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Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Equity Bottom-Up

<p>JD.com's share price rose &gt;20% after reporting a profitable 1Q17. Although the second-largest e-commerce player in China has big ambitions, it is skating on skinny margins, dependent on suppliers' credit and growth in the sector to sustain. In this article, I address a few myths that could be supporting the firm's rich valuations of FY18 EV/EBITDA of 37X :</p><ol><li>JD's profitable quarter is a precursor for a profitable year</li><li>It is the second largest e-commerce player in China and margins will improve eventually</li><li>JD's investments could pay off some day</li><li>It may spin off its logistics unit and unlock some value</li></ol>

JD.com's share price rose &gt;20% after reporting a profitable 1Q17. Although the second-largest e-commerce player in China has big ambitions, it is skating on skinny margins, dependent on suppliers' credit and growth in the sector to sustain. In this article, I address a few myths that could be supporting the firm's rich valuations of FY18 EV/EBITDA of 37X :JD's profitable quarter is a precursor for a profitable yearIt is the second largest e-commerce player in China and margins will improve eventuallyJD's investments could pay off some dayIt may spin off its logistics unit and unlock some value

JD.com: 낮은 마진과 마이너스 ROIC로 인한 높은 밸류에이션

JD.com (ADR)

JD.com: 낮은 마진과 마이너스 ROIC로 인한 높은 밸류에이션