|Bid||33.42 x 800|
|Ask||33.48 x 1200|
|Day's Range||32.70 - 34.64|
|52 Week Range||16.53 - 36.89|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 18, 2019 - Nov 22, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||34.95|
You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros […]
Investors are worried about China’s trade war with the U.S., escalating violence in Hong Kong, and increasing oversight of the private sector by the Chinese government.
Dow Jones futures: The U.S. says it won't delist Chinese stocks such as Alibaba and Huya. Meanwhile, Chinese manufacturing data topped views. Apple near a buy point again.
Pinduoduo Inc. (“Pinduoduo” or the “Company”) (PDD), an innovative and fast growing “new e-commerce” platform and one of the leading Chinese e-commerce players, today announced that it closed the offering (the “Notes Offering”) of US$1 billion in aggregate principal amount of convertible senior notes due 2024 (the “Notes”), which included the exercise in full by the initial purchasers of their option to purchase up to an additional US$125 million in aggregate principal amount of the Notes. The Notes have been offered in the United States to qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).
U.S.-listed stocks of Chinese companies fell sharply Friday, after a report that the White House is considering a limit to Chinese companies trading on U.S. The report from Bloomberg News cited people familiar with the matter and suggests an escalation of the tensions between the two economies that are already in the midst of a trade dispute. Among the stocks that moved lower, Huya Inc. , a live videogame streaming platform fell 9%, electric car maker Nio Inc. fell 10%, iQiyi Inc. , a Netflix type service, fell 9%, Internet giant Baidu Inc. fell 2.6% and Luckin Coffee , the 'Starbucks' of China, fell 5%. E-commerce company Pinduoduo Inc. was down 6%. Alibaba was down 4.4%.
Pinduoduo Inc. (“Pinduoduo” or the “Company”) (PDD), an innovative and fast growing “new e-commerce” platform and one of the leading Chinese e-commerce players, today announced the pricing of its previously announced offering (the “Notes Offering”) of US$875 million in aggregate principal amount of convertible senior notes due 2024 (the “Notes”). The Company has granted the initial purchasers in the Notes Offering a 13-day option to purchase up to an additional US$125 million in principal amount of the Notes. The Company plans to use the net proceeds from the Notes Offering to enhance and expand its business operations, for research and development, to continue to invest in and develop its technology infrastructure, and for working capital and other general corporate purposes.
Dow Jones futures: Lockheed Martin neared a buy on a NASA contract. Pinduoduo fell on a debt offering. Facebook will buy brain-computing startup CTRL-labs.
Pinduoduo Inc. (“Pinduoduo” or the “Company”) (PDD), an innovative and fast growing “new e-commerce” platform and one of the leading Chinese e-commerce players, today announced the proposed offering (the “Notes Offering”) of US$875 million in aggregate principal amount of convertible senior notes due 2024 (the “Notes”), subject to market and other conditions. The Company intends to grant the initial purchasers in the Notes Offering a 13-day option to purchase up to an additional US$125 million in principal amount of the Notes. The Company plans to use the net proceeds from the Notes Offering to enhance and expand its business operations, for research and development, to continue to invest in and develop its technology infrastructure and for working capital and other general corporate purposes.
