Skip to main content

3 Chinese technology stocks forecast 2025: JD PDD and BZUN

 JD

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. 

Labels:

Comments

Post a Comment

Popular posts from this blog

Investors have begun to switch back to traditional growth stocks

 On Thursday, the stock prices of Cisco, Alphabet, and IBM hit new highs. But more importantly, the previously unpopular speculative growth stocks, including stocks bought by many ARK funds, have now begun to rebound.  How is this going?  Investors' perspective on the market is changing. In the first quarter of this year, mainstream voices in the market believe that the economy will restart strongly, bond yields will rise, and inflation may become a problem later this year. After the end of the first quarter, these expectations were only partially fulfilled.  The U.S. economy has indeed restarted strongly, but bond yields fell in the first quarter instead of rising because investors began to believe:  1) Inflation and supply chain disruption may indeed be "temporary", as the Fed insists;  2) The second and third quarters will be the highest points of stock returns and economic growth.  Alec Young, a chief investment officer of Tactical Alpha, said: “...
Post a Comment
Read more

7 great investors' operating strategies to deal with the stock!

No one can be 100% sure about the outlook for the US stock market. Instead of entangled in whether the bull market in US stocks will end, it is better to think about what lessons can be learned from this plunge. Historically, due to the end of the summer market in September, U.S. stocks did not perform well. The plunge on Thursday sounded like a wake-up call for investors earlier. Be careful next week. Although Nasdaq is tolerant of faults The rate is high, but the up-and-down shock pattern has not changed, and there needs to be an established process. Investing in stocks should take a long-term view, have a long-term investment mentality, don't care too much about the rise and fall of one or two days, and don't feel unhappy because of the turmoil of the stock market, which affects the judgment of stock buying and selling. Today, let's take a look at how those familiar investment masters are invincible. The reason why masters become masters is that they have become masters ...
2 comments
Read more

INTC stock forecast 2025: Intel's acquisition of SiFive

SiFive, a chip design start-up company based on the RISC-V instruction set architecture, has received an acquisition intention from investor Intel.  A person familiar with the matter, who asked not to be named, said that Intel has offered to buy SiFive for more than $2 billion.  RISC-V with x86 and Arm  As we all know, Intel dominates the industry leader in x86 architecture chip technology, while SiFive focuses on open-source RISC-V technology and employs several founding members of the RISC-V architecture.  For a long time, the field of CPU instruction set architecture has been dominated by x86 and Arm. Since RISC-V was born at the University of California, Berkeley in 2010, it has gradually formed a certain competitive landscape with Arm after more than ten years of development.  With the gradual refinement of the application field, the model of one chip making the world has become a thing of the past. Facing the hot AI and Internet of Things market, RISC-V i...
Post a Comment
Read more

ARKK VS ARKW, ARKQ, ARKG, ARKF, How to choose ARK Innovation ETF?

Which ARK Innovation ETF is best? Let’s perform an Ark ETF review. Today, I will introduce to you the five actively managed ETFs in ARK INNOVATION. Let’s take a look at which types of companies they have invested in so that you can choose the industry you like to invest in. ARK INNOVATION was founded by Catherine Wood. This investment company is a revolutionary and innovative company that specializes in investment. Their company currently manages seven different types of ETFs, five of which are actively managed ETFs, and the other two One is an exponential passive ETF, Simply put, the biggest difference between these two ETFs is that for actively managed ETFs, they will frequently trade the company stocks in the fund, so the proportion of the company he holds will always change, while the index-type ETF is as they think. After purchasing the company, you will not be able to move it again. It is very similar to S&P500 or QQQ, except that the holding company is different. Then let...
Post a Comment
Read more