JD.com (JD), mcap=$92bn, price $59.35 vs $63.00

$JD pitch:
– China’s largest online retailer with $500bn in GMV.
– In a way China’s $AMZN.
– 30% market share in B2C retail eCommerce.
– Healthy and cash-generative business, but with very thin margins.
– True cash earnings power is not accurately reflected due to continued investment in the business flywheel (scale, more affordable drives, faster deliveries, wider product selection).
– Sold off due to concerns about China’s government’s treatment of leading enterprises.

$JD valuation:
– With 13.5% revenue CAGR and assuming 7% FCF margins, would be producing $25bn in FCF by 2028.
– Today trades at 2.7x EV/FCF for 2028.
– In 2021 financials trades at 16.5x FCF and 104x OI.

Exp. gain: Not specified.

Full $JD write-up (free guest account required):

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