JD.com: Add To Cart While China's On Sale

JD.com (JD) is rated STRONG BUY, with a $40–41 target (50–54% upside), with ample room to revise higher. Retail margins have improved for thirteen straight quarters, while food delivery losses are inflecting and narrowing rapidly. JD returns 10% of market cap annually via buybacks and dividends, supported by cash covering 87% of market cap. Capital rotation out of the crowded AI trade in Korea is likely to benefit undervalued Chinese internet stocks. Key risks include potential re-escalation of food delivery losses and lack of demand-side stimulus from the July Politburo.

JD.com is China's largest direct e-commerce retailer. In this article, I discuss why I think JD is a STRONG BUY at current prices. First, the stock is priced as if earnings will