JD - JD.com, Inc.
50.90 -0.12 (-0.24%)
After hours: 7:59PM EDT
| Previous close | 52.16 |
| Open | 51.57 |
| Bid | 50.80 x 800 |
| Ask | 51.00 x 1300 |
| Day's range | 50.64 - 52.48 |
| 52-week range | 25.50 - 56.50 |
| Volume | 10,654,371 |
| Avg. volume | 19,854,150 |
| Market cap | 74.929B |
| Beta (5Y monthly) | 0.89 |
| PE ratio (TTM) | 347.07 |
| EPS (TTM) | 0.15 |
| Earnings date | 11 Aug 2020 - 17 Aug 2020 |
| Forward dividend & yield | N/A (N/A) |
| Ex-dividend date | N/A |
| 1y target est | 49.60 |
- Bloomberg
A Tech Billionaire May Find Use in a Cold War
(Bloomberg Opinion) -- Is India’s richest man betting on a tech cold war?Petrochemicals czar Mukesh Ambani plans to list his fledgling digital business overseas, Bloomberg News reported Tuesday, citing people with knowledge of Jio Platforms Ltd.’s initial public offering, which is planned for the next 12 to 24 months.Going to the New York Stock Exchange or Nasdaq would make sense. U.S.-traded Chinese technology firms such as JD.com Inc. and NetEase Inc. are looking for an alternative home closer to the mainland in case tensions between Washington and Beijing escalate, as my colleague Nisha Gopalan wrote this week. Alibaba Group Holding Ltd. held a secondary listing in Hong Kong in November. With Washington considering a range of sanctions against Chinese officials and firms as punishment for Beijing’s crackdown on Hong Kong, now may be the perfect time to pitch American investors on the potential of the other internet market with a billion-plus people.A splashy overseas foray will be an unusual step for a family that brought the retail equity culture to India. Dhirubhai Ambani, Mukesh’s late father who founded the empire, booked a football stadium in Mumbai in 1985 to hold a shareholders’ meeting for the polyester textile maker that he had floated eight years earlier. But then, Mukesh Ambani is already moving old furniture around as he pivots flagship Reliance Industries Ltd. away from an oversupplied energy and chemicals market. At the same time, he’s beefing up the balance sheet after a seven-year, $100 billion debt-fueled expansion. A big chunk of that was for Jio, the wireless carrier that has become India’s largest in less than four years.A $7 billion rights issue, Reliance’s first in three decades, buttressed by more than $10 billion raised in a month from the sale of shares in unlisted Jio Platforms may help cut the company’s $20 billion of net debt to zero before Ambani’s March 2021 target. A U.S. IPO should give Jio’s new backers, including Facebook Inc., KKR & Co., Silver Lake Partners and General Atlantic, a better valuation in a capital market that’s deeper than Mumbai’s.Will Wall Street be so hospitable as to give Ambani, say, a $100 billion valuation? (Alibaba, a more mature business, was valued at $168 billion six years ago.) Jio Platforms, which is centered on the the 4G mobile network, is the cornerstone of Reliance’s emerging triple play on carriage, content and commerce. With almost 400 million customers under his belt, Ambani needs to prove he can garner at least $3 from each of them every month. Modest as that sounds, it isn’t an easy task when per-user revenue is at present only a little over half as much. The coronavirus lockdown has ravaged India’s economy, setting its growth prospects back perhaps by several years. Mass market consumers, who comprise Jio’s user base, have been badly hurt.That’s where a tech cold war may help. Wall Street investors have been able to profit from the explosion of e-commerce in China, even though the likes of Facebook and Amazon.com Inc. are largely shut out of the People’s Republic. If that access gets curbed by geopolitics, then Ambani’s story becomes more compelling. He can offer the vision of a vast retail network that has Facebook’s popular WhatsApp messaging system processing orders and payments for neighborhood shops connected digitally to a billion-plus buyers. That could be a big draw. A U.S. home is within Ambani’s reach, especially if Chinese firms are forced to vacate. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Hong Kong Finance Has a Security Blanket
(Bloomberg Opinion) -- China’s decision to impose a national security law on Hong Kong has spurred speculation of capital flight and an erosion of the city’s status as an international financial center. As a venue for share offerings, at least, the near-term future is looking bright. For that, the territory can thank worsening U.S.-China relations.U.S.