Briefs on JD's plunge, Not a dip to buy.

$JD.com(JD)$ plunged over 8% yesterday, driven by institutional downgrades and target price cuts. Their main concern is the possibility of negative growth in core retail sales in Q3.

Why negative growth in retail?

1. Weakening overall domestic CPI and deteriorating economic conditions. JD's sales revenue is directly recorded, so price changes have a significant impact on revenue. Unlike $Alibaba(BABA)$ and $Pinduoduo Inc.(PDD)$, who record "service fees," such as commissions, as revenue, so their revenue is not sensitive to CPI.

2. Weak growth in JD's retail advantages. The market share of 3C products is relatively saturated, and growth is limited. Sales of products like Huawei Mate60 will only be reflected after Q4. Additionally, this summer got hot early, so sales of items like air conditioners likely occurred in Q2, resulting in a rather "hollow" Q3. Meanwhile, other fashion and clothing projects have not gained market share.

3. The low-price strategy doesn’t work well. Many e-commerce platforms use "JD prices" for comparison, indicating they can offer discounts, which has left consumers with the impression that JD's prices are high. This issue has persisted, with JD often raising prices and confusing consumers with various discount coupons, unlike PDD's straightforward low-price discounts. It seems that Rechard Liu Qiangdong has not thought deeply about this issue in a down-to-earth manner.

Faced with this environment, the decline from double-digit growth to single-digit growth, and now the expectation of negative growth in Q3, is not surprising at all.

As the saying goes, it's difficult to turn a large ship around, and JD indeed has various problems such as a very redundant organizational structure, low efficiency, and being out of touch. It may require a substantial and bold change. $JD-SW(09618)$ $JD LOGISTICS(02618)$

# Meme stocks "TO THE MOON" Again?

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  • SuperDuper1
    ·2023-10-13
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    JD generated Rmb 33.5in annual cash flow as at June 2023. That translates to 9.2x FCF at US27.00. That is incredibly cheap and the company has very litte debt. This is just a beqr raid.. look at Amazon which also has a low revenue growth and negative FCF.. yet it trades at a much higher PE valuation.


    This is a concerted bear raid, nothing else, with analyats and hedge funds working together spreadifn misinformation.
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  • Nase
    ·2023-10-13
    Why write when the stock drop ? And chat-gpt research?
    If you know about above why dont you write you research earlier?


    You tend to write after the fact which also indicate you are just a financial write who dont know anything about stocks 🍔


    The downgrade by Citi to 43$ is the reason for this however even that thats like 80% upside from current price
    Strong short seller just capitalizing on whatever they can


    Anyhow i am not involved in JD but i own SE and PDD
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  • ColinThorndike
    ·2023-10-13

    I’m invested in Alibaba but also like companies like JD. However, I can’t find why JD is down so much and on such a high volume!

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  • AugustineMac-
    ·2023-10-13

    JD free cash flow $3bn 2023 and getting worse by comparison.

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  • AprilBridges
    ·2023-10-13

    Anyway, I am still believe that next week will be super bullish for JD. If not, than will be later for sure.

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  • BorgPetty
    ·2023-10-13

    next week still will be bullish. Probably not as good as I expected. Just have to wait more.

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  • GriseldaBrown
    ·2023-10-13

    I thought this was the Walmart of China…

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