Consumer Discretionary
Arete downgrades JD to Sell, slashing their FY25 EPS forecast from $4.00 to $2.30. JD has sharply scaled back food delivery subsidies, with per-order losses narrowing from ~RMB10 to ~RMB6 last month. As a result, daily delivery volumes have fallen from ~25m to ~12-15m. The incremental market created by JD in the food delivery sector will ultimately be divided up by Meituan and Alibaba as JD retreats. Arete estimates ~5% of JD’s GMV is at risk from SKU overlap with fast-delivery “insta-shopping” categories. Meanwhile, JD’s new initiatives show little traction: its travel business lacks scale, stablecoin plans face regulatory hurdles, while a potential €2.6bn Ceconomy deal brings operational risk. Arete also questions the relevance of JD’s micro-drama platform, which trails dominant rival ByteDance.
Edition: 217
- 08 August, 2025
Food delivery winners are Alibaba>Meituan>JD>PDD
Consumer Discretionary
Blue Lotus sees BABA as the likely winner in China’s intensifying O2O war, thanks to its unmatched SKU breadth, vast dormant customer base, Ele.me infrastructure and Alipay ecosystem. O2O provides a strategic opportunity for BABA's new management to refocus its e-commerce business. Meituan and JD face structural limitations: Meituan lacks SKU depth; JD lacks cross-sell leverage. JD may emerge as a secondary winner if it can convert Plus members to food delivery users, though heavy 2025 losses (~RMB12bn) are expected. PDD is most at risk without swift action. Government pressure to cool price wars favours BABA. Meituan’s 618 Instashopping saw explosive growth, but margin challenges remain. JD’s strong start in food delivery may stall amid subsidy rollbacks and financial constraints.
Edition: 213
- 13 June, 2025
China’s recent high-profile meeting with private entrepreneurs signalled Beijing’s strategic priorities, highlighting firms advancing state goals while sidelining others. Key invitees included Alibaba, Tencent and Huawei, while Baidu, ByteDance and JD.com were absent. This distinction suggests Beijing’s support for companies driving innovation in AI, advanced manufacturing and strategic industries like EVs and semiconductors. Xi Jinping reinforced the Party’s control, urging businesses to serve national interests and promote "Common Prosperity". Firms like DeepSeek, Alibaba and BYD align with these objectives. Conversely, Baidu and other omitted firms may face tolerance but lack government backing.
Edition: 206
- 07 March, 2025
Old e-commerce names are the biggest winners of new stimulus in China
Consumer Discretionary
Blue Lotus expects there will be a string of good retail data in the near-term, driven by an early start to the Double 11 sales festival, increasing consumer participation for home appliances amid the trade-in subsidy, and generally improved consumer confidence following the recent market rally and stimulus announcements. As a result, they have revised their estimates, raising 4Q24 online retail sales growth to +10.1% Y/Y (vs. prior +4.9%) and for 2025 to +9.5% (vs. prior +4.5%). A reversal of the “consumption downgrade” primarily benefits platforms with large exposure to brand and higher-end items. JD.com and Alibaba remain Blue Lotus’ top picks.
Edition: 197
- 18 October, 2024
China: eCommerce forecasts for 2024-2028
Highlights from RedTech’s 22-page report include: 1) Online sales growth will range from ~7-10% from 2024 through 2028, based on ~4-7% overall retail sales growth. 2) High penetration implies slower growth for apparel, while lower penetration suggests more opportunity in electronics / appliances and in groceries. 3) These product dynamics do not favour Alibaba, particularly with more competition. 4) Expects the fastest growth from PDD and even more so Douyin. 5) JD should see gains, but it has been overtaken by newcomers outside of its core electronics and appliances. 6) Alibaba has the most to lose and it will continue losing share.
Edition: 184
- 19 April, 2024
Consumer Discretionary
Downgrades the stock to Sell as BABA backpedals on plans to spin off its cloud business. The malaise today is an aftermath of overexpansion since the group’s IPO in 2014. The resulting conglomerate not only draws ire from the CPC and runs afoul with trustbusters, but also piles up deteriorating assets. So, what needs to occur for Blue Lotus to turn bullish? 1) Taobao / Tmall need capable management to defend against ByteDance, PDD and JD. 2) Needs to resolve its issues with the government on businesses which pose security uncertainties and invite antitrust actions. 3) BABA must be managed by people with high aspiration for success and corresponding incentives.
