|Bid||227.01 x 800|
|Ask||227.43 x 800|
|Day's Range||225.35 - 228.00|
|52 Week Range||147.95 - 231.14|
|Beta (5Y Monthly)||2.25|
|PE Ratio (TTM)||65.04|
|Earnings Date||Jan 27, 2020 - Feb 02, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||233.74|
Speaking at a conference in Germany, a Vision Fund partner says that, as with any venture capital portfolio, “you get the bad news first.”
After 20 years of slow growth — dictated by halting productivity advances and volatile labor force participation — artificial intelligence (AI) and 5G are about to unleash progress. The sustainable P/E on U.S. equities will likely continue to trend up, because America remains the best place to invest.
Seven years ago, the two big China tech giants introduced mobile payments for the exchange of cash gifts—so-called red envelopes. Now the pair continue to compete to increase and engage users.
Tesla has met certain targets that are “remarkable” while Spotify had more than 100 million premium subscribers last year, and is “outcompeting Apple,” says James Anderson, partner and portfolio manager at Baillie Gifford.
(Bloomberg) -- Scott Bluestein has a favorite type of debt investment: companies with no profits, no cash flow, and in some cases even no revenue.While that may seem like a recipe for disaster for most fixed-income money managers, it’s perfectly normal in the world of venture debt. And few companies in the space have been more successful in recent years than Bluestein’s Hercules Capital Inc., the largest nonbank lender in the business.The market for venture debt operates largely in the shadow of venture equity, the segment of startup financing famous for providing early funding for technology giants such as Facebook Inc. and Alibaba Group Holding Ltd. Winning wagers tend to not produce the sort of eye-popping payouts the equity side has become renowned for, but they’re also less risky, relatively speaking. Flying under the radar also has its benefits, according to Bluestein.While investors have plowed hundreds of billions of dollars into direct-lending funds over the past few years amid a global hunt for yield, the $15 billion venture debt market has yet to see the same influx of cash. As a result it’s largely avoided the intense competition, record dry powder and pricing pressures seen in other corners of private credit. In fact, the Hercules chief executive expects core loan yields to keep pace with the long-term average of about 12% going forward.“Venture debt has historically mystified the direct-lending market,” Bluestein said in an interview. “We have the opportunity to partner with and help finance some of the most exciting growth-stage technology and life-sciences companies in the world.”Hercules’s current borrowers include rare-disease drug developer BridgeBio Pharma Inc. and fake-meat producer Impossible Foods Inc.Lending to such companies requires a unique blend of credit, equity and industry expertise, according to Bluestein. The ability to assess why the companies are burning cash is critical.“Venture lending is a pretty esoteric, specialized part of the market,” Bluestein said. “It requires significant domain expertise. It requires an achievement of scale from a performance perspective.”Hercules originally provided BridgeBio a $35 million secured term loan in June 2018. The financing had grown to $75 million by the time BridgeBio went public a year later. Since then, its market capitalization has ballooned to $4.3 billion.As for Impossible Foods, Hercules closed a $50 million commitment in the second quarter of 2018. A year later, the meat-substitute company reached a $2 billion valuation. In both deals, Hercules made equity investments alongside the loans. In others, it often receives equity kickers in the form of stock warrants.Of course, the lender’s record isn’t spotless. Portfolio company Sungevity Inc. filed for bankruptcy in 2017, and the debt was subsequently converted into equity of the company that bought some of its assets. BIND Therapeutics Inc. went bust in 2016, though Hercules says it was able to fully recover its outstanding commitment.Last year, the company’s main challenge was unrelated to its investments. Founder and then-CEO Manuel Henriquez was forced to step aside after being charged by federal prosecutors in March for participating in the college-admissions cheating conspiracy.Wall Street was quick to cut its expectations for publicly-traded Hercules’s shares, worried that access to capital and origination growth may be hurt. The stock has since recovered, and the company said earlier this week it had surpassed more than $10 billion in committed debt capital since its inception in 2003. Assets under management stood at $2.3 billion as of Sept. 30.Niche PlayOthers are also growing in the space. Avenue Capital has sought to raise about $500 million for a venture debt fund, Reuters reported in November. Specialty lenders in the business also include TriplePoint and Horizon Technology Finance, while Silicon Valley Bank is seen as an industry pioneer.Still, the strategy isn’t for everyone. Direct-lending giant Ares Capital Corp. exited the space in 2017, offloading its $125 million portfolio of venture loans to Hercules. CEO Kipp deVeer at the time attributed the exit to the overwhelming challenge of overseeing so many small and complicated financings.Along with being relatively small, maturities on the loans tends to be short. That makes for a fast-churn, research-intensive business. The average tenor of a Hercules loans is 36 to 48 months, but the actual average duration is just a year-and-a-half, according to Bluestein.