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

VRTX stock forecast 2025: Vertex is undervalued

Let's look at some biotech companies with stable cash flow and currently undervalued value stocks as targets for diversified portfolios. The company I shared today, called Vertex Pharmaceuticals (VRTX), is dedicated to the development of rare diseases, especially Cystic Fibrosis (CF). I have always had high respect for the rare disease group of pharmaceutical companies in the disease category. In addition, in the future, gene and cell therapies are subverting the role of rare diseases in the pharmaceutical industry, making rare diseases no longer uncommon. It's tasteless, but a field full of the future. Vertex Pharmaceuticals Inc. was established in 1989 by Joshua Boger and Kevin Kinsella. is headquartered in Boston. At that time, several very good research and development companies were established in the United States, including the aforementioned Regeneron, Gilead, and today's Vertex. Vertex In the past, he devoted himself to the development of small molecule drugs, wh...

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: “...

Bitcoin crashed! In a word of Musk, the digital currency plummeted!

Ethereum is thriving, what logic? The world's second-largest digital currency, Ethereum, is continuing to challenge the influence of Bitcoin by its "functionality". On the morning of May 13th, the price of Bitcoin plummeted by more than 13% and once fell below the $50,000 mark. As a challenger to Bitcoin, Ethereum fell by about 8% and continued to narrow its decline. The previous day, Ether The market rose by 6% during the intraday session, with a market value exceeding US$500 billion, and its price hitting a record high. In the past 6 months, the price of Ethereum has risen by as much as 8 times, out of the independent market, has far outperformed the continued consolidation of Bitcoin. At present, the share of Ethereum in digital currencies' total global market value has risen to 18%, while the weight of Bitcoin's market value has been cut in the past two years, and the current market value has dropped to 38%. On the morning of May 13, there w...

BABA stock forecast 2025: The failure of Ant Financial's IPO

Ant Financial’s IPO was canceled, causing Alibaba’s share price to fall, Alibaba has been unfavorable this year. First, the cancellation of Ant Financial's IPO indirectly caused Alibaba's stock price to fall, and now there is an antitrust investigation led by Alibaba, which caused Alibaba's stock price to plummet by 15% in a single day. From the highest point in October, the stock price of 319 dollars has fallen by as much as 30% to 222 dollars. From the perspective of K-line, Alibaba has reached the Oversold area, and it will rebound upward in the short term. From the perspective of valuation, Alibaba’s valuation is as high as US$388, which is 74% of the current share price of US$222. Value-added space, so it seems that whether it is viewed from the short-term K-line or the long-term valuation, now is a good time to buy the bottom of Alibaba. Before investing, I will analyze and analyze the root cause of the disadvantage of Alibaba this time, because if this problem is not...

ASML stock forecast 2025: is it time to buy now?

Hello everyone, recently, because the market has a lot of fears about rising interest rates and shrinking the balance sheet, the Nasdaq as a whole has fallen a lot, and each support has basically been broken one after another. The general price has also broken, so there is no good signal to increase positions in the short term. It may be safer to hold cash first and wait until the decline begins to slow down a little or see a really cost-effective price before considering adding positions. However, the long-term bull market in the future will not end because of this year's interest rate hike, and cash will only become more and more worthless in the long run. In the short-term continuous decline of the stock market, we must put our minds in a positive state. At the same time, we must properly organize our thoughts and positions, prepare bullets, and use this time to do our homework for the stocks we are interested in. In this way, when a good price appears in the future, you will be...

Will China's economy recover as the epidemic is under control?

During the Chinese Spring Festival, novel coronavirus broke out in Wuhan, and the Chinese stock market was hit hard. Subsequently, the Chinese government quickly took strict measures to block Wuhan, a city with a population of tens of thousands of people, to prevent the further spread of the epidemic, and to take corresponding epidemic prevention measures in other cities. When the worst of the epidemic had already occurred, the Chinese stock market quickly rebounded. As the number of infections continues to decline, China's Shanghai Composite Index is expected to rise further. Sars Period Looking back on similar events in the past, the SARS epidemic in 2003, the stock market also made a short-term decline, and then the SARS epidemic was brought under control, the stock market immediately went up for a long time. According to past historical data, the impact of the novel coronavirus epidemic on the stock market may be short-lived. China Fund Capital Flow Howeve...

AMD stock forecast 2025: Q2 is expected to perform strongly

Before the US stock market on July 19, US technology stocks continued their decline last Friday, and AMD's stock price also continued to fall. AMD will announce the results of the second quarter of 2021 on July 27. The market expects this performance to be strong, so this round of decline may be a great opportunity to buy the stock. financial indicator Due to the strong market demand for CPU and graphics cards in 2021, AMD’s revenue is expected to exceed the maximum value of the financial guidance. AMD’s C&G business is expected to grow the most because higher-priced AMD Ryzen and high-end AMD Radeon sales continue to increase. In terms of gross profit margin, the market expects AMD's gross profit margin in Q2 2021 will increase by 47% year-on-year. If the average selling prices of CPUs and GPUs continue to rise in Q2 of 2021, and the ASPs of CPUs and GPUs will increase in Q1 of 2021, the gross profit margin may also increase by 48%. CPU market sh...

Teladoc stock forecast 2025: Is it time to buy TDOC?

TDOC's performance exceeded expectations. Why did the performance decline after the announcement? Teladoc (TDOC) reported quarterly earnings of US$0.13 per share, which exceeded the consensus estimate of a loss of US$0.57 per share. In the same period last year, it had a loss of US$0.4 per share. The earnings of this financial report far exceeded expectations. In the last quarter, people expected this telemedicine service company to lose 0.25 US dollars per share, but the actual loss per share was 0.27 US dollars, which was not as good as expected at the time. In the past four quarters, TDOC exceeded expectations twice. The management stated that the company's current momentum in various channels and regions should not be underestimated in the conference call. It has raised its annual revenue guidance to 20 million U.S. dollars, which is expected to be between 1.97 billion and 2.02 billion U.S. dollars. In the first quarter, the comp...

Will the Great Depression make a comeback?

the Great Depression On March 21, 2020, the United States already had initial unemployment data. Exceeding market expectations, the number of applicants reached 3.28 million, a record high. The current unemployment situation in the United States. Before March 7, employment in the United States was not affected by the epidemic. In the week of March 7, the number of people applying for unemployment benefits for the first time in the United States was 211,000, a decrease of 4,000 compared to the previous week. It is still healthy. This shows that the United States is in a good employment track range. The actual data began to fluctuate, that is, the data for the week of March 14, the number of people applying for relief reached 282,000, a slight increase. On March 21, the number of people applying for unemployment benefits soared to a record high this week. 1.7 million people have far exceeded expectations, and market expectations are about 1.5 to 1.7 million people. It can be said...

Bear market coming, gold(GLD) assets become essential

The economic data of the global economic powers have been deteriorating, entering the bear market stage of the economy, and people have become more cautious when choosing asset investment. We should choose investment products with a low correlation coefficient with economic performance and investment products suitable for the current economic cycle. Investors should pay more attention to foreign exchange and commodity markets so that they can add value to your assets. Among many assets, anti-inflation commodities such as gold have become essential assets. Take gold as an example. For many years, gold has been regarded as an anti-inflation commodity by international capital markets and has been regarded as an important asset hedging tool by investors. There is also a saying, "The world bought gold during turbulent times." From basic political theory, we know that gold is not currency, and the currency is naturally gold and silver. Although gold has withdrawn from ...

FinanceLinkway

Search This Blog