Thanks for the video! Love your channel! JD enterprise value is $27 Billion. If we assume $5 Billion cash flow That’s 18.5% of the enterprise value. I’ll buy both JD and BABA
I'm holding a position with a cost basis of 36.09. Apart from having somewhat of a logistics moat, what attracted me was also quite some room for efficiency improvement in their operations which they seem to have started tapping into. The risk of further China cool-down is of course there, but I was counting on it not only being priced in already, but it being priced in excessively. That said, I'll probably be looking to trim the position in the mid 40s, and sell off the rest in the 50s rather than aim to make this a multi-bagger.
I bought both equally weighted since I came to the same conclusion. I also bought Baidu but just 50% compared to jd and baba . That's basically my china portefolio. I also bought into Fosun . I would be really interested to hear your analysis of this stock. Thanks for the good content.
99.99% of retailed investors are clueless when they invest always looking at trailing PE, revenue growth and earnings growth. Having worked in banks, I find it funny
why would you need all that cash while generating 5bn free cash flow and with your valuation beeing so low? I don't know if this is the worse capital allocation ever or they are simply not allowed to do buybacks agressivly. In this case all kind of valuation model is wothless becuse money simply doen't belong to shareholders. I think they deserve a depress multiple
Cash will ultimately flow back to the shareholders. Having a lot of cash on your hands is not uncommon, also in the US we have companies with huge cash reserves, however eventually that one acquisition or buyback period will come up (see Oracle, who sat on a cash for long time before aggressively returning it to shareholders). JD.com is simply an enormous business and they have taken on some debt as well over the past 2 years. This allows for a higher cash reserves. Don't forget, the cash reserve/market cap ratio seems completely crazy, but that is mainly because the market cap is so enormously low. I agree, they should put cash to work, but with higher cash flows over time, will come more value in your hands, I do not doubt that.
@@ThijsNijenhuis with 35 billions of dollars of cash and cash equivalent, they could buy more than half their company back. I'm sorry but I don't get it, it's too suspicious to me. If you believe in your company, there's nothing better than owning a 50% more of it
I do very much agree with that. Let's not forget, the business has a lot of turnaround in terms of cash and also inventory (45 billion in liabilities of which 35 billion is short-term). Naturally you want a decent cash pile, just in case. They also have about 5 billion in debt and some more in capital leases. That being said, of course this business has room for buybacks, and I do agree with you, that they should utilize that cash and buy back stock. They could probably buy back $3-5 billion pretty safely with still having plenty left for acquisitions and takeovers. So we're on the same page here. Yet, they can't quite buy back 50% of the company, they would go bankrupt, because of the lack of liquidity.
You should use your brain and rather try to assess the risk that lurks in the US-american stock market. A stock that is already in the gutter, price-wise, has diminished risk, relative to other inflated stocks.
You underestimate how bad the CCP is, I invested in Baba and I will not make the same mistake is. They literally abducted the CEO of Alibaba and they have destroyed the company by breaking it up. Tencent was not allowed to publish games, and the online education industry was wiped out in 1 day because of some random decision. Fuck that, why woud you invest in such a dystopian and risky environment? I know it's cheap but there are more factors than price. There are plenty of other companies around.
What's the website you're using to see the financials?
do we know what will happen with the spin off for BABA? will we get cash, or shares? a video explaining would be great :)
Supposed to be shares
Thanks for the video! Love your channel!
JD enterprise value is $27 Billion.
If we assume $5 Billion cash flow
That’s 18.5% of the enterprise value.
I’ll buy both JD and BABA
Thank you for the kind words. Right you are, it's a cheap cash machine..
I'm holding a position with a cost basis of 36.09. Apart from having somewhat of a logistics moat, what attracted me was also quite some room for efficiency improvement in their operations which they seem to have started tapping into. The risk of further China cool-down is of course there, but I was counting on it not only being priced in already, but it being priced in excessively. That said, I'll probably be looking to trim the position in the mid 40s, and sell off the rest in the 50s rather than aim to make this a multi-bagger.
I think, taking big risk and targeting small profit..
I bought both equally weighted since I came to the same conclusion. I also bought Baidu but just 50% compared to jd and baba . That's basically my china portefolio. I also bought into Fosun . I would be really interested to hear your analysis of this stock. Thanks for the good content.
I bought both but am overweight BABA
99.99% of retailed investors are clueless when they invest always looking at trailing PE, revenue growth and earnings growth. Having worked in banks, I find it funny
Thanks Thijs! Great Video. I owe both businesses
Thanks! Fantastic!
why would you need all that cash while generating 5bn free cash flow and with your valuation beeing so low?
I don't know if this is the worse capital allocation ever or they are simply not allowed to do buybacks agressivly. In this case all kind of valuation model is wothless becuse money simply doen't belong to shareholders. I think they deserve a depress multiple
Cash will ultimately flow back to the shareholders. Having a lot of cash on your hands is not uncommon, also in the US we have companies with huge cash reserves, however eventually that one acquisition or buyback period will come up (see Oracle, who sat on a cash for long time before aggressively returning it to shareholders). JD.com is simply an enormous business and they have taken on some debt as well over the past 2 years. This allows for a higher cash reserves. Don't forget, the cash reserve/market cap ratio seems completely crazy, but that is mainly because the market cap is so enormously low. I agree, they should put cash to work, but with higher cash flows over time, will come more value in your hands, I do not doubt that.
@@ThijsNijenhuis with 35 billions of dollars of cash and cash equivalent, they could buy more than half their company back. I'm sorry but I don't get it, it's too suspicious to me. If you believe in your company, there's nothing better than owning a 50% more of it
buy the way, thank you for the answer and thank you for your amazing videos full of content
I do very much agree with that. Let's not forget, the business has a lot of turnaround in terms of cash and also inventory (45 billion in liabilities of which 35 billion is short-term). Naturally you want a decent cash pile, just in case. They also have about 5 billion in debt and some more in capital leases.
That being said, of course this business has room for buybacks, and I do agree with you, that they should utilize that cash and buy back stock. They could probably buy back $3-5 billion pretty safely with still having plenty left for acquisitions and takeovers. So we're on the same page here. Yet, they can't quite buy back 50% of the company, they would go bankrupt, because of the lack of liquidity.
Thanks a lot for the kind words, btw.
Wouldn’t touch this until it reaches the $20’s. Nooooooo thank you!
it's almost 20, will you buy?
@Guns-knives damn bro
😂😂😂😂 good thing i reversed your analysis and how making 50 percent of my shorts
Cheap crap will always be a cheap crap
China is almost uninvestable imo, so many risks involved with the CCP. It's naive to disregard that
You should use your brain and rather try to assess the risk that lurks in the US-american stock market. A stock that is already in the gutter, price-wise, has diminished risk, relative to other inflated stocks.
Man you guys regurgitate the same sh*t, "CCP this, CCP that" we KNOW!
You underestimate how bad the CCP is, I invested in Baba and I will not make the same mistake is. They literally abducted the CEO of Alibaba and they have destroyed the company by breaking it up. Tencent was not allowed to publish games, and the online education industry was wiped out in 1 day because of some random decision. Fuck that, why woud you invest in such a dystopian and risky environment? I know it's cheap but there are more factors than price. There are plenty of other companies around.