Edition: 174
- 24 November, 2023
Consumer Discretionary
Fund ownership in the stock continues to fall - average weights slip to 4-year low as managers close out en masse. Between Feb and Oct this year, there were 56 closures (vs. 6 openings), led by growth funds. Ignore the corporate action related declines in Housing Development Finance Corp - the JD.com decline is head and shoulders above all stocks in the EM investible universe over the period. The departure of numerous key investors, paired with the still sizeable base of remaining investors (JD.com is the 16th most widely held stock globally), heightens the risk of an additional sell-off, casting a shadow on any potential share price recovery in the near term.
Edition: 174
- 24 November, 2023
eCommerce
RedTech’s 3Q23 merchant survey takes a closer look at longer-term growth prospects for Douyin, which is again the most promising destination for online advertising and eCommerce in China. RedTech also asked their merchants several more detailed questions about the strategies they are pursuing on Douyin, as well as how they see things changing and playing out on the big eCommerce incumbents. Douyin is expected to nearly double its share of merchant sales by 2026 to ~19% with Douyin Mall a key driver. While the response to date from Alibaba's Tmall and JD has been lacklustre, opinions on how they should respond are divergent.
Edition: 170
- 29 September, 2023
Pinduoduo (PDD US) & Dada Nexus (DADA US) US
Consumer Discretionary
Revenue growth has been the driver for both stocks, but they are facing tough top line growth comps in 2H23. For PDD, the slowing growth may not be temporary, as F&B delivery is likely to become a smaller part of the business with people out of quarantine, user saturation may be reaching its limit and merchants / consumers may be switching to JD.com’s offer. Felix Wang is also flipping DADA from long to short, as near-term catalysts are shifting. A critical part of his long pitch stemmed from support from short video disruptor, Douyin. However, Douyin surprisingly encountered major obstacles in local life services, including food delivery, in Q2. Competition for DADA is also heating up.
Edition: 166
- 04 August, 2023
Communications
In Sumeet Singh’s earlier note in 2022, ‘Tencent investee selldown - The US$120bn global overhang’, he had looked at the group's overall investment portfolio. With two of its heavyweight investments having now been spun-out, Sumeet re-looks at Tencent’s shareholdings in various companies to try and gauge which ones it could sell out of and how. In terms of regulatory scrutiny, Pinduoduo is probably very high up on the list, alongside Kuaishou, Futu and PolicyBazaar. Announcements re. the divestments of JD.com and Meituan occurred towards the end of 2021 and 2022, respectively. Thus, some of these names could start to come under pressure by the last quarter.
Edition: 162
- 09 June, 2023
Consumer Discretionary
Wium Malan examines the industry and macro-environment and analyses what he believes to be the three key controversies in JD’s investment case, namely: slowing revenue growth, margin progression, and its significant net cash balance sheet. He notes the stock now trades on only a 4.1x Dec-23 PE multiple (excl. net cash balance sheet and associates at book value) and on an extremely attractive 12.8% NTM FCF yield, which is a significant discount to its historic average trading range and its global peer group.
Edition: 162
- 09 June, 2023
Consumer Discretionary
With its positioning in the low-end and lower tier geographies, PDD has more opportunities to expand in eCommerce than Alibaba and JD.com, and the lowest risk of having somebody encroach on its turf. Douyin and Kuaishou only have niche eCommerce operations and will not focus on the average guy in some rural township. Modest improvements in trust among China’s middle class suggest PDD can steal some growth from its upmarket rivals, but no one believes it will enjoy the kind of success in the mid- and upper-tiers of the market that it does now in low-tier markets, and with ~900m customers that will continue to find value in that for the foreseeable future, that’s just fine.
Edition: 161
- 26 May, 2023
China eCommerce primary research report
Consumer Discretionary
Based on a variety of data and feedback from 27 eCommerce professionals, Westlake observed 1Q apparel sales recovered the strongest among online discretionary categories, cosmetics rebounded modestly but appliances sales softened slightly. Mar & Apr saw a marked acceleration in online discretionary category sales growth (except for skincare), likely due to further consumption recovery and a low base last Mar & Apr. Alibaba, JD.com, Pinduoduo, Vipshop and Kuaishou eComm can likely at least meet 1Q China-related eComm sales or marketing revenue expectation. JD Retail had relatively weaker 1Q given the restructuring and soft appliance & general merchandise sales.
