Tuesday 19 June 2018

US Stock Tip: This 2nd Largest Chinese E-commerce company just got a Big Boost!

JD.com is the 2nd largest E-commerce company in China. JD.com is also known as Jingdong is headquartered in Beijing, but listed in Nasdaq.

Yesterday news came out that Google is investing $500m into this company in a joint venture deal that will benefit both parties.

In a joint statement, they say that "By applying JD’s supply chain and logistics expertise and Google’s technology strengths, the two companies aim to explore the creation of next generation retail infrastructure solutions, with the goal of offering helpful, personalized and frictionless shopping experiences."

Today you must not ignore the potential of JD.com. 

4 reasons why i like this company:

1) It is working with a lot of other internet giants to increase its membership. Membership is GOLD nowadays!

2) JD.com is the next Amazon - It is spending crazy money to do on technology and building logistic infrastructure all over China. That is the real reason why JD.com price have not fly through the roof yet. Their earnings reports are still showing tremendous growth.

But please remember that 4 years ago, we are saying the same thing to Amazon, who spends so much money on building logistics infrastructures. And see how Amazon is reaping its rewards today. See how far behind is Ebay today. 

Taobao.com so far is still the number 1 e-commerce website in China. And if Taobao did not buck up and improve its quality of products, infrastructure, and technology to provide easier usage, Taobao.com will be the next Ebay.com

3) It is selling premium stuff on its website instead of pirated products or poor quality products. That to me is what brings Ebay down. And JD.com products are all guaranteed. It is building a relationship and Trust with its clients!

4) It's price is dented recently because of Trade War Fears! From a high price of US$50, it has dropped to $35 lowest because of the quarrel. But the good thing is even if trade war continues, JD.com earnings won't be that affected.

Its main revenue comes from Chinese consumers and not overseas. So whether got trade war or not doesn't matter! That means any pullback because of trade war is an opportunity to Buy, not Sell!

To sum it up, a lot of investors who invest in stocks are myopic and look at short term earnings reports or news. That should not be the way.

Look far!

Forecast what will happen 10 years later.

JD.com is one stock that should be in your portfolio for the next 10 years.

Daniel Loh

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"To achieve Financial Freedom, Be Financially Educated" - Daniel Loh

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