It's tempting to believe that JD.com (NASDAQ:JD) is an attractive stock held down only by trade war worries. After all, JD stock, even with a strong 2019, sits about one-third below 2018 highs. And it looks reasonably cheap from a fundamental standpoint, with a 26 times forward multiple despite analyst expectations for 250% growth in earnings per share between 2018 and 2020.Source: Michael Vi / Shutterstock.com To be sure, I do believe JD stock is somewhat undervalued. I wrote last month after the company's blowout earnings report that the stock should keep rising. JD.com shares have moved higher, though resistance at $32 continues to hold.And JD stock clearly has taken some hits from trade war sentiment. Most notably, the stock fell 19% in eight sessions starting in late July, during which time the U.S. announced new tariffs on China. The distance from 2018 highs, too, might seem trade-related.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the story isn't quite that simple. That doesn't mean JD.com stock is a sell. Again, I see upside from current levels. But it does mean that a trade war resolution, if and when it comes, might not be the catalyst some bulls hope. The Currency Effect on Chinese StocksThere no doubt is some trade war impact priced into Chinese equities at the moment. For instance, the iShares MSCI China ETF (NASDAQ:MCHI) still is down 23% from January 2018 highs. * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars But one notable contributor to that decline has been currency. The Chinese yuan has fallen over 10% against the dollar over that span. That means profits -- and expected profits -- are less valuable in American dollars. And given that Chinese companies, including JD.com, generate nearly all of their revenues domestically, currency alone likely has driven roughly half the decline in Chinese stocks over the past 20 months. JD Stock UnderperformsMeanwhile, JD stock -- perhaps surprisingly -- actually has underperformed that ETF over the same period. JD shares have dropped almost 40%. And there have been some company-specific factors driving the decline. 2018 results were disappointing. JD missed Street estimates for revenue in both the second and third quarters. For the year, non-GAAP net income declined 31% in local currency.To be sure, JD was investing in its business, which created some pressure on margins. And the huge second quarter -- in which margins rebounded -- suggests those investments are paying off.Still, this year, revenue growth has slowed, to under 17% year-over-year in the first half. That's notably slower than larger rival Alibaba (NYSE:BABA). Pinduoduo (NASDAQ:PDD) grew its revenue 169% in the second quarter, albeit off a much smaller base.Again, none of this is to suggest that JD stock is a short or a sell here. At 26x forward earnings, valuation is reasonable in the context of current growth. But there are risks here. A number of key employees have left of late. Margins are exceedingly thin. Any incremental pricing pressure can lead to a repeat of 2018's earnings decline.And some of these issues have been a factor in the underperformance of JD.com stock. This isn't just a trade war problem. Is JD.com the Right Play?Would a trade war resolution help JD stock? Absolutely. But there's certainly a risk that it could be what is known as a "sell the news" event. It's not as if investors have simply dumped the sector: MCHI has gained almost 12% this year and JD.com stock has risen 43%. Some kind of resolution -- at some point -- already is priced in.There's another question as well: Is JD stock necessarily the biggest beneficiary of a trade war resolution? I still think there's an intriguing long-term case for iQiyi (NASDAQ:IQ) despite disappointing earnings. NetEase (NASDAQ:NTES) and Tencent (OTCMKTS:TCEHY) could be interesting as well.Forced to choose, I'd still pick JD. But that choice would be made understanding the risks. Margins are thin, competition is intense and China has economic issues that go beyond tariffs. Those factors will hold with or without a trade war -- and they suggest that JD isn't simply going to soar once a trade accord is reached.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars * 5 Stocks to Buy With Great Charts * 5 Goldman Sachs Stocks to Buy with Over 20% Upside Potential The post JD.com Stock's Problems Go Beyond the U.S.-China Trade War appeared first on InvestorPlace.
