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JD.com (JD US) and Alibaba (BABA US)

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    JD.com (JD US) and Alibaba (BABA US)

    Hi James/Shawn can I please have your updated view on JD.com and Alibaba. Do you still believe JD is cheap? Is it fair to assume that of the 2 you are more bullish Baba with a 6% weighting vs JD which has a 4% position in your international portfolio. Both their share price has gone nowhere in last 6 months. It feels like I’m forever waiting for more stimulus to come out of China to get these stocks moving. Why else do you think these businesses are so out of favor as opposed to US Tech?

    Answer

    Hi Terry,

    We feel your frustration in terms of stimulus out of Beijing although the miners did show glimmers of hope through July.

    Alibaba (BABA US) and JD.Com (JD US) are  both major Chinese e-commerce giants, but their business models differ significantly. Alibaba is a marketplace-driven, asset-light platform akin to eBay or Amazon Marketplace, while JD.com is more like a traditional retailer (like Amazon itself), controlling its supply chain and logistics directly.

    • Of the two we do have a preference to BABA although as you said both have trodden water through most of 2025.

    We still believe they are cheap and the Chinese economy has reached its nadir, BABA is trading on 13.8x for FY26, and JD 10.7x for CY25 whereas US peer Amazon is trading on 37.1x for CY25.  We believe the valuation differential will narrow over time, and remain optimistic on both.

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    Alibaba Group (BABA US)
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