\"455\">Source: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\n<img src=\"https://static.tigerbbs.com/61937b65a1bb827323293df146ceb1bd\" tg-width=\"640\" tg-height=\"360\">Source: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\n<img src=\"https://static.tigerbbs.com/1e9ceb308beeb73af69318348550c8a3\" tg-width=\"640\" tg-height=\"352\">Source: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1154218683","content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371160096,"gmtCreate":1618920976615,"gmtModify":1634289907748,"author":{"id":"3581581334353222","authorId":"3581581334353222","name":"LimPC","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3581581334353222","authorIdStr":"3581581334353222"},"htmlText":"Cool","listText":"Cool","text":"Cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/371160096","repostId":1154218683,"repostType":4,"repost":{"id":"1154218683","kind":"news","pubTimestamp":1618920744,"share":"https://www.laohu8.com/m/news/1154218683?lang=&edition=full","pubTime":"2021-04-20 20:12","market":"hk","language":"en","title":"JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering","url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","media":"seekingalpha","summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","content":"Summary\n<ul>\n <li>JD.com has fallen out of favor with investors, together with the rest of Chinese stocks.</li>\n <li>JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.</li>\n <li>Without any heroics, this stock trades for less than 18x forward free cash flow.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/fca1ede6aff4d57a8a6881983d6a5ae4\" tg-width=\"1536\" tg-height=\"1024\">Photo by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\n<img src=\"https://static.tigerbbs.com/1abbb6557efecaad89bf294c2a194266\" tg-width=\"635\" tg-height=\"453\">Data by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\n<img src=\"https://static.tigerbbs.com/9304aa7294310f8766138c9c5fe2092a\" tg-width=\"640\" tg-height=\"298\">Source: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\n<img src=\"https://static.tigerbbs.com/d23f6dbcc0c579246a26bbfea2ae9daf\" tg-width=\"640\" tg-height=\"455\">Source: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\n<img src=\"https://static.tigerbbs.com/61937b65a1bb827323293df146ceb1bd\" tg-width=\"640\" tg-height=\"360\">Source: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\n<img src=\"https://static.tigerbbs.com/1e9ceb308beeb73af69318348550c8a3\" tg-width=\"640\" tg-height=\"352\">Source: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1154218683","content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371184308,"gmtCreate":1618920849704,"gmtModify":1634289908430,"author":{"id":"3565932120723517","authorId":"3565932120723517","name":"ct123456","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3565932120723517","authorIdStr":"3565932120723517"},"htmlText":"Cool","listText":"Cool","text":"Cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":2,"repostSize":0,"link":"https://laohu8.com/post/371184308","repostId":1154218683,"repostType":4,"repost":{"id":"1154218683","kind":"news","pubTimestamp":1618920744,"share":"https://www.laohu8.com/m/news/1154218683?lang=&edition=full","pubTime":"2021-04-20 20:12","market":"hk","language":"en","title":"JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering","url":"https://stock-news.laohu8.com/highlight/detail?id=1154218683","media":"seekingalpha","summary":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD","content":"Summary\n<ul>\n <li>JD.com has fallen out of favor with investors, together with the rest of Chinese stocks.</li>\n <li>JD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.</li>\n <li>Without any heroics, this stock trades for less than 18x forward free cash flow.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/fca1ede6aff4d57a8a6881983d6a5ae4\" tg-width=\"1536\" tg-height=\"1024\">Photo by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\n<img src=\"https://static.tigerbbs.com/1abbb6557efecaad89bf294c2a194266\" tg-width=\"635\" tg-height=\"453\">Data by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\n<img src=\"https://static.tigerbbs.com/9304aa7294310f8766138c9c5fe2092a\" tg-width=\"640\" tg-height=\"298\">Source: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\n<img src=\"https://static.tigerbbs.com/d23f6dbcc0c579246a26bbfea2ae9daf\" tg-width=\"640\" tg-height=\"455\">Source: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\n<img src=\"https://static.tigerbbs.com/61937b65a1bb827323293df146ceb1bd\" tg-width=\"640\" tg-height=\"360\">Source: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\n<img src=\"https://static.tigerbbs.com/1e9ceb308beeb73af69318348550c8a3\" tg-width=\"640\" tg-height=\"352\">Source: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com: Solid Growth, Strong Free Cash Flow - Why It's Worthwhile Considering\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\n...\n\n<a href=\"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"JD":"京东","09618":"京东集团-SW"},"source_url":"https://seekingalpha.com/article/4419966-jd-com-solid-growth-strong-free-cash-flow-why-worthwhile-considering","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1154218683","content_text":"Summary\n\nJD.com has fallen out of favor with investors, together with the rest of Chinese stocks.\nJD.com continues to report steady growth rates, with Q4 2020 topping +30% y/y revenue growth rates.\nWithout any heroics, this stock trades for less than 18x forward free cash flow.\n\nPhoto by Andrew Burton/Getty Images News via Getty Images\nInvestment Thesis\nJD.com (JD) has fallen out of favor with investors lately. However, its fundamental performance continues to be exemplary.\nI lay down my rationale for why the market is undervaluing this stock, as well as demonstrating that it's clearly cheaply valued as it trades for less than 18x its 2021 free cash flow.\nHere's why this stock is worthwhile considering:\nRevenue Growth Rates And Investors' Sentiment\nData by YCharts\nAs you can see above, the graph practically speaks for itself.