It would seem like the news has been pretty good of late for Alibaba Group (NYSE:BABA) stock … with one obvious exception. The last two earnings reports have looked impressive. The overhang of a major stockholder is ending. And yet Alibaba stock has stayed stuck, trading sideways since February.Source: Nopparat Khokthong / Shutterstock.com To be sure, the U.S.-China trade war presents an apparent stumbling block in front of BABA stock. But rival JD.com (NASDAQ:JD) has outperformed Alibaba shares of late, while facing the same trade-driven macro headwinds at home.JD isn't the only Chinese stock with better returns. Yes, Alibaba Group shares have returned 27% so far this year. That's better than the 16% average of China's 21 U.S.-listed large-cap (>$10 billion) stocks. But that return puts BABA stock just seventh in the group, well behind leaders New Oriental Education & Technology Group (NYSE:EDU) and Pinduoduo (NASDAQ:PDD), the latter of which has almost doubled in the last two-plus months.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo, relative underperformance, a cheap valuation, and Alibaba's market-leading status would seem to clear a path for BABA stock to finally break through $200 and beyond. After all, it's hard (though not impossible) to see external conditions being much worse, yet Alibaba has grown earnings and Alibaba stock has managed to rise.That path is open. But the concern has to be that if BABA shares stay stuck, it could signal they're going to be stuck for a very long time. What's Gone Right (and Wrong) for Alibaba StockAlibaba Group has had some headwinds in 2019. The trade war has pressured consumer and business confidence in China, as several companies have noted in recent months. Protests in Hong Kong have only added to the geopolitical risk, and likely led to Alibaba's decision to delay its listing on the Hong Kong exchange. * 7 Deeply Discounted Energy Stocks to Buy Major shareholder Altaba (NASDAQ:AABA) is liquidating its Alibaba stock. According to Alibaba's second quarter release, that company (formerly Yahoo!) sold almost 10% of Alibaba shares outstanding between May 20 and August 9.There are pressures on the business and pressures on the stock. And yet Alibaba has posted strong back-to-back earnings reports. Revenue increased 51% year-over-year in the fiscal fourth quarter (ending March) and another 42% in Q1. Adjusted EPS handily beat Street estimates in both quarters.Meanwhile, BABA stock hasn't exactly soared -- but it's held up. The stock bounced from levels around $150 in late May, amid the Altaba selling, and has neared $180 three times in the past few weeks.Given those external pressures, the case for BABA stock here is that in a tough environment, investors still were happy to buy and/or own shares. So what happens when that environment gets better? After all, Altaba's liquidation is likely over at this point. The trade dispute should be resolved at some point, even if that point isn't necessarily anytime soon. Put another way, it seemingly only can get better for Alibaba Group, and for Alibaba stock, from here. Long-Running Concerns About BABA StockThe catch is that for some investors, it's not going to get better for BABA stock. To bears, Alibaba has significant structural problems. Its VIE structure -- shareholders actually own a piece of a variable interest entity in the Cayman Islands, not Alibaba itself -- makes BABA a no-go for some investors.Accounting issues have long dogged the company. They were raised again in the decision to go forward with the Hong Kong listing. As I noted at the time, it was strange for Alibaba to sell stock at seemingly cheap prices to raise capital when it had plenty of cash already. Indeed, the company is paying $2 billion to acquire Kaola from NetEase (NASDAQ:NTES), a deal it is financing from cash on hand. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off There have been worries about self-dealing, highlighted by Alibaba's move of Alipay to former CEO Jack Ma. And many investors ignore Chinese stocks altogether, worried about a "hard landing" or, worse, an implosion of the economy still run by a nominally Communist single party. Can Alibaba Group Stock Finally Rally?Those skeptics admittedly could be wrong. "Hard landing" predictions, for instance, have been made for at least this entire decade. The VIE structure could change once Chinese regulations do. And, to at least some extent, a 20x forward P/E multiple incorporates those risks.But at least for now, those skeptics and that skepticism seem to matter. They're at least one reason why a proverbial lid has stayed on BABA stock. (Shares at this point haven't moved for two years now.) They're why, to some investors, Alibaba stock seems like a generational opportunity: an e-commerce leader in a country with over a billion citizens trading at a discount to many U.S.-based large caps with minimal growth. Other investors simply see the stock as a trap at almost any price.If the news around Alibaba stock gets better, particularly with the Altaba overhang gone, BABA stock has to rally. Otherwise, BABA starts to look like a stock that looks cheap - and will always look cheap, given the structural risks assigned by the market. As bearish as I've been on BABA, I can see that path to $200+. If Alibaba stock doesn't take that path, however, it might be time to worry.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post If Alibaba Stock is Going to Rally Again, Now is the Time appeared first on InvestorPlace.