-listed Chinese technology companies are lining up to sell stock in Hong Kong, seeking refuge from an environment that has become increasingly less hospitable. Nasdaq-traded JD.com Inc. and NetEase Inc. are planning secondary listings in the city next month, following a trail blazed by Alibaba Group Holding Ltd. in November. Optimism that more companies will join them drove shares of Hong Kong’s exchange operator up more than 6% on Monday.There’s every reason to expect these stock offerings to do well, and push Hong Kong back up the rankings of the world’s largest fundraising centers. So far this year, the city is the sixth-largest market by capital raised. It topped the table for the whole of 2019 when New York-listed Alibaba sold $13 billion of stock, underscoring the existence of a strong local investor base for China’s most successful companies.The reception for Alibaba suggests that Asian institutional investors want to be able to trade China’s leading enterprises in their own time zone. JD and NetEase are also among the nation’s technology champions. Beijing-based JD competes with Alibaba in e-commerce, while Hangzhou-based NetEase is behind some of the most popular mobile games in China. Beyond these two, search-engine operator Baidu Inc. is considering delisting from Nasdaq and moving to an exchange nearer home, Reuters reported last week. The coronavirus has exacerbated tensions between Washington and Beijing, while scandals such as fabricated sales at Luckin Coffee Inc. have spurred politicians to push for tighter regulation, giving Chinese companies an incentive to list elsewhere.Hong Kong is an obvious choice. The city burnished its appeal for U.S.-traded companies last week when the compiler of the city’s benchmark Hang Seng Index said it would change its rules to admit secondary listings and companies with dual-class share structures. Stocks that join the benchmark can expect inflows from passive investors such as exchange-traded funds that track the index.Citigroup Inc. reckons that 23 of the 249 Chinese stocks traded in the U.S. meet Hong Kong’s criteria for a secondary listing, which require companies to have a market value of $5.2 billion or, alternatively, a combination of $129 million in annual sales and a $1.3 billion market cap. JD tops the group with a value of $73 billion.An even more alluring prize would be inclusion of secondary listings in Hong Kong’s stock-trading links with the Shanghai and Shenzhen exchanges, which would enable mainland Chinese investors to buy these shares. Alibaba wasn’t included in the stock connect, to the disappointment of some investors. China’s government could yet decide to make this happen.It’s a reminder that Beijing has levers at its disposal to help shore up Hong Kong’s economy and financial industry, which accounts for a fifth of the city’s gross domestic product — as it did after the SARS epidemic in 2003, when half a million people demonstrated against the Hong Kong government’s first, aborted attempt to introduce national security legislation. Hong Kong Exchanges & Clearing Ltd. surged the most in 18 months Monday even as unrest returned to the city. Listing of American depositary receipts may double the exchange operator’s revenue, Morgan Stanley said. The Hang Seng Index, meanwhile, stabilized after slumping 5.6% on Friday.An exodus of businesses, people and capital may yet imperil Hong Kong’s role as an international financial center. The IPO outlook suggests that, rather than a sudden demise, that’s likely to be a long drawn-out process. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Motley Fool
3 Ways JD.com Is Beating Amazon
The Chinese e-commerce company may be smaller, but it has some advantages over its American counterpart.
- Bloomberg
Alibaba Drops After Projecting Slowing Growth in Uncertain Times
(Bloomberg) -- Alibaba Group Holding Ltd. slid after projecting revenue growth will slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.Its stock slid as much as 4% in Hong Kong Monday, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s most valuable corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing. JD.com Inc., the No. 2 Chinese online retailer, forecast better-than-expected revenue this quarter.“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote. “We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”Read more: Alibaba Sales Growth Plumbs New Lows While Uncertainty EscalatesAlibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Friday Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.What Bloomberg Intelligence SaysUser engagement and transaction volume have rebounded in April and May to precrisis levels, which bodes well for normalized sales growth ahead, especially as merchant-support measures are gradually rolled back.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter but ahead of expectations. Its sales and marketing expenses jumped 49%. PDD’s shares climbed 15% Friday.Alibaba’s March-quarter net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy the bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Motley Fool
NetEase, JD.com's Hong Kong Listings Happening in June
NetEase (NASDAQ: NTES) and JD.com (NASDAQ: JD), the two Chinese technology giants, are gearing up to list on the Hong Kong Exchange next month. NetEase will list on the Hong Kong Exchange via a secondary offering on June 11, sources told Reuters. NetEase is aiming to raise as much as $2 billion via the listing while JD.com could raise $3 billion, selling about 5% of its shares outstanding, reports Reuters.
