3 Chinese technology stocks forecast 2025: JD PDD and BZUN

Forget Alibaba（BABA)! These 3 Chinese technology stocks are more worth buying

　　 Hello everyone, Alibaba is China's largest e-commerce and cloud company. From January to late May, Alibaba's market value has shrunk by nearly 10%, lagging behind many peers. Antitrust investigations in China, stricter auditing standards in the United States, and funding from growth stocks to value stocks have all dragged down Alibaba's stock price.

　　 Alibaba’s stock is trading at an expected price-to-earnings ratio of 18 times, which may seem cheap, but analysts still expect Alibaba’s earnings to fall by 3% this year because it has absorbed a record US$2.75 billion in antitrust fines. It also needs to stop exclusive deals with big brands, which may weaken the company's defenses against smaller e-commerce markets.

　　 But this is not all. Alibaba may be forced to divest media assets and share user data with the government, and the group's financial technology subsidiary Ant Group, as a financial holding company, will be subject to stricter supervision. Alibaba may be able to withstand all these headwinds and recover for a long time, but the company's stock may still be dead money in the foreseeable future.

　　Investors should not bet that Alibaba may make a comeback, but should consider buying Chinese technology stocks that are not under supervision. These three e-commerce companies meet the requirements: JD.com, Pinduoduo, and Baozun.

　 1. JD.com(JD)

　　JD is the second largest e-commerce company in China after Alibaba. However, it is actually the largest direct retailer in the country because most of its revenue comes from the company's first-party market.

　　 Unlike Alibaba, most of Alibaba's e-commerce revenue comes from third-party sellers on Taobao and Tmall. Jingdong is responsible for inventory and fulfills orders through its own logistics network. This business model is more capital intensive, but it can protect buyers from counterfeit products.

　　 Alibaba co-founder Jack Ma once said that JD.com’s low-profit business model will end in "tragedy", but economies of scale gradually come into play to enable JD.com to generate sustained profits. JD’s logistics department also balances costs by providing services to third-party customers.

　　 In 2020, JD’s revenue and adjusted profit increased by 29% and 57%, respectively. The company has nearly 500 million active consumers in the first quarter of this year, and analysts expect JD.com's revenue and profit to grow by 26% and 13% respectively this year.

　　JD.com is not facing regulatory heat like Alibaba. Its profit margin is expanding. The expected price-to-earnings ratio is only 28 times and the market-to-sales ratio is less than 1 time.

　2. Pinduoduo(PDD)

　　 Pinduoduo is the third-largest e-commerce company in China, but in terms of total shoppers, it is actually bigger than JD.com, with 628 million active buyers every year. Like Alibaba, Pinduoduo generates most of its revenue through third-party merchant listing fees and advertising.

　　Pinduoduo has opened up a niche market in the discount market, encouraging shoppers to form groups to enjoy group discounts. This strategy relies heavily on users to share links on social networks and is popular in low-end cities in China.

　　Pinduoduo subsequently expanded to China's top cities and cooperated with big brands to challenge Alibaba and JD.com. It has also gained a first-mover advantage in online agriculture by helping 12 million farmers ship products directly to customers.

　　Pinduoduo's revenue surged 97% in 2020 and then increased by 239% in the first quarter of 2021. Analysts predict that the company's full-year revenue will grow by 92%. For a stock that trades at 8 times this year's market-to-sales ratio, these estimates are impressive.

　　 Pinduoduo is still unprofitable because of aggressive discounts, subsidies for sellers, and the company's logistics network expansion. However, the company's adjusted operating and net losses narrowed year-on-year in the last quarter. As the scale expands, the company may gradually become profitable.

　3. Baozun e-commerce(BZUN)

　　 Baozun is sometimes referred to as the "Shopify of China", but this comparison is misleading. Unlike Shopify, which provides self-service e-commerce services for small businesses, Baozun mainly provides end-to-end e-commerce solutions for large international companies.

　　 For large American companies, it may be difficult to establish a Chinese website, carry out marketing activities, and establish an e-commerce market, so Baozun is a "one-stop" store that can meet all these needs. It also helped companies integrate their online marketplaces with Tmall, JD.com, and Pinduoduo, which enabled Baozun to play a balancing role in China's booming e-commerce sector.

Baozun’s business model is capital-intensive, but in recent years, it has shifted from a “distribution-based” model of direct fulfillment of orders to a “non-distribution”-based model, thereby expanding profit margins and allowing Baozun’s customers to directly sell products. Ship to their customers.