We reasoned that Chinese citizens will respond to the trade war by increasingly spending money on products made in their own country, eschewing foreign goods when possible. That bet paid off.
When it comes to investing, my focus is generally on the fundamentals. But sometimes the charts are just too obvious to ignore.Source: Michael Vi / Shutterstock.com This is the case with JD.com (NASDAQ:JD) stock. A glance at the chart shows that there is stubborn resistance between $30 and $31. This has been the case since early March.Now there should be a breakout -- whether on the upside or downside -- right? I think so. And my guess is that it will be on the upside.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's encouraging that the company has been able to overcome some of its challenges, particularly with CEO Richard Liu. Keep in mind that he had been the source of much drama. During a trip to Minnesota, he was accused of rape. Although prosecutors did not press sexual assault charges on Liu, he was later accused in an April 2019 civil lawsuit. He had also called some of his employees "slackers." This was in response to the emerging discontent in China with long work hours (known as "996," which refers to a six day work week that has a daily schedule of 9 a.m. to 9 p.m.).But the good news is that Liu has been able to keep a low profile lately. And let's hope this continues. The Pros and ConsI know there is a lingering issue: the U.S.-China trade war. This is certainly creating lots of uncertainty and weighing on growth.Yet the irony is that the situation may ultimately benefit JD.com. After all, the company is mostly focused on China's domestic economy. So as the government continues to juice up the stimulus, this should help with consumer demand. * 7 Best Tech Stocks to Buy Right Now Another key is that -- even with the falloff in trade -- the Chinese economy is still growing at a rapid clip of about 6% annually. Oh, and there are some other driving forces like these: * The middle class is forecasted to hit 600 million by 2022. * About 90% of the growth in gross domestic product is coming from domestic consumption. * By 2021, the e-commerce market is expected to go from $470 billion to $840 billion. The JD.Com StrategyNow JD.com faces intense competition. Its rivals are not just large players like Alibaba (NYSE:BABA) and Pinduoduo (NASDAQ:PDD). There are also an increasing number of fast-growing startups.Despite all this, JD.com has some important advantages. For example, the company has built a sophisticated supply chain and logistics infrastructure that allows for quick shipping. It's straight from the playbook of Amazon (NASDAQ:AMZN). Note that JD.com has major fulfillment centers in seven cities and about 600 warehouses. It also has geographic coverage in nearly all counties and districts in China.Next, JD.com has been smart to pursue an aggressive partnership strategy, which has helped leverage growth. It has a deal with Tencent (OTCMKTS:TCEHY) that boosted digital distribution, as well as a strategic investment from Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). JD.com has also entered a deal with Walmart (NYSE:WMT) that has provided much more brick-and-mortar coverage. The Bottom Line on JD StockNo doubt, JD.com has been very busy. And the latest quarterly report shows that its investments are starting to pay off. Revenues jumped by 23% to $21.9 billion, with strength in the categories of home appliances, electric devices and general merchandise. As for annual active customer accounts, there was an increase of 3.5% to 321.3 million. There was also an improvement in margins as the company continues to benefit from disciplined cost management and scale.These results, though, are probably not a one-off. Given the company's strengths, it does look like the growth momentum should continue. And yes, this should go a long way in helping JD.com stock break out of its range.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post JD.com Shares Look Ready to Break Out appeared first on InvestorPlace.
SHENZHEN, China/SHANGHAI, Sept 6 (Reuters) - For over a decade, manufacturer Matsutek plied away at building its business with big Western brands, supplying firms such as Philips and Honeywell with products made in its Chinese factories for the U.S. and other overseas markets. Sales of Masutek's products in the United States plunged by a fifth last year in the wake of 25% tariffs on Chinese goods, forcing it to shut down two of its 11 assembly lines - all located in mainland China. Already disenchanted with the U.S. market after a legal battle with rival iRobot Corp in 2017, the tariffs were the last straw and in December Matsutek switched its focus to its own "Jiaweishi" vacuum cleaners - promoting them on Alibaba's Tmall and Pinduoduo's e-commerce platforms.