“Our portfolio turns about every 18 months,” Bluestein said. “The treadmill is set at 10, and you can’t stop.”While recent high-profile venture-capital stumbles such as WeWork may make investors wary of startup financing broadly, Bluestein welcomes the greater scrutiny and caution, acknowledging there have been a number of so-called unicorns where valuations reached extreme levels.“It’s a positive. It puts more focus on fundamentals,” Bluestein said. “Anything that makes the market more realistic is good for business.”(Updates with Hercules assets under management in 13th paragraph.)\--With assistance from Lisa Abramowicz.To contact the reporter on this story: Lisa Lee in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Natalie Harrison at email@example.com, Adam Cataldo, Boris KorbyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Chinese e-commerce companies seem to be on a roll. Alibaba (NYSE:BABA) has been trending higher over the last few months, and JD.com (NASDAQ:JD) is not far behind. After an extended period of consolidation, JD.com stock has climbed 27% over the last three months.Source: Sundry Photography / Shutterstock.com I believe that, from a technical perspective, the range of $29 to $31 serves as strong support for JD. I also think that JD.com stock is well-positioned to rally higher in the coming quarters.From a macroeconomic perspective, the easing of trade tensions should push Chinese stocks higher. China's GDP growth could potentially accelerate in the second half of 2020 or in 2021, benefiting JD.com, among others.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Potential IPO of JD LogisticsIn December 2019, it was reported that JD Logistics, JD's logistics subsidiary, might be considering an initial public offering in the second half of 2020. The IPO could raise $8 billion to $10 billion, as JD Logistics is targeting a valuation of $30 billion.It is worth noting that JD.com holds an 81.4% stake in JD Logistics. Therefore, the company's stake is valued at $24.40 billion. * The Top 5 Dow Jones Stocks to Buy for 2020 If the IPO does proceed according to plan, I expect value to be unlocked for the owners of JD.com stock. As of Sept. 2019, JD Logistics had approximately 650 warehouses in China, and JD.com may have the best logistics network in the nation. Given JD Logistics' expansion in lower-tier cities and its adoption of new technology, it's well-positioned for healthy growth.An example of the subsidiary's adoption of high-tech solutions is that it has already announced that it will launch a 5G-powered smart logistics park. Similarly, the company has been experimenting with drone deliveries in China and Indonesia. That initiative will help JD.com extend its reach.Given JD Logistics' ample growth potential, its IPO could be very profitable for JD.com, leading to gains by JD.com stock. JD's Improving Profitability Will Increase Its Free Cash FlowsThe sustained improvement of JD's gross margin is one of the key positive aspects of JD.com stock. Its gross margin has improved from 10.80% in 2014 to 14.7% for the quarter that ended in September 2019. I believe that the company's gross margin and cash flows will continue to rise in the coming years.One of the company's key gross margin drivers is the increase in its percentage of revenue from products it sells directly to consumers (as opposed to products that outside vendors sell on its site). Its increased sales of third-party logistics services, which tend to have relatively high margins, have also helped increase its margins.China's luxury goods market is pegged at $112 billion and has been growing at a healthy pace. Chinese consumers buy a third of the luxury goods sold worldwide. Importantly, the luxury goods market is going online. Companies like JD.com and Alibaba are aggressively expanding their luxury offerings.As many as 20 fashion and luxury brands started selling their products on JD.com from April to June, the company reported last year. JD's expansion in that area should boost its margins.Additionally, in the 12 months that ended in September, JD.com reported free cash flow of $15.6 billion. I expect the company's FCF to increase in coming years. If my forecast proves to be accurate, JD.com will be able to use its funds to expand its core e-commerce business. My Concluding Thoughts on JD.com StockJD.com has also been considering expanding further overseas. The company has already made inroads in Southeast Asia by launching an e-commerce platform in Indonesia. In addition, JD has invested in a Vietnamese e-commerce business, Tiki. I expect JD.com to aggressively expand in the region, helping it maintain strong growth.Analysts, on average, expect the company's earnings per share to climb 37% in FY20. The current price-earnings ratio of JD.com stock is 27.6, making the shares inexpensive. I expect its annual EPS growth to remain well over 20% in the coming years.Considering JD's positive catalysts, JD.com stock is worth considering for 2020 and for the long-term. Profit-taking could pull down JD.com stock in the near-term. However, any decline in the shares will create a good opportunity to accumulate this high-growth stock.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post The Valuation of JD.com Stock Is Still Attractive appeared first on InvestorPlace.