Edition: 160
- 12 May, 2023
Real Estate
Looking to raise US$1bn in its upcoming Hong Kong IPO - JDP has been growing via acquisitions which has resulted in strong sales growth (99.6% CAGR FY20-22). However, its surging finance costs have brought the firm to adjusted net loss territory. With a net debt to equity ratio of 77% in FY22, it could potentially put a ceiling on its future expansionary plans (or the firm will likely need to tap equity markets post-listing for further financing). As much as JDP has made attempts to diversify away from its parent, it remains largely dependent on JD.com. Also, its pre-IPO shareholders don't appear to have subscribed to a lockup undertaking.
Edition: 159
- 28 April, 2023
Consumer Discretionary
Outsized beneficiary from a recovery in Chinese retail sales as the fiscal and monetary stimulus, coupled with a gradual easing of China’s Zero Covid policy, stimulates demand throughout 2023. Having seen a recovery in margins YTD, Wium Malan continues to believe that JD.com can sustainably generate above 5.0% NOPAT margins vs. 1.5% YTD. Net cash of RMB186.6bn ($26bn) is equal to 32% of its current M/Cap. The stock trades on an extremely attractive 13.4% NTM FCF yield - a significant discount to its historic average trading range and global peer group.
Edition: 150
- 09 December, 2022
Communications
US$20bn overhang for Meituan as China's social media giant slashes its stake in the food delivery firm from 17% to just 1.6% - the share distribution follows the template of the US$16bn worth of JD.com shares that Tencent paid out after its dividend announcement at the end of 2021. In this note, Sumeet Singh discusses the implications of the deal and thinks next on the list for stake divestment is likely to be Pinduoduo, but that will have to be via a placement as it trades in the US.
Edition: 149
- 25 November, 2022
China eCommerce primary research report
Consumer Discretionary
Westlake observed online discretionary spending (except for cosmetics) recovered gradually in Jul & Aug, but softened slightly in Sept & Oct given rising community lockdowns. They expect Alibaba, JD, Pinduoduo, Vipshop and Kuaishou will meet 3Q Street expectations. Given modest improvements in business and consumer confidence, they anticipate further 4Q sales recovery for leading Chinese eComm players driven by 11.11 promotions and likely continued government consumption coupons. If Covid restrictions gradually ease after the 20th party congress, a broad-based recovery will help boost consumer spending.
Edition: 146
- 14 October, 2022
Consumer Discretionary
The stock has meaningfully outperformed local peers, the Hang Seng index, and broader Emerging Markets index in the last 6 months, when Wium Malan argued that VIPS’ valuation multiples had de-rated to levels where it was an attractive takeover target. Trades on a paltry 3.8x forward PE ratio (ex-cash) and looking purely from an infrastructure perspective, trades at a c.50% discount to JD.com on a per square metre basis. Given the recent rebound in Chinese retail / apparel sales growth and the pessimistic expectations from the sell-side, Wium expects the current earnings upgrade cycle to continue.
Edition: 146
- 14 October, 2022
Technology
Multiple new agencies have been reporting that Tencent plans to trim its investment portfolio over the remainder of the year. The company has been duly denying these rumours. Although, after it distributed over US$16bn worth of JD.com shares at the end of 2021, and then sold US$3bn worth of SEA stock in early Jan 2022, it clearly showed that the tide for Tencent investments had turned. The company is becoming a seller after having been on a voracious investment spree over the past few years.
Edition: 145
- 30 September, 2022
Douyin eCommerce: From strength to strength
Against a background of widespread pessimism about the macro-environment for 2022/23, merchants in RedTech’s 2Q22 eCommerce survey highlighted Douyin, and to a lesser extent Pinduoduo and JD.com as winners, while Alibaba underperformed. Merchants liked Douyin’s eye-catching content, which delivers excellent performance on ad KPIs, resulting in rising sales and an even greater chunk of merchants’ ad spending. They also noted Douyin’s strong potential for sales in lower tier cities. Alibaba on the other hand has hit its peak, user growth is stalling, costs for merchants on the platform are high, and competitors in both the high and low end loom large.
Edition: 140
- 22 July, 2022
China: e-commerce grassroots surveys
Community group buying e-commerce competition landscape further optimised - JD.com shrinks, while Meituan Select, DuoDuo Grocery and Tao CaiCai’s market shares improve. Meituan Select and DuoDuo Grocery are clearly better positioned in terms of order volume, with a combined market share of c.80%. More details on traditional e-commerce business, live streaming e-commerce competition between Kuaishou and Douyin, and express industry dynamics are available in Horizon Insight's quarterly survey report.