(Bloomberg) -- Alibaba Group Holding Ltd. bought NetEase Inc.’s Kaola e-commerce platform for about $2 billion and invested in its music streaming service, forging a rare partnership between two of China’s largest internet giants.The deal hands Alibaba the biggest Chinese online marketplace for foreign brands after its own Tmall Import and Export. Kaola will now operate independently but under new Chief Executive Officer Alvin Liu, a Tmall veteran. Separately, Alibaba and billionaire co-founder Jack Ma’s Yunfeng Capital will invest $700 million in NetEase Cloud Music. NetEase remains the controlling shareholder of its music app.Alibaba and NetEase -- both based in the prosperous eastern city of Hangzhou -- have long fought social media titan Tencent Holdings Ltd. across several fronts but the landscape is shifting. The emergence of Tencent-backed rivals like Pinduoduo Inc. is testing Alibaba’s dominance of retail. NetEase has long been a distant runner-up to Tencent in gaming and now also music streaming, while Alibaba has its own music app Xiami. The sale of the low-margin Kaola platform now allows NetEase to focus on its bread-and-butter gaming business.“NetEase can further optimize its costs while Alibaba strengthens its leadership in cross-border e-commerce,” Thomas Chong and Ken Chong, analysts at Jefferies, wrote Friday. “On the other hand, we believe NetEase Cloud Music can benefit from potential synergies with the Alibaba ecosystem.”Read more: Tencent Music Dives as Watchdog Probes Its Record-Label TiesThe Kaola deal creates a dominant bazaar for consumers seeking foreign labels and goods. Alibaba and Kaola, which is loss-making on an operational level, controlled almost 60% of all transactions on China-based platforms for foreign brands in the second quarter, according to research firm Analysys.It also deepens a seeming alliance. NetEase founder William Ding and Alibaba CEO Daniel Zhang exchanged good-natured banter during a long TV interview aired in China just last month. Asked about their rivalry, Ding joked: “Many of our employees might be husbands and wives.”What Bloomberg Intelligence saysAlibaba’s $2 billion acquisition of Kaola, NetEase’s cross-border e-commerce platform, will make it the go-to channel for Chinese consumers seeking high-quality foreign products.\-- Vey-Sern Ling and Tiffany Tam, analysts-- Click here for the researchThe investment will prove welcome to NetEase, which like Alibaba has grappled with rising content costs.NetEase Music most recently raised $600 million in November when Baidu Inc., General Atlantic and Boyu Capital participated in a fundraising round. The latest capital injection comes after China’s antitrust authority launched a probe into its much larger rival, Tencent Music Entertainment Group, over its licensing practices. Under government pressure, Tencent Music and NetEase Music last year agreed to relicense more than 99% of their music catalogs to each other.“What really matters is the 1% exclusive content,” said Shawn Yang, a Shenzhen-based analyst with Blue Lotus. “Now that NetEase has new funding that can be used to buy copyrights, it will definitely be a threat to TME.”(Updates with analysts’ comments in the fourth paragraph)To contact the reporter on this story: Zheping Huang in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
SHENZHEN, China/SHANGHAI (Reuters) - For over a decade, manufacturer Matsutek plied away at building its business with big Western brands, supplying firms such as Philips and Honeywell with products made in its Chinese factories for the U.S. and other overseas markets. Sales of Masutek's products in the United States plunged by a fifth last year in the wake of 25% tariffs on Chinese goods, forcing it to shut down two of its 11 assembly lines - all located in mainland China. Already disenchanted with the U.S. market after a legal battle with rival iRobot Corp in 2017, the tariffs were the last straw and in December Matsutek switched its focus to its own "Jiaweishi" vacuum cleaners - promoting them on Alibaba's Tmall and Pinduoduo's e-commerce platforms.
