For most of the past year, investor concerns surrounding JD.com (NASDAQ:JD) have mainly been about CEO Richard Liu, who was arrested in early September on suspicion of rape. JD stock fell 6% on the first day of trading following the news, further extending a drop that had begun in early June 2018.

Liu was in Minneapolis for a residency as part of a doctorate program in business administration for “top-level executives” working full-time in China.

While journalists wrote breathlessly about the shares plunging after Liu’s arrest, the real question — for investors — is why JD stock began falling about a year ago in the first place and where it may go from here.

JD.com is Infrastructure

Like Alibaba Group Holding (NASDAQ:BABA), JD.com stock is a play on Chinese e-commerce infrastructure. But unlike Alibaba, which focuses on clouds and retailing, JD.Com focuses on distribution.

JD.com is able to deliver orders profitably to remote villages, and is a leader in automated delivery in cities.  The company delivers about 150,000 orders daily from 500 distribution bases and it has robots delivering fresh goods by land and air. While U.S. companies like Amazon (NASDAQ:AMZN) struggle to get orders delivered in 24 hours, JD.com is getting some packages to their end point in 30 minutes.

JD.com has a market cap of $33 billion and expects quarterly revenue of $21.85 billion, with profits of 5 cents a share, when it next announces earnings August 9.  During the March quarter, when it was expected to earn 12 cents per share, it surprised investors with earnings of 74 cents. 

The delivery infrastructure has value in its own right, and there have been reports it might list the unit separately.

China Growth Concerns

JD.com had revenue of $18.6 billion in 2014. That more than tripled, to nearly $70 billion, by 2018.

My InvestorPlace colleague James Brumley wrote recently that investors are worried about JD tripling the number of its rural storefronts in China to 15,000.

Serving 60-something moms and dads in rural villages is unique but selling refrigerators to their kids in Shanghai is harder. Despite having stores as big as 500,000 square feet, that’s where I place my worries because then JD.com is competing directly with Alibaba.

Unique Niches

Unique niches are hard to come by, but JD.com keeps finding them. One of the more interesting is online sales of luxury goods, where it has a tie-up with Farfetch (NYSE:FTCH), a global seller of luxury brands that went public last September.

Farfetch China acquired Toplife, JD’s luxury portal,  in 2017.  JD.com bought a $397 million stake in Farfetch  and Liu sits on the Farfetch board. Farfetch opened a China portal on JD.com earlier this month, giving JD stock a much-needed boost.

Which leads to the other bearish call on JD.com: the slowing growth of China itself. The trade wars have Morningstar cutting its growth estimates for the world’s second-biggest economy in half, to 3.25%.  That’s still higher than U.S. growth.

Bottom Line on JD.com Stock

The trade war has made Chinese stocks volatile, especially in the tech sector. But JD.com stock is now selling at a Walmart (NASDAQ:WMT) price, when its $70 billion in sales are matched with its $33 billion valuation. (Walmart is worth $311 billion on $515 billion in sales.)

JD.com’s growth means it hasn’t yet made a profit for a full year, but if it hits the mark in August, and continues to make money through 2019, while growing that unique infrastructure, it’s got to be worth money  to a speculative investor.

Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN.