U.S. Markets close in 4 hrs 3 mins
  • S&P 500

    3,286.14
    +5.08 (+0.15%)
     
  • Nasdaq

    10,811.97
    +33.17 (+0.31%)
     
  • Russell 2000

    1,479.50
    -5.75 (-0.39%)
     
  • Crude Oil

    39.53
    +0.22 (+0.56%)
     
  • Gold

    1,901.60
    -9.00 (-0.47%)
     
  • Silver

    24.42
    +0.03 (+0.11%)
     
  • EUR/USD

    1.1708
    -0.0065 (-0.5503%)
     
  • 10-Yr Bond

    0.6770
    +0.0060 (+0.89%)
     
  • Vix

    27.59
    -0.19 (-0.68%)
     
  • GBP/USD

    1.2723
    -0.0095 (-0.7379%)
     
  • BTC-USD

    10,468.95
    +31.22 (+0.30%)
     
  • CMC Crypto 200

    222.03
    +8.28 (+3.87%)
     
  • FTSE 100

    5,829.46
    +25.17 (+0.43%)
     
  • Nikkei 225

    23,360.30
    +40.90 (+0.18%)
     

This Analyst Says JD.Com Fakes Volume, Has 'Misled' Investors And Is Worth 30% Less

John Seward

JD.Com Inc(ADR) (NASDAQ: JD) is "clearly misleading investors" about the nature of its business and faking a portion of its merchandise volume, an analyst said Wednesday.

JD, which posted about $18.52 billion in sales last year, is sometimes seen as a Chinese version of Amazon.com, Inc. (NASDAQ: AMZN).

As of earlier this year, TENCENT HOLDINGS (OTC: TCEHY) held a 17.6 percent stake in JD.Com, which has a market capitalization of about $48.91 billion.

The analyst, Anne Stevenson-Yang of J Capital Research, issued a Sell rating and $23.36 price target on JD.Com.

JD shares are up about 53 percent year-to-date.

Stevenson-Yang, based in China, said JD does up to 50 percent of its business by brokering sales between distributors.

"We believe much of this business occurs at a loss," the analyst said.

JD also sometimes buys from distributors and sells the products back to them at a 3 percent discount, Yang said

"The company may use accounting tricks to move subsidies onto its balance sheet as assets," according to Yang.

Part of the company's revenue, again according to Yang, is derived from buybacks that its suppliers are required to make if products do not sell.

Yang also said that land records indicate that JD has overpaid for its assets. JD has paid 20 percent more for 46 percent less land than Suning Commerce Group Co Ltd, a large Chinese retailer, buying in the same time frame, according to Yang.

J Capital Research is a registered investment advisor in the U.S. and provides research focused on China.

Latest Ratings for JD

Date

Firm

Action

From

To

May 2015

SunTrust Robinson Humphrey

Maintains

Buy

May 2015

Citigroup

Upgrades

Neutral

Buy

May 2015

Oppenheimer

Maintains

Outperform

View More Analyst Ratings for JD
View the Latest Analyst Ratings

See more from Benzinga

© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.