JD.com is a Beijing-based online direct sales company that is primarily engaged in the sale of electronics and home appliances.
The Shanghai Composite index rose by 0.5% to 3,052.78 on Wednesday, Bloomberg reports.
China's automakers were leading the market after the country's government cut a vehicle purchase tax.
Financial markets in China will be closed beginning tomorrow for a week long national holiday, Bloomberg added.
Separately, TheStreet Ratings team rates JD.COM INC -ADR as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate JD.COM INC -ADR (JD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JD's very impressive revenue growth exceeded the industry average of 33.8%. Since the same quarter one year prior, revenues leaped by 60.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- JD's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Compared to other companies in the Internet & Catalog Retail industry and the overall market, JD.COM INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for JD.COM INC -ADR is currently extremely low, coming in at 6.36%. Regardless of JD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.11% trails the industry average.
- JD is off 6.77% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: JD