JD.com: The Amazon of China
As you may well know by now, Financial Joy School has been spilling all the details on the best stocks to add to your portfolio. Deciding which stock you’d like to invest in can be tricky for both investment pros and newcomers. Many times it pays to look at stocks that may not be considered the norm. Let’s look at: JD.com.
How It All Started
JD.com had somewhat of an unusual start. Founded by Liu Qiangdong, the company made its debut in 1998 and officially went online in 2004 as jdlaser.com, operating as a magneto-optical store. The online retail offerings quickly branched out to offer other items such as mobile phones and computers and various electronics. The company evolved several times over a few short years. The domain name was changed to 360buy.com in 2007 before eventually changing its name to JD.com in 2013.
The e-commerce giant is now what many consider to be the Amazon of China. JD.com is often compared to its biggest competitor, Alibaba, which operates in a similar manner. However, when it comes to results, there really is no competition. JD.com’s online marketplace is headquartered in Beijing and covers more than 50 Chinese cities. JD.com focuses on selling and delivering directly to consumers and offers a wide range of products. Similarly to Amazon, you can find anything on the website from furniture to appliances to electronics and household goods.
Why Invest?
JD.com’s performance has been fairly impressive. Earning most of its revenue from the online retail store, JD has also expanded into the world of high-tech supermarkets as well as an online healthcare platform operating under the name JD Health. Wall Street experts expect revenue to increase by 22% this year. This means that JD.com has a great potential to skyrocket in the coming years and bring huge returns to investors. Analysts also expect the annual earnings growth to be around 50% over the next few years. The great news for the company is that currently, the debt to equity ratio is sitting at a modest 5.6%. This means that the company has more cash than total debt and is well covered by operating cash flow.
JD.com has established partnerships with retail giants such as Walmart and Shopify, helping to drive exposure and growth for the company. The collaboration with Shopify will allow U.S. retailers to sell goods to China and further increase JD.com’s reach.
Slow And Steady Wins The Race
Overall, JD.com is a promising stock for both new and seasoned investors alike. While it may not be the stock that will make you rich overnight, there is good reason to believe the stock will continue its steady climb. Steady increase makes it a great long-term stock to consider. Being based in an incredibly large country like China means that it will continue to reach hundreds of thousands of people. JD.com is going strong and will definitely be around for a very long time.
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