Analysts are debating whether the volatility and general market weakness in the markets will continue in September. Today, I would like to discuss the prospects of JD.com (NASDAQ:JD), China's largest eCommerce company by revenue. Year-to-date, JD stock is up over 45%.Source: Michael Vi / Shutterstock.com In other words, despite the trade war, Chinese consumers are spending money. Currently, the JD.com share price is hovering at around $30. I believe this level will continue to act as resistance in the coming weeks. Let us take a look at how the rest of the year may shape up for JD stock. How JD.com Stock Makes MoneyJD.com, a member of the Fortune Global 500, offers investors the possibility to invest in the growing Chinese consumer economy. Online shopping represents about 35% of China's total $5.5 trillion retail market, and JD.com has a 25% share of the online retail market.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe group also has hundreds of warehouses and thousands of delivery stations as well as fresh food stores across China. JD takes on inventories and handles logistics as a direct retailer. This approach requires more capital and higher costs. However, it also enables JD.com to have more control over the customer experience than its rivals, including Alibaba (NYSE:BABA) and Pinduoduo (NASDAQ:PDD).In August 2018, JD.com and Walmart (NYSE:WMT) jointly invested $500 million into Dada-JD Daojia, an online-to-offline grocery business which is part-owned by JD.com. In other words, the group is aiming to differentiate itself from the competition by investing heavily in its logistics business. * 7 Best Tech Stocks to Buy Right Now Moreover, JD also makes money from third-party sales of other merchants that use JD's massive warehouse and logistics operations.On Aug. 13, JD.com reported Q2 earnings and showed healthy growth. Its non-GAAP quarterly earnings came in at 0.36 Chinese yuan, or 5 cents per U.S.-listed share. JD.com stock's net revenues increased by 23% to hit 150.28 billion Chinese yuan, or $21.28 billion.Management highlighted the fact the eCommerce platform saw rising demand for big-ticket items, such as electronics and home appliances.In the last quarter, JD.com's number of annual active customers, i.e., those who made a purchase over the past year, grew 2% to reach 321 million. Investors also noted that Prada, the leading Italian fashion house, agreed to open first-party flagship stores on JD.com.Although management did not provide any bottom-line guidance for Q3, JD.com expects revenue to increase by 20%-24% annually in the third quarter. JD.com Faces Competition in ChinaJD.com faces increasing competition from other Chinese companies. Its main rival is Alibaba, whose Tmall and Taobao platforms are China's largest online business-to-consumer and consumer-to-consumer marketplace, respectively.When BABA stock announces its quarterly results, there is always a corresponding big move in the price of JD.com stock, too. As of the end of Q1, Alibaba has over 727 million monthly active users (MAUs) and is in the lead in China.Pinduoduo is also increasing its marketshare in the country. It a young eCommerce platform that focuses on group buying. PDD stock has recently reported strong Q2 results and the stock has seen new highs as a result. At the end of Q1, its MAU numbers were almost 300 million. Many analysts now believe that Pinduoduo, the underdog, is on the road to catch up to both JD.com and Alibaba.JD stock is a growth name that trades on forward sales as well as the momentum provided by future expectations. In the past few months, China's industrial and manufacturing sectors have contracted. Yet analysts are hoping that consumer spending will continue to hold up well. Therefore the uncertainty regarding the Chinese economy may continue to affect investor sentiment in the short-run.On a final note, I am a bit concerned about JD.com stock's quick ratio of 0.91. This ratio demonstrates the ability of the company to cover short-term liquidity needs.In other words, the group may be in a somewhat difficult position to weather any serious headwinds due to an economic slump in the short-term. As a comparison, Alibaba stock's current ratio stands at 1.38. Long-Term Catalysts for JD.com StockIn June 2018, Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Google announced that it would invest $550 million in JD.com. Both companies stated that the combined synergies would enable them to collaborate on various eCommerce and technology-related areas.Under the agreements, Google received "27,106,948 newly issued JD.com Class A ordinary shares" at a price that equated to "$40.58 per American depository