- Bloomberg
Alibaba Sales Growth Plumbs New Lows While Uncertainty Escalates
(Bloomberg) -- Alibaba Group Holding Ltd. expects revenue growth to slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record. Alibaba’s shares slid more than 5% in New York.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s largest corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing.Alibaba has lost more than $40 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter, although that still beat expectations. Its sales and marketing expenses jumped 49%.Alibaba’s net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com Inc.’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy its bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”What Bloomberg Intelligence SaysThe company’s businesses most impacted by merchant and logistic disruptions are also its most lucrative, such as retail marketplaces Taobao and Tmall, while faster-growing segments like cloud computing and digital entertainment don’t contribute to profit. Subsidies for users and merchants will add to costs. Alibaba may provide an improved growth outlook for the June quarter given the retreat of the pandemic in China, but the recovery could be gradual as consumption sentiment remains weak.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Zacks
Why JD.com (JD) Isn't Done Growing Earnings Yet
If you are looking for a fast-growing stock that is still seeing plenty of opportunities on the horizon, make sure to consider JD.com (JD).
- Zacks
Why JD.com (JD) Stock Might be a Great Pick
JD.com (JD) has seen solid earnings estimate revision activity over the past month, and belongs to a strong industry as well.
- Bloomberg
China’s JD, Netease Aim to List Shares in Hong Kong Next Month
(Bloomberg) -- Netease Inc. aims to list shares in Hong Kong on June 11 and JD.com Inc. a week after, a person familiar with the matter said, completing two mega stock sales for the city at a time of escalating market volatility.U.S.-listed Netease and No. 2 Chinese online retailer JD hope to gain approval for local debuts during listing-committee hearings on Thursday, the people said, asking not to be identified discussing private matters. JD’s stock sale could raise $2 billion or more to help the e-commerce giant shore up its position in an increasingly competitive home market. The retailer’s June 18 target coincides with its largest annual online sales event.The twin debuts follow Alibaba Group Holding Ltd.’s $13 billion Hong Kong stock sale last year, hailed as a homecoming for Chinese companies and a win for Hong Kong Exchanges & Clearing Ltd., which lost many of the largest tech corporations to U.S. bourses because it didn’t allow dual-class share voting at the time -- a requirement that’s since been relaxed. Netease and JD are also listing at a time of escalating tensions between Washington and Beijing, now spilling over into Chinese companies’ access to U.S. capital markets after the downfall of Luckin Coffee Inc. -- one of the country’s brightest startups.Representatives for JD, Netease and Hong Kong’s exchange declined to comment.Read more: JD Is Said to File for $2 Billion Hong Kong Second Listing Shares in U.S.-listed Chinese companies have see-sawed since senators overwhelmingly approved legislation Wednesday that could bar the country’s firms from American exchanges. The decision cast a pall of uncertainty over hundreds of billions of dollars of shares in some of the world’s best-known companies. China this week also moved towards national security legislation for Hong Kong, sowing panic in the city’s $5 trillion stock market.Read more: Hong Kong Stocks Crash On New Concern Over City’s FutureEven if the delisting bill is eventually approved, the impact on China’s largest tech corporations remains unclear. American lawmakers have long raised red flags over the billions of dollars flowing into the Asian country’s biggest firms, much of it from pension funds and college endowments in search of fat investment returns. Alarm has grown in particular that American money is bankrolling efforts by the country’s technology giants to develop leading positions in everything from artificial intelligence and autonomous driving to internet data collection.Baidu Inc. founder Robin Li told the state-backed China Daily the company was concerned about heightened scrutiny of Chinese companies and was constantly exploring options including a secondary listing in Hong Kong or elsewhere.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Nasdaq's China Crackdown Looks Halfhearted
