Theresa Perrin
Self-Directed Investor & Trader, Former Hospice Nurse
JD.com should improve strongly in the second half as strong retail margins, narrowing food-delivery losses, bigger buybacks and an improving Chinese economy lift results. Q2 earnings were mixed but mostly positive, and most analysts keep a buy with a median $39.50 target. The selloff was unwarranted, driven by $30 puts being closed out, and China big-tech earnings over the next couple of weeks could lift it. x.com x.com x.comÂ
JD.com is one of the few China internet names whose 2026 earnings risk skews up, so its multiple can rerate on beats rather than a sentiment recovery. Its logistics-backed retail core has been resilient, quick-commerce losses should narrow as the 2025 investment cycle matures without needing a macro recovery, and international expansion is measured. Overweight with a $38 December 2026 target, 9x 2027 earnings. Risks: share loss to Pinduoduo and Alibaba, margin pressure, a weaker China. x.comÂ
Baidu and Alibaba look primed with Trump visiting China, while JD.com is set up to break its long-term downtrend line. x.comÂ
Alibaba and JD.com have grown far beyond what their flat share prices reflect. Alibaba trades near its 2016 price of about $108 while annual revenue rose from $15.7B to $148.4B, almost 10x. JD.com is back at its 2019 price of about $26.5 while revenue grew from $67.2B to $187.2B, nearly 3x. With both charts finally starting to improve, 100%+ upside is absolutely on the table. x.comÂ
Amazon's weak retail growth has shaken the earlier buy case. Online-store sales rose just 2% year over year, and the retail numbers look so poor that it is no longer clear at what price the shares are a buy. x.com x.com x.comÂ
JD.com's share price should follow its free cash flow, which jumped 599% last quarter, and it has completed a $1B share buyback. x.comÂ
JD.com is mispriced because its equity stakes and holdco net cash alone exceed its market cap, as if JD Retail core did not exist. Analysts fixate on the drag from consolidated New Businesses, which blurs their view. A sum of the parts values JD Retail core on a conservative EBIT multiple after stripping out JD Healthcare and JD Industrials profits, then adds the listed stakes in those two and JD Logistics, equity-method stakes at book value, and adjusted holdco net cash. x.com x.com x.com x.comÂ
JD.com is a mispricing story, not a turnaround: the Amazon of China at a fraction of the valuation. It trades at about 0.2x sales versus about 3x for Amazon, holds $16B in net cash and has a $5B buyback. All 10 covering analysts rate it a buy with an average target near $38; the price target here is $68. x.comÂ
Alibaba, JD.com, Nio and Baidu are criminally undervalued and could act as a hedge in the next broad market downtrend, over a 12-18 month horizon. Fundamentals explain the underperformance: retail sales turned negative year over year and new home sales are down 27%, showing years of PBoC easing have failed to reach the real economy. But that is exactly when the greatest buying opportunities form, much as with semiconductors like AMD in late 2024 and early 2025. x.com x.comÂ
Alibaba is sitting on its 200-week moving average just as China announces a stimulus plan, timing that supports the shares. x.comÂ
Chinese internet stocks could draw renewed attention and a re-rating as President Trump's May visit to China opens a brief honeymoon in US-China relations. Recent geopolitics have left China in a relatively favorable position, the sector sits near a relative bottom, and its largest holdings' fundamentals keep improving. The sector finally moved on Trump's arrival in Beijing. If the talks go well, strength can continue; if they go badly, it will likely fall back and the position would be exited. … Show more