\nNot only have investors gone sour on Alibaba (BABA) of late, but they've soured up on JD.com and Pinduoduo (PDD) too. I would go so far as to remark that most Chinese stocks have now, once again, fallen out of favor with investors.\nIndeed, it's quite challenging for investors to keep up with all the twists, turns, and emotional predispositions investors have towards Chinese stocks.\nOn the other hand, in a mirror image to the mercurial sentiment investors hold against Chinese stocks, JD.com continues to report astonishing revenue growth rate numbers.\nSource: author's calculations, JD.com Press Statements\nNot only is JD.com showing that it has dramatically accelerated post-COVID, but those numbers are nothing short of remarkable. Yet, as you know, investors have been all-too-quick to dismiss investing in China right now.\nBreaking DownJD.com'sRevenue Stream\nAs a reminder, approximately 85% of JD.com's revenue is derived from its product revenue. These are products that get delivered through their own heavily invested supply chain infrastructure.\nSource: Q4 2020 Investor Presentation\nIn line with the consistent theme we've heard over the past year, JD.com's revenue is coming increasingly from lower-tier cities. In fact, during Q4 2020, for the first time, 80% of its new users came from these lower-tier cities.\nThis demonstrates that JD.com is resonating with these consumers and arguably offers JD.com a solid moat, as it can continue to deliver products to very price-conscious consumers all the while at a profit.\nMoreover, this ability to turn a profit and out-compete with mom and pop shops continues to allow JD.com to gain market share from other retailers, but it also keeps out Alibaba from gaining a foothold here.\nWhat Else is Weighing on the Stock?\nSource: Investor Presentation\nThe problem JD.com's stock has come up against is that JD.com was a story of expanding its razor-thin profit margins. Long ago, the idea had been that as JD.com continued to drive top-line growth, its scale would be improving its profit margins.\nHowever, as you can see above, during Q4 2020, the increase in its top-line did not translate to an improvement in gross margins. More specifically, you can see that during Q4 2020 its gross margins were 13.9%, 200 basis points more compressed than during the same period a year ago.\nAnd this is obviously not aligned with what shareholders had come accustomed to expecting from JD.com.\nFor their part, JD.com notes that it continues to invest in its infrastructure, that this is allowing merchants to increase their reliance on JD.com omnichannel capacity to deliver in more innovative ways -- yet investors have evidently not bought intothatnarrative.\nValuation - Why This Stock Carries a Large Margin of Safety\nSource: Q4 2020 Investor Presentation\nJD.com is not a free cash flow story. But the fact that it does generate free cash flow certainly supports my bullish thesis that the stock trades for 23x trailing free cash flow - using $5.3 billion shownhere.\nMoreover, keep in mind that putting aside 2018, a year with very heavy capex requirement (non-recurring event), JD.com is steadily growing its free cash flow every year.\nAlso, aligned with the story that as JD.com gains scale its free cash flow will similarly increase, we can see that in 2020 there was indeed a jump of approximately 79% compared with 2019.\nConsequently, without any heroics, if we largely assume that JD.com's free cash flow grows bya further 30% y/y in 2021, somewhat in line with its recent top-line growth, investors could easily expect its free cash flow to reach $6.9 billion.\nIn other words, even though JD.com is not a free cash flow story, it nevertheless would be trading for less than 18x forward free cash flow.\nPotential Risks of Investing in JD.com\nJD.com is an overseas stock. Thus, as noted throughout, it's prone to the vicissitudes and investor sentiment that faces most overseas stocks, particularly Chinese stocks.\nI would add that, unlike other big Chinese stocks (I shall not disclose the name, but if you follow the space, you know what I'm talking about), the numbers from JD.com are clean.\nThey are not aggressively investing in smaller enterprises and then increasing their ''below the line'' earnings as those stock get ''repriced higher'' so that their earnings get a steady and consistent improvement.\nIn actuality, that's why I have essentially focused the effort of my discussion towards predominantly discussing JD.com's free cash flow, in an effort to avoid any questions over its earnings or accounting. With free cash flow, what you seeis what you get.\nThe Bottom Line\nIt's very difficult to know when and how JD.com will return to hold investor's favor. The question readers may have been what catalysts are there on the horizon that is likely to drive shareholder returns? I do not know.\nHaving said that, I strongly contend that JD.com is making solid free cash flows all the while consistently growing its top-line and solidifying its supply chain infrastructure.\nIt may seem like forever right now, but in time, the marketwillreturn to recognizing just how plainly undervalued these shares are right now.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4083414,"gmtCreate":1618922036739,"gmtModify":1635515533129,"authorId":3570676891706485,"author":{"id":3570676891706485,"idStr":"3570676891706485","authorId":3570676891706485,"name":"Songy","avatar":"https://static.tigerbbs.com/d3cac0923861c776658a275d83f896eb","vip":1,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371184308,"type":1,"supId":0,"prevId":0,"content":"Comment pls","text":"Comment pls","html":"Comment pls"},{"id":4094686,"gmtCreate":1619016797661,"gmtModify":1635514624103,"authorId":3565932120723517,"author":{"id":3565932120723517,"idStr":"3565932120723517","authorId":3565932120723517,"name":"ct123456","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371184308,"type":1,"supId":4083414,"prevId":0,"content":"like","text":"like","html":"like"}],"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":16,"commentSize":6,"repostSize":0,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false}}