　　 Baozun’s 2020 revenue and adjusted earnings will grow by 22% and 50%, respectively. 92% of the company's website transaction value comes from a non-distribution business. Analysts expect the company's revenue and adjusted earnings to grow by 35% and 5% respectively this year.

　　 This often-overlooked stock has a price-to-earnings ratio of only 19 times and a price-to-sales ratio of 1.5 times this year. If investors fall in love with Chinese technology companies again, this may make it an undervalued growth stock. The above analysis is only a personal opinion and does not constitute any investment advice. The stock market is risky and investment needs to be cautious.

Comments

Shopify stock forecast 2025：Is it worth buying?

In the last year, the stocks rose relatively well. Another sector is e-commerce. Whether it is Amazon, Alibaba, JD.com, Pinduoduo, SEA or vertical e-commerce platforms Etsy and Chewy, all of them have experienced huge gains, while another category has benefited from the e-commerce sector. The company is a website building tool company such as Shopify BigCommerce Holdings. Today I will talk about shopify, the leader of website building tools. First, let's briefly talk about shopify's business model. To put it simply, shopify is a fool-like website building platform. In the past, when a company wanted to build a corporate website, it generally needed to find a dedicated person to design and maintain the website. If you want to add shopping functions to the website, the cost of building the website will also increase. This is true for many small businesses and individual businesses. A very difficult thing. Shopify uses the SAAS model to provide websit...

Why has international oil(USO) prices plummeted?

As OPEC and Russia failed in negotiations and could not reach an agreement to reduce production, Saudi Arabia issued a comprehensive production increase announcement. Russia followed Saudi Arabia to increase production. Due to the sharp increase in oil supply, international oil prices plummeted, and US stocks were affected by the spread of the epidemic, and international oil prices The plunge, the U.S. stock market plummeted, triggering multiple fuses. S&P500 Index Oil is a commodity whose price is affected by supply and demand. When oil production increases, supply increases, prices fall, and at the same time affected by the epidemic, demand decreases, and prices also fall. Oil supply increases and demand decreases, which is the main cause of the plunge in international oil prices. In terms of oil supply, since the United States developed shale oil, US oil production has become the world's largest. The production cost of shale oil is more than US $ 40, which is the ...

The stock market entering a bear market？

On March 6, 2020, the US stock market continued its decline today after a few days of rebound. Is this the beginning of a bear market in the stock market? Next, let's analyze one important indicator of entering the bear market, Treasury bonds yield. What is the yield of Treasury bonds? Treasury bonds are a tool issued by the state to raise funds. When the bonds are issued, they promise to repay the principal and interest on a specified date. The ratio of the return of Treasury bonds to the principal invested is the return of Treasury bonds. The main factors affecting bond yield include coupon rate, maturity, face value, holding time, purchase price, and sale price. Rising bond yields and falling bond prices mean investors are selling bonds, turning to invest activities, or entering the stock market. In a healthy economic environment, the longer the Treasury bonds, the higher the bond yield. Because short-term bonds are more liquid, investors are willing to accept lower ...

The era of negative US interest rates coming?

Recently, the US Federal Reserve suddenly cut interest rates and US stocks fell sharply. Most investors believe that the ten-year bull market for US stocks has ended. In terms of the US dollar index, after a period of decline, the US dollar index rebounded sharply, indicating that risk aversion was high, and market funds were flowing to the US dollar to hedge. The Fed ’s interest rate cuts have not saved the US stock market. The Fed ’s interest rates are now very low. If the Fed continues to cut interest rates in the future, the United States will soon enter the era of negative interest rates. Take Europe and Japan as examples. Negative interest rates have not restored the country ’s economy. The future economic situation of the United States is not optimistic. The reason for the negative interest rate is that the investment must be profitable, otherwise, it will not be invested. If the profit is low or loss, the investor will directly deposit the profit to the bank. When socia...

Many companies will China close in 2020?

