I am not a fan of JD.com, Inc. (NASDAQ:JD), or any Chinese company, for that matter. As I’ve written before, because China is opaque when it comes to doing business, there is always tremendous risk in owning Chinese stocks or doing business there. But there is something worth saying about JD stock

We’ve seen multiple occasions in which companies have been on the receiving end of sudden and surprising government action, and nobody is immune. Qualcomm Incorporated (NASDAQ:QCOM) got hit with a $975 million fine in 2015 for violating China’s antimonopoly law.

GlaxoSmithKline plc (NYSE:GSK) paid a half billion dollar fine for bribery. Microsoft Corporation (NASDAQ:MSFT) got nailed for tax evasion. Wynn Resorts, Limited (NASDAQ:WYNN) saw its Macau business get hit for years when China cracked down on corruption.

Anything can happen at any time in China, and there is no recourse. That being said, what positives do I see in JD stock?

JD Stock Upsides

First, JD.com is quite an enterprise, with about $53 billion in sales. Even more impressive, because JD management supposedly sources all its products and then stores them, it significantly cuts down on the possibility of counterfeit items, which is a serious problem in China.

JD has also spent a good deal of time and money to create its own logistical infrastructure. China is obviously on par with the West in terms of delivery logistics in many ways, but outside the big cities, logistics becomes a significant problem.

However, JD has partnered with Wal-mart Stores, Inc. (NYSE:WMT) as it plans to expand into the U.S. and use WMT’s infrastructure to help with storage and delivery.

Meanwhile, Chinese e-commerce is pegged to grow at a 25% rate this year, twice that of the U.S. Only half the population even has internet access, so there is further room to grow as previously unreachable customers eventually gain access.

Downsides for JD Stock

The downside as far as owning their own logistics infrastructure is cost. Margins are thinner than at competitors like Alibaba Group Holding Limited (NYSE:BABA). That will always be the case, and because sales will be served by this infrastructure, margins will always be challenged.

On a net income basis, things are vastly improving for JD stock. A CNY2.1 billion loss in FY14 fell to CNY1.4 billion in FY15 to CNY547 million in FY16. JD.com stock also went free cash flow positive in FY16 to the tune of CNY715 million. JD.com stock also had over CNY9 billion in cash and investments.

There’s obviously room for many e-commerce players, both in China and abroad. In China, JD.com is doing well against its competition.

It remains to be seen, however, how broad the offerings at JD.com will be once it hits America. There are certain goods that Americans will be comfortable with that originate in China. Yet there may also be a good deal of resistance unless JD.com can demonstrate that it offers plenty of products of high quality that may or may not even originate in China.

The danger is that American consumers will look askance at JD.com as being the purveyor of cheap Chinese goods that can’t compete with what they can find elsewhere online. That may be true even though many of our favorite products are manufactured over there anyway.

JD.com has broken out of a year-long consolidation, so if you are interested in taking a risk on JD stock, now may be a good time.

Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the Manager of The Liberty Portfolio at www.thelibertyportfolio.com. He does not own any stock mentioned. He has 23 years’ experience in the stock market, and has written more than 2,000 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.