HONG KONG/BEIJING (Reuters) - Ant Financial [ANTFIN.UL] shares are being offered privately at levels which value the Chinese financial giant at $200 billion, two people with knowledge of the discussions said, lifting it up the ranks of the most valuable unlisted companies. Alibaba affiliate Ant, which had an implied valuation of $150 billion during a 2018 fundraising, is preparing to step up plans for eventually going public in Hong Kong and mainland China, three other sources told Reuters. Speculation has grown that Ant, the world's largest so-called "unicorn" -- a newly-formed unlisted tech firm valued at $1 billion or more -- is working toward an IPO this year.
Amid the much hyped but ultimately disappointing spate of initial public offerings stands Luckin Coffee (NASDAQ:LK). Unlike names such as Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT), Luckin doesn't deal with technology per se. Rather, it focuses on delivering a longtime crowd favorite, coffee, to an emerging economic superpower. But has the dramatic enthusiasm for LK stock reached the point of irrationality?Source: Keitma / Shutterstock.com It's a fair question for prospective buyers to ask. Since its IPO price of $17, LK stock has launched toward its present level above $45. Doing the quick math, that's more than a 165% return. Even more impressive, shares haven't even turned a year old yet. Still, fresh names in the markets have a tendency for volatility.However, the investors that have bought in comfort themselves with Luckin Coffee's underlying sector. Although China is traditionally a tea-drinking mecca, the Asian juggernaut has rapidly embraced Western cultural elements and products. And one of the longstanding traditions of the West is coffee.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, Chinese consumers have embraced the pick-me-up. According to one statistic, China's coffee market will be worth something like $145 billion by 2025. * 9 Up-and-Coming Small-Cap Stocks to Watch For perspective, the U.S. coffee market reached between $87 billion to $88 billion in 2018. Now you can see why so many early-bird investors are enthused about LK stock.But should you dive into this name at this point in the game? Although the potential for upside certainly exists, here are three reasons why I'm cautious over the long run. Margins for LK Stock Are WorrisomeTypically, investors give upstart growth firms like Luckin Coffee some leeway in terms of profitability metrics. They understand that some companies must eschew profits for growth. Once their expansionary strategy is complete, these firms can later switch back to returning value for shareholders.However, not all businesses and industries are the same. For food and beverage companies, for example, I'd much prefer them to be profitable out of the gate. In this case, coffee is coffee -- it shouldn't cost that much to make relative to top-line sales.And that's not just my opinion. Experts in the food and beverage market suggest aiming for gross margins around 75%.But for LK stock, the underlying gross margin was negative until the quarter ending June 30. Plus, in the most recently reported quarter ending Sep. 30, net income losses widened year-over-year.Now, I'm willing to overlook such metrics for a tech firm that is developing a quantum computer for the masses. But Luckin is not in that business at all. Instead, it's making coffee, which is hardly a unique product. Thus, to minimize my risk as a potential shareholder, I'd prefer profitability. Certainly, I don't want to see deeper losses. Luckin's Playing a Dangerous GameFor the optimists of LK stock, they often point to the underlying company's duel with sector giant Starbucks (NASDAQ:SBUX). In order to counter Starbucks' dominant reach, Luckin is fighting fire with fire. By focusing on smaller shops that facilitate easy pick up, Luckin has expanded its physical footprint at an astonishing rate.In fact, Luckin CFO Reinout Schakel told CNBC's Squawk Box, "We have done what most people do in 15 or 20 years." Naturally, many folks jumped on LK stock on the idea that Starbucks finally met its match.I'm probably in the extreme minority here when I say this. However, when Schakel made his statement, I didn't view it as a positive. If you're growing that fast, you're at least taking serious risks somewhere else.And that somewhere else is Starbucks' delivery initiative. Partnering with Alibaba (NYSE:BABA), Starbucks has added delivery options for over 2,100 of its China-based stores. Furthermore, China Daily reported that the country's online food ordering and delivery market hit 441.5 billion yuan ($65.8 billion) in 