Alibaba Group Holding Ltd (NYSE:BABA) has been all over the news since it made its initial public offering debut back in September, and while it is certainly an interesting play on the Chinese consumer economy, there’s another company out there that’s giving it a run for its money.
JD.Com Inc (ADR) (NASDAQ:JD) is China’s largest online direct sales company in terms of transaction volume, offering a wide variety of products ranging from electronics and appliances to books and general merchandise.
As of June 2014, JD operated out of 97 warehouses, 1,808 delivery stations and 715 pickup states catering to more than 1,780 counties and districts throughout the country.
JD’s online marketplace was launched in 2010, and since then, JD has grown rapidly. Since 2012, stock keeping units jumped from just 1.5 million units to more than 26 million units by the end of 2013 — an average 318% increase per year!
In its last three earnings reports, JD has beaten the Street by 100%, 600% and 154%, respectively, and I believe it will be able to see at least 30%-35% per annum growth going forward. That means JD is taking huge market share — almost twice that of the industry, in fact. As of the earnings report, JD holds more than 54% of market share in transactions.
In the fourth quarter of 2014, revenues were up 73% and accounts more than doubled, up 104%. Earnings came in at 53 cents per share, and management noted that earnings per share should growth to $2.39 next year and $4 the year after that. You really can’t beat this kind of growth.
So, fundamentally, JD stock is strong. Plus,its chart is also showing some compelling action:
Since the beginning of 2015, JD has been on fire, and it looks like it’s truly breaking out here. JD stock has pulled back a bit since peaking toward the end of April, which I see as a good buying opportunity, but if it can break above $36, this bad boy could be off to the races.