share." This cooperation between the two companies is likely to benefit both of them in the years to come. Yet so far, JD stock price hasn't shown any benefit.Although the Chinese economy may slow further in 2019 or 2020, China's GDP is still expanding at an average annual rate of at least 6%. Recessions hurt consumers in general, but they don't outright kill consumption. China's growing middle class will continue to drive increases in the country's consumer spending and the expansion of China's eCommerce market. When Chinese citizens have more disposable income, they can spend more money on online shopping sites like JD.com.China's economic fundamentals have vastly improved over the past decade. The internet population is still booming. And money continues to pour into Chinese companies operating in this space. These factors are likely to help support the long-term durability of JD stock.On Aug. 12, JD share price closed at $27.16. On Aug. 19, the stock hit a recent high price of $32.28. In other words, Wall Street was clearly pleased with the recent earnings results. Investors now seem more confident that in quarters to come, JD.com will continue to grow its revenues and the bottom line. So Should Investors Buy JD Stock in September?JD stock and many of the other Chinese companies listed on U.S. exchanges enable investors to benefit from growing Chinese consumer spending. However, the next several weeks may bring more volatility in JD shares. And I do not expect to witness a major favorable sentiment shift toward Chinese stocks.In the next few weeks, trading in JD stock is likely to be choppy with both widely up and down days. JD.com shares are likely to trade between $25 and $30.Short-term investors should be ready for daily price swings in these Chinese stocks such as JD. Long-term investors may see any further price declines as opportunities to go long.I think JD.com is still one of the best stocks China has to offer, and it could easily find a place in investors' portfolios if they're in it for the long haul. Within a few years, I expect JD stock to easily reach the lower $40's level, or the price Google paid for the shares in 2018.As of this writing, the author did not own shares in any of the companies mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Best Tech Stocks to Buy Right Now * 10 Mid-Cap Stocks to Buy * 8 Precious Metals Stocks to Mine For The post JD Stock Is in a Holding Pattern for Now, but It Won't Last Forever appeared first on InvestorPlace.
(Bloomberg) -- Baidu Inc. has once again lost its spot among China’s five most valuable internet companies, this time elbowed out by much younger rival Pinduoduo Inc.The four-year-old e-commerce startup PDD is now worth more than Baidu after its shares surged 8.7% in New York on Thursday. That puts it among China’s Top 5 internet companies in market value, trailing the likes of rival JD.com Inc. and food delivery service Meituan. Baidu has been pushed to sixth place.It’s not the first time that Baidu dropped from the Top 5. NetEase Inc., China’s second-largest gaming house, briefly overtook the local internet search leader in market value earlier this month. Baidu’s shares later recovered after it posted stronger-than-expected second-quarter results. The company has shed about $63 billion of capitalization since its peak in May 2018, or roughly equivalent to one Caterpillar Inc.Once touted as a member of China’s internet triumvirate alongside Alibaba Group Holding Ltd. and Tencent Holdings Ltd., Baidu is grappling with a slowdown in China’s economy and is facing intensifying competition for advertising from app factory ByteDance Inc. That popular social media giant recently launched its own Google-like general search engine, posing a direct challenge to Baidu’s core business.PDD has experienced meteoric growth since its inception. The shopping app, known for cheap deals and gamified purchasing experiences, is luring new users from China’s rising middle class while investing in its own logistics network -- areas currently dominated by rivals Alibaba and JD.com.To contact the reporter on this story: Zheping Huang in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Tariffs on billions of dollars' worth of goods are making it more expensive for Chinese manufacturers to sell their goods to the United States. According to Chinese Customs data, Chinese exports to the United States have fallen for eight straight months. However, can JD.com (NASDAQ:JD) actually benefit?Source: Michael Vi / Shutterstock.com This leaves Chinese manufacturers scrambling to keep factories productive. To recover these lost sales, they are setting their sights inside their home country. Chinese Manufacturers Are Seeking Local BuyersBased on their earnings report, JD.com is helping to fill this void. In an interview with CNBC after the e-commerce giants second-quarter earnings call on Aug. 13, CFO Sidney Huang confirmed, "Given perhaps the trade tension, more and more manufacturers will actually turn their attention to (the) domestic market."InvestorPlace - Stock Market News, Stock Advice & Trading TipsHuang went on to say,"This is a phenomena actually already happening for quite some time, slowly, that there are excess capacities for those manufacturing facilities, … there are a lot of very, very low-priced products at good quality they used to produce (as) branded products for global brands. So we think it's a good opportunity for us to reach down to those quality manufacturers, so we can provide those products at a really good value to our consumers."CEO Richard Liu expanded on these comments. According to Liu, JD.com is interested in increasing its investment to the growth of small Chinese cities. And with a growing logistics network, JD.com has the resources to make this happen. * 10 Monthly Dividend Stocks to Buy to Pay the Bills Tian Hou, founder and CEO of T.H. Capital echoed these statements pointing out that logistics are JD's strength (their logistics network broke even from an operating income perspective) and if they can, in fact, reach out to these lower-tier cities it could create a moat for their business. The Chinese E-Commerce Market Is Very CompetitiveHowever, price concerns may make it difficult for JD.com to sell their products in these lower-tier cities. They also are facing competition with other Chinese e-commerce companies. Although frequently compared to Alibaba (NYSE:BABA), JD.com's business model is much closer to rival company Pinduoduo (NASDAQ:PDD). PDD is making some headway in these lower-tier cities, but JD.com is quick to mention that Pinduoduo targets a much lower segment of the market than JD.com. JD Stock Is on the Rise After a Huge Earnings BeatThe Chinese online retailer posted a second-quarter earnings report that blew away expectations. The company posted a non-GAAP EPS of 33 cents. The consensus estimate was for an EPS of 8 cents. The news was equally good for GAAP EPS that came in 13 cents above the consensus estimate. The company also beat revenue expectations, citing a 22.9% YoY increase to $21.9 billion.Equally, if not more importantly, JD.com reported a sharply increased margin. This corresponded with company management raising their adjusted net income guidance to between 8 billion yuan and 9.6 billion yuan for the full year. JD had reported full year losses to this number for the past three years.Shares rose 13% the day after the earnings report, adding about $5 billion to JD.com's market cap.A closer look at the numbers shows that JD.com is finally benefiting from the investments it has made in technology. In addition to their logistics network (noted above), this infrastructure includes a push into artificial intelligence, drone delivery service, and the company's plans to open one million convenience stores "the supermarket of the future" over the next few years. Investors Have Seen This Before With JD StockJD.com has a history of being able to post a great earnings report when it needs to. But frequently, a positive report is followed up by one or more quarters in which the company misses. Is this time different? Two good signs are an improved margin and evidence that the company is reaping the benefits from investments in their operational efficiency.Analysts have a consensus buy rating on JD.com stock. However a consensus price estimate of $33.02 is less than a 6% increase from current levels. Does this mean analysts are hedging their bets? Perhaps. However, with no clear sign of an end to the trade war, JD stock seems like a safe bet. As long as they have enough differentiation to separate themselves from discount e-commerce sites, JD.com may continue to be a winner in the trade war.As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 "Boring" Stocks With Exciting Prospects * 15 Cybersecurity Stocks to Watch as the Industry Heats Up * 5 Healthcare Stocks to Buy for Healthy Dividends The post Is JD.com Stock a Winner in This Trade War? appeared first on InvestorPlace.
China's rising star in e-commerce is not in a hurry to expand beyond its home market, says its head of strategy, David Liu, as the company continues to find lots to do with nearly half a billion users in China.
Alibaba stock dropped 1.90% on August 22 after a 1.11% fall on August 21. The decline came after its competitor Pinduoduo reported strong earnings results.