JD.com Sales Shoot Up On Strong Second Quarter Performance

E-COMMERCE
FILE PHOTO: A JD.com sign is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 4, 2017.
(Photo: REUTERS/Aly Song/File Photo GLOBAL BUSINESS WEEK AHEAD)

Shares of JD.com (JD) have skyrocketed over 10% late Tuesday after the Chinese e-commerce giant pushed its stocks higher in the rankings at Wall Street -- and crushing sales estimates by a huge margin for the second quarter.

JD.com advanced almost 13% to settle at 30.66 USD (US dollars), and as of Tuesday's after-hours session, the Chinese online shopping company was worth more than $51.5 billion. The Beijing-headquartered company gained an adjusted 33-cents per US depositary stock on nearly $30 billion in revenue.

The company's adjusted earnings per share were up 561% to $0.33 for the first six months. Investors estimate the company to report $21 billion in revenues, and earnings-per-share of $0.07 in the third quarter.

This aggressive upward trajectory has made JD.com the best performing Chinese stock among the 10 most active shares in terms of weight in the S&P U.S.-Listed China-50 Index on Tuesday. The company's shares dropped 52.1% due to accusations of anomalies, the China-US trade discord, and a sluggish domestic economy. Despite all this, JD.com is bent on boosting its online influence and jack up revenues in the coming months.

The Chinese online retailer's solid second-quarter performance underscores its successful sales anniversary on June 18, and proved the "resilience of a superior business model in a highly-competitive market," Richard Liu, Chief Executive Officer, said in a press statement.

JD.com is China's largest online retail shopping platform, with annual profits of $68 billion last year. The company's sales ballooned to 38% yearly between 2015 and 2018, courtesy of China's booming middle- class and growing online presence.

During Tuesday's media conference, Chief Financial Officer Huang Xuande said the company's second-quarter sales growth was achieved despite market worries about macro-economic conditions and competitive cycles, and all punctuated with "strong momentum from 3rd-party ad revenues and logistics."

As a result of the recent upward shift in JD.com's stock price, the company is trading at a forward price to earnings ratio of 28.6X, which means the stock is heavily undervalued. For the current year, earnings are seen to rise more than 100%.

A force to reckon with in China's e-commerce landscape, JD.com is a stable stock to bet on for the long term as the company taps multiple growth sources and strengthen its bottom line as it continues to scale. Meanwhile, Alibaba Group remains as JD.com's main rival, followed by Tencent Music Entertainment, which beat market estimates for the second quarter, late Monday.

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