2018. That was up 112.5% over the prior year.Yes, Luckin's expanding footprint is a positive for LK stock, don't get me wrong. However, Starbucks is at least mitigating this advantage through its deliveries. Furthermore, Chinese consumers are willing to pay for this service.With Luckin's financials stretched for growth, it's possible the company may have overextended itself with its footprint strategy. Not Understanding the AudienceOne of the biggest mistakes you can make in public speaking is not understanding your audience. By not doing your homework, you can quickly lose the purpose of your engagement. So it is with business.Through its use of aggressive discounts, Luckin has presented the image of the everyday affordable coffee shop. But if that was the real intention, it's off on the wrong foot. Based on the poor margins and steep net income losses, it will have to raise prices at some point. When it does, it will lose many of their budget-sensitive customers.Moreover, the Chinese audience is different from the Western one in that it has no historical frame of reference for pleasures of modernity. As a result, things that we take for granted here in the U.S. are often considered luxuries in China.Sure enough, one of those perceived luxuries is coffee. According to the University of Southern California's US-China Institute, many well-to-do Chinese consumers prefer name-brand, high-priced coffee because of their status symbol. "For coffee consumers in China, Starbucks and other Western coffee brands enable them to show off their wealth and good taste," Rebecca Harbeck writes.You're just not going to get that experience from and discount-brand Luckin Coffee. And when Luckin stops giving out those discounts because it can't? I'm not sure if LK stock can reasonably compete against Starbucks or other premium, internationally recognized brands.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Up-and-Coming Small-Cap Stocks to Watch * 7 Energy Stocks to Buy on the Resurgence of the Oil Boom * 3 Standout Oil Services Stocks to Buy The post You Should Down Luckin Coffee Stock While Itas Hot appeared first on InvestorPlace.
FT subscribers can click here to receive Market Forces every day by email. The top 10 music chart was a vital point of reference during my formative days (1980s) and this list was marked by a constant churn, with only rare moments of longstanding dominance by one particular song or album. Today, the so-called top 10 for equities is dominated by the “fabulous five” US technology titans, with China’s Alibaba and Tencent also in the mix.
Hong Kong's capital market, which ranked top in global initial public offerings (IPOs) in 2019 for the eighth time in 11 years, can expect a "robust pipeline" of deals this year as multinational corporations mull secondary listings, said one of the city's top bookrunners.The typical deal size this year will range anywhere from US$200 million to US$2 billion, considerably smaller than Alibaba Group Holding's US$13.9 billion secondary listing that gave Hong Kong the 11-month push past the finishing line to snatch last year's IPO crown from New York, said Citigroup Hong Kong's head of corporate and investment banking Christopher Laskowski."It'll be a robust pipeline for 2020" with "no shortage of deals," Laskowski said in an interview during the Hong Kong Venture Capital and Private Equity Association's conference with South China Morning Post, wholly owned by Alibaba. "Citi is working on at least 10 of these deals in which we are the lead bookrunners."The frenetic activity will be a boon for a city on its way to the first technical recession in a decade, as seven months of unprecedented political crisis and a year-long US-China trade war have put the squeeze on the local economy. Still, Hong Kong's capital market and the city's pegged currency have withstood the headwinds from the slump, which have crimped everything else from retail sales and property prices to corporate expansion and investments.It'll also keep Citi " third among Hong Kong's bookrunners with an estimated US$3.08 billion raised by 13 IPOs last year according to Refinitiv data " busy. The US bank was ranked eighth as an arranger of capital raising by Chinese companies, leading five IPOs in raising an estimated US$195.4 million.The upcoming IPO trend will be bifurcated, with technology companies, start-ups and internet-related companies making a beeline for the US market where their business models are better understood by US investors, while companies that draw on China's population list closer to home in Hong Kong, Laskowski said."Hong Kong investors understand the retail and the