Starting in March, all walks of life in China began to resume work. People stayed at home for more than two months. Many people's moods changed from tension to leisure, and now they are anxious. It's not just the bosses who are anxious. Many employees find that their rents and mortgages are still being paid, the holidays are extended, they can't go to work, and their salaries aren't. Whenever there is no money it is a big problem. More than 700 companies closed down in February, but getting fewer wages is also better than the company suddenly closing down. In February, more than 700 companies have closed down, and this number should be exceeded. Statistics show that more than 55% of catering businesses in China have resumed work, but compared to the same period last year, affected by the epidemic, 78% of catering companies have lost more than 100% of their operating income, and another 16% of them have lost over 70%. This year's sudden outbreak, the impact...

10 stocks tell you why U.S. stocks plunged!

On February 24, 2020, the U.S. stock market plummeted by 1,000 points. Since the outbreak of the new coronavirus epidemic, although market funds have already begun to flow into safe-haven assets such as gold and bond markets, the epidemic does not seem to have an impact on the stock market trend. As the new coronavirus epidemic spread further, and companies began to publish performance reports, investors began to worry that the epidemic would affect the company's next quarter's profit growth and made predictions for the company's next quarter's performance. Analysts lowered the companies The profit forecast for the next quarter, and the Fed is expected to cut interest rates in March, the Fed's rate cut indicates that the economy may further decline. S & P 500 Index Fed watch As an investor, you need to know how to value a company using PEG indicators. Generally speaking, the valuation using the PEG indicator is more accurate, but it is only used t...

The Federal Reserve implements interest rate hikes or cuts？

Generally speaking, the Federal Reserve implements interest rate hikes or cuts. Interest rate rises are austerity monetary policies, and interest rate cuts are a loose monetary policy. When the rate hike cycle begins, it indicates that the Federal Reserve is optimistic about the future economic outlook, economic data shows a positive outlook, and market sentiment is optimistic. To avoid excessive economic growth, the Federal Reserve has implemented austerity monetary policy and implemented interest rate hikes. When the interest rate cut cycle begins, it means that the Federal Reserve is bad on the future economic outlook, the economic data shows a bad trend, and the market is pessimistic. To stimulate economic growth, the Federal Reserve has implemented a loose monetary policy and implemented interest rate reductions. Correlation between the S & P 500 and Federal Reserve interest rates Historical data from the S & P 500 shows that when the rate hike cycle begins, the sto...

The five stages of company growth!

company Many people who study stocks will analyze the fundamentals of the stock, such as viewing its performance report, PE, PB, PEG, debt ratio, dividend ratio, cash flow, ROE, EPS growth, etc. I don't know if you tried it. After performing many basic analyses, you will feel that the prospects for a particular stock are very good. You have even read the analysis reports of many large banks, or listened to the analysis of many market participants and obtained a consistent high evaluation. Then, you will think that this stock will grow in the future, so you buy it and think that you can use this stock to create a better future from now on, and the final development of the story is the opposite of the fact that the development direction will eventually Put you in trouble or lose money. I will not deny the importance of basic analysis, because, in addition to focusing on technical analysis, I am also very concerned about the company's basic factors. I am an investor fo...

When did the economic bubble burst?

the economic bubble In addition to the recent ups and downs in the stock market, a lot of things have happened in the financial sector, including a series of bail-out measures including major central banks, the liquidity test of the bond market, and even more, terrible data show that even Wall Street hedge funds, everyone Confused about the current situation. The bubble-filled world of financial assets has triggered a domino effect. The Fed experienced a repurchase that began in September 2019. After a shortage of market funds, it has been printing money to save the market. The crazy bailout should be temporary. Until February 14, 2020, the Fed issued a statement saying that it will gradually reduce the bailout to the repo market from 120 billion to 100 billion per day, and will seize the market for 14 days of repurchase from 30 billion to 20 billion. This move may bring liquidity pressure to the market. In turn, it will cause turbulence in the stock market, I did not expect this...

My long-term stock market trading strategy!

trading strategy As a stock market investor, everyone has an investment trading strategy. Through my many years of investment experience, I have tried different investment strategies, used different investment tools, and concluded my own set of investment strategies. This is a long-term investment strategy, not a short-term one. For ordinary investors, how to cope with the big ups and downs of the stock market, and by sharing my investment trading strategy, I hope that it can help investors and enable the asset portfolio to add value steadily. First, when the stock market is at different stages, I will use different coping methods. There are usually three stages in the stock market, and I generally use three different approaches. First, the stock market is in a rising phase. I usually do not use leveraged instruments or make financial loans to trade. Although leveraged trading can make quick and large profits, it can also make quick and large losses. When trading wi...

FinanceLinkway

Search This Blog