(Bloomberg Opinion) -- Nasdaq is tightening rules on initial public offerings in an effort that looks to be targeted primarily at Chinese companies. To appreciate just how tepid its proposals are, consider this: They wouldn’t have screened out Luckin Coffee Inc., the most notorious accounting scandal involving a U.S.-listed Chinese issuer in years. On this evidence, IPO hopefuls have little to worry about — as long as they’re not too small.Companies will need to raise at least $25 million, or sell stock equal to a minimum 25% of their post-listing market capitalization, according to a Bloomberg News report that cited Nasdaq filings with the Securities and Exchange Commission. Luckin sold $645 million of shares in its IPO last May. There’s little comfort in this for the would-be Starbucks Corp. challenger: Nasdaq is seeking to delist Luckin after the company acknowledged fabricating sales transactions and fired its chief executive. Its shares, which will resume trading Wednesday, plummeted more than 75% in a single day last month. For other companies, though, the message is that the lure of IPO business still trumps U.S. government pressure to deter the flow of money into Chinese assets.The revised standards aren’t particularly punitive. Only three of 10 Nasdaq IPOs by Chinese issuers in 2020 raised less than $25 million. Last year, 10 of 29 flotations failed to meet the threshold, which is about the price of an upmarket New York townhouse. The requirement to sell at least a quarter of the business may be more painful. Half the companies selling shares this year floated less than 25%.Maybe we shouldn’t be surprised at the low bar. Chinese companies are big business after all, with a combined current market value of $380 billion on Nasdaq. The New York Stock Exchange, meanwhile, has almost $760 billion of Chinese listings — most of that accounted for by internet giant Alibaba Group Holding Ltd.There’s no sign that a rising U.S. climate of hostility to China is deterring IPO candidates. Beijing-based Kingsoft Cloud Holdings Ltd. raised $510 million this month after increasing the size of its float. Dada Nexus Ltd., an operator of crowd-sourced delivery platforms backed by Alibaba rival JD.com Inc., is currently sounding out investors for a $500 million offering. Such sales must come as welcome relief after a deals drought caused by the coronavirus lockdown.A bigger issue in rooting out fraud and malpractice is U.S. regulators’ access to company financial records and audit papers, something that China prevents. Current rules already allow Nasdaq to deny listings of companies from countries with such restrictions. Nasdaq is proposing more stringent criteria, including requiring auditors to show that they have sufficient expertise with international accounting standards in the offices doing the audit. This looks like a Band-Aid.The impression persists of an exchange that was under pressure to do something about Chinese companies — and came up with little more than the bare minimum. Just in case there was any doubt about the U.S. government’s stance, President Donald Trump’s economic adviser Larry Kudlow weighed in Tuesday to say that nobody can invest confidently in Chinese companies and the U.S. needs to protect investors from the country’s lack of transparency and accountability.Problems tend to be concentrated among the smallest and least liquid companies, so it makes sense to target them. Shares of Nasdaq-listed Chinese companies that raised less than $25 million since the start of 2017 are down an average of 60% from their IPO price — compared with a 34% average increase for all Chinese issuers selling shares during the period.(1)No one wants bit players in a world where investors have become increasingly skeptical of unprofitable technology companies. For the rest, America remains open for business — unless you’re Huawei Technologies Inc.\--With assistance from Zhen Hao Toh(1) The percentage figures are averages weighted by deal size.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Motley Fool
Is JD.com a $67 Stock?
After strong earnings, several analysts raise price targets with buy ratings for the Chinese e-commerce company.
- Motley Fool
Niu Technologies (NIU) Q1 2020 Earnings Call Transcript
Thank you for standing by and welcome to the Niu Technologies First Quarter 2020 Earnings Conference Call. Now, I will turn the call over to Mr. Jason Yang, Investor Relations Manager of Niu Technologies.
- Motley Fool
Is JD.com Stock a Buy?
Shares of JD.com (NASDAQ: JD) recently jumped to an all-time high after the Chinese e-commerce company posted its first-quarter numbers. Its revenue rose 21% annually to 146.2 billion yuan ($20.6 billion), beating estimates by $1.