consumer sector better, as they understand the Chinese consumers' mindset," he said, adding that five of the deals Citi is working on are slated for Hong Kong, while the rest are heading for the US.Amid the temporary respite in the US-China trade war following the signing of the Phase One trade deal, companies are returning to the capital markets to tap funds. Seven companies, from a TV producer to a furniture maker, raised a combined HK$2.65 billion (US$341 million) this week, with their shares trading for the first time on the same day in an unprecedented joint debut.Citi was one of the joint bookrunners and joint lead managers for Alibaba's secondary listing in Hong Kong last year. Following the landmark fundraising, which saw Alibaba's shares surge by more than 20 per cent since their Hong Kong listing, several US-listed Chinese technology companies began looking into the feasibility of raising additional funds in the city.Laskowski's team has also been talking with several multinational companies with bricks-and-mortar operations, about a secondary listing in Hong Kong.That is because a Chinese tech company whose US stocks have already been trading well in the US and fairly valued by the market might not immediately benefit from a secondary listing, he said. There are other strategic considerations behind a company's move to list in Hong Kong, Laskowski said.For example, a secondary listing could be interesting to a multinational corporation looking to better capture the value of the Asian business. This could be associated with the group's effort to deliver through the share sale, or more generally to improve the valuation of its primary listing.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
Indian e-commerce space gets pepped up with the growing initiatives of overseas companies like Amazon (AMZN), Walmart (WMT) among others.
After years of on again, off again talks that often sapped riskier assets in both countries, the U.S. and China finally inked "phase one" of a trade package on Wednesday. At the heart of the agreement are pledges by China to boost purchases of an array of U.S.-produced commodities, including agricultural and energy goods, and to lay off pilfering technological intellectual property. It's hoped that phase one serves as a starting point for a broader trade deal or, at the very least, talks on "phase two" at some point later this year.
Alibaba Group (NYSE: BABA and HKEX: 9988), as a Worldwide Partner for the Olympic Games, unveiled its "Alibaba Cloud Gallery" at Narita Airport, a creative campaign with budding Japanese artists to create a memorable first impression for travelers when they first step into one of the world's busiest airports. This is a collaboration with Narita Airport to provide a great platform for local talent to showcase their creativity, passion for the local culture and desire to express themselves with digital art. The art creation will be shown on digital screens along nine walkways in Terminals One and Two of Arrival at the Narita Airport.
Ant would prefer we call it a “techfin” firm as its growing clout in Chinese financial services has landed it under the nose of cautious regulators of that industry — one of the reasons its IPO has been delayed for years. Ant dominates mobile payments in China, where scanning QR codes to pay for everything from a bowl of noodles to bike-shares to movie tickets is the norm. Its app includes one of the world's largest money market funds.
opposed company decisions or policies last year and there is no sign that investors will let up. If anything, some of the most high-profile funds are likely to start 2020 emboldened by evidence in favour of their approach with activist investors’ plays emerging as one of the best performing strategies last year. “It’s a reflection of this movement of aggressive shareholder behaviour moving into the mainstream,” Jim Rossman, head of shareholder advisory at Lazard told the FT.
Ant, the sister company of the ecommerce giant Alibaba, was last valued at $150bn in a 2018 fundraising round and a listing, even of a small portion of its shares, would represent one of the biggest floats of an Asian company. Credit Suisse is involved in the early stage preparations, according to two people familiar with the matter. China International Capital Corp is also involved in the work, one of the people said.
Vipshop Holdings (VIPS) stock has soared 140% in the last year to crush Alibaba as the online discount retailer expands its customer base...
Which names qualify as potential Warren Buffett stocks? See this screen feauturing companies like Alibaba, Alphabet, Veeva, PayPal and more.