Lone bear on JD.com sees 26 per cent downside while UBS downgrades as Alibaba’s e-commerce rival misses out on US$45 billion tech rally
- Blue Lotus Capital Advisors’ Yang is the only analyst with a sell rating on the stock, with a price target of US$27 or the equivalent of HK$106
- UBS downgraded the stock to neutral last week, citing lack of exposure to faster-growing e-commerce segments and loss of market share to Pinduoduo
The e-commerce firm has slumped by 20 per cent in New York trading and 33 per cent in Hong Kong, eroding a combined US$58 billion of market capitalisation while benchmark tech indices in both markets gained. Alibaba Group Holding, the owner of this newspaper, advanced by 7 per cent while Tencent Holdings jumped 15 per cent in Hong Kong.
Shawn Yang Zixiao at Blue Lotus Capital Advisors, the only analyst with a sell rating among 38 who track the stock, offered some answers on what’s afflicting China’s second-largest retail platform operator by gross merchandise value.
“JD.com is swaying in its strategy and it wants to focus on low-price strategy now to gain new users,” the Shenzhen-based managing director said in a phone interview on Friday. “That is against how the company has positioned itself. It also faces stiffer competition.”
Yang cut his rating to sell on March 13 with a price target of US$27 for the American depositary shares, or the equivalent of HK$106. This implies an almost 30 per cent downside to the stock from Friday’s closing levels. The consensus price target is US$62.42, according to Bloomberg data.