Edition: 137
- 10 June, 2022
Worst is over on the China regulatory front: 4 high conviction long ideas...
Haidilao (6862 HK) - This hot pot chain is ideally placed to benefit from the 'Great reopening of China'. RedTech’s latest consumer survey’s indicate strong demand and long-term growth opportunities.
BOSS Zhipin / Kanzhun (BZ US) - Continues to be sold off as a targeted victim of the government’s crackdown, but as a market leader in job recruitment its interests should be very well aligned with the government.
JD.com (9618 HK) - Low regulatory risk and as incomes rise and tastes move up market, JD is well positioned to capture those upwardly mobile consumers.
JD Health (6618 HK) - Key regulatory obstacles will be swept away in the coming 1-2 years and the combination of JD’s userbase and JD Health’s one-stop digital offering should position it well to ride the wave.
Edition: 136
- 27 May, 2022
Consumer Discretionary
Can sustained market share gains be transferred into sustained margin progression? Wium Malan provides his take following the market's disappointment in JD.com's 4Q21/FY2021 profitability levels. He examines relative market share changes, key operational drivers and longer-term margin expansion trends. Wium also notes that on a growth-adjusted basis, JD.com trades at a discount to peers and a PEG ratio of just 0.7x. Strip out net cash (31% of M/Cap) and JD.com trades on a normalised forward P/NOPAT multiple of just 6.6x - that looks attractive for what is China's largest retailer.
Edition: 132
- 01 April, 2022
China Fall: Gap to US largest in history
Global Funds Positioning Analysis - allocations in China & HK among Global active managers have fallen to below pre-2017 levels. This allocation drop is in stark contrast to what is occurring in the US, with allocations powering to all-time highs. If Global managers are to increase weights in China, Steven Copley believes they will have to broaden their investment horizons. He compares Global stock holdings in China with their GEM peers - the rapid rise in investment by GEM Funds in Ping An Insurance, Meituan and JD.com suggests they can take a greater share in Global Fund portfolios in the future.
Edition: 118
- 03 September, 2021
JD.com (9618 HK)
Consumer Discretionary
A critical quarter is on the horizon - JD.com is set to face the first in a series of brutally tough comps from last year. Rickin Thakrar expects 2Q21 earnings (scheduled for 18th Aug) to disappoint, negatively impacting JD’s valuation as well as estimates for the rest of the year. In addition, further scrutiny is likely to arise on the durability of JD’s cash flow which deteriorated significantly in 1Q21. Most analysts are pencilling in ~4bn RMB in working capital outflow, however if trends persist from 1Q, Rickin believes further downgrades to estimates will occur.
Edition: 115
- 23 July, 2021
Canada Goose (GOOS)
Consumer Discretionary
GOOS China to accelerate growth in FY22 driven by retail expansion and same store sales growth - JL Warren forecast sales up 50-60% in mainland China and believe the group can double its locations in the next couple of years. They estimate ~15-20% SSSG by launching more spring collections and improving conversion rates. On e-commerce: GOOS Tmall GMV nearly doubled YoY in June; for FY see ~25-30% GMV growth on Tmall and WeChat stores; believe the company will soon launch a new store on JD.com.
Edition: 114
- 09 July, 2021
AiHuiShou (RERE US) US
Technology
Turning the vicious cycle into a virtuous one - Arun George examines the prospects for this exciting upcoming Chinese US IPO. Backed by JD.com (~35% stake), AiHuiShou operates the largest pre-owned consumer electronics transactions and services platform in China. The company is ideally placed to benefit from the huge demand for second-hand devices in China - a market that is 3x the size of the US and is expected to grow at a 30.8% CAGR from 2020 to 2025. Given the business model it will also appeal to investors with an ESG mandate.
Edition: 112
- 11 June, 2021
JD.com (9618 HK)
Consumer Discretionary
With lingering concerns around short-term margin expansion as JD invests more aggressively in group purchasing aimed at the fresh food segment, Wium Malan examines the potential for long-term margin expansion and what that implies for current valuation levels for China’s largest direct retailer. As a base case, he argues that JD could sustainably generate ~4% NOPAT margins (vs. just 1.5% in 2020) and calculates fair value to be HK$405/share (50% upside). Other companies mentioned in the report include Amazon, Alibaba and Walmart.
Edition: 110
- 14 May, 2021