- Bloomberg
Hang Seng Revamps Benchmark Index to Open Door for Alibaba
(Bloomberg) -- Hong Kong’s Hang Seng Index will include dual class shares and secondary listings, allowing Chinese giants such as Alibaba Group Holding Ltd. into the city’s benchmark to provide a potential boost for passive investors who have for years struggled with lackluster returns.Hang Seng Indexes Co., announced the long-awaited change on Monday in Hong Kong, a step that will help move the benchmark away from a heavy dominance of financial shares. Dual class and secondary listings will each be subject to a 5% weighting cap, surprising some investors who had been hoping for a 10% weighting for Alibaba, for example.The move came after “overwhelming market support,” HSI said. Any changes will come into effect during the August 2020 index review and encompass only companies coming from Greater China.The shift will affect about $30 billion in pension fund assets and exchange-traded funds that track the index, and could spur a flood of local share sales by U.S.-listed firms. Dual class shares were long blocked from listing in Hong Kong due to concerns over the unequal voting rights until Xiaomi Corp. became the first in 2018. Alibaba joined the bourse last year after a $13 billion secondary listing.Meituan Dianping, China’s largest food-delivery website, is also a potential candidate for inclusion, while JD.com Inc. is considering a secondary listing of its own in the city.“It’s a bit surprising to me that Hang Seng caps the market weight at 5%,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai Co. “But it’s understandable, since the indexer might want to take it step by step to avoid a sudden change on the Hang Seng Index, since each tech firm is relatively very big by market cap.”Wen expects the cap to lifted eventually to 10%, “but it won’t happen in the next 3 to 6 months.”Daniel Wong, a director at HSI, said at a press conference that the cap “has room to rise.”About half of the total weighting of the Hang Seng Index is in financial firms, compared with about 15% on average for benchmarks in Europe, the U.S., Japan and mainland China, according to data compiled by Bloomberg. The gauge has gained 1.7% a year on average in the past decade, versus 5.2% for the MSCI All-Country World Index. In January, the Hang Seng approached its lowest level relative to the MSCI measure since 2004.HSI said that any shares that carry weighted voting rights, typically those held by the founders of the company, will be considered as non-freefloat, and not eligible for the index. While for secondary listings, any shares held as overseas depositary receipts will be ineligible, further limiting the impact of Alibaba on the index.“Aibaba has about 20% of total outstanding shares in Hong Kong and the remaining are in the U.S.,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd., by phone from Hong Kong. “Even if WVR shares and U.S. portions are not counted as free float in Hang Seng’s calculation, it still easily has a 5% weight if included into the index.”Separately, the HSI consultation conclusion also said no additional limits will be placed on financial stocks.Managers of passive index pension funds will now have to follow the adjustment to include weighted voting rights shares, said Michael Chan, managing director of Hong Kong-based Gain Miles MPF Consultant Ltd. Despite institutional concerns over the corporate governance issues of dual class share companies, which gives some shareholders more weight than others, Chan said it won’t create much stir locally since retail investors are largely indifferent to how their pension money is placed.(Adds comment from HSI in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Hang Seng Index Set for Major Revamp That Paves Way for Alibaba
(Bloomberg) -- The 50-year old Hang Seng Index is poised to embrace change, and it couldn’t come soon enough for investors forced to put up with years of dismal underperformance.On Monday at around 4:30 p.m. in Hong Kong, the compiler of the gauge is expected to announce whether companies with secondary listings and unequal voting rights will be included for the first time, namely Alibaba Group Holding Ltd. Doing so would open the door to transforming the Hang Seng from a gauge overstuffed with banks and insurers to one that better reflects the technological dynamism of China’s economy.Alibaba -- one of China’s most valuable companies -- launched a secondary listing in Hong Kong in November. Another potential candidate for inclusion is Meituan Dianping, China’s largest food-delivery website, while JD.com Inc. is considering a secondary listing of its own in the city. With almost $30 billion of pension-fund assets and exchange-traded funds tracking the gauge as of December, such a change could spur a flood of local share sales by U.S.-listed firms.“The decision is going to completely change the nature of index, which has been characterized as one with low valuation and low growth rate for a long time,” said Yang Lingxiu, strategist at Citic Securities Co.About half of the total weighting of the Hang Seng Index is in financial firms, compared with about 15% on average for benchmarks in Europe, the U.S., Japan and mainland China, according to data compiled by Bloomberg. The gauge has gained 1.7% a year on average in the past decade, versus 5.2% for the MSCI All-Country World Index. In January, the Hang Seng approached its lowest level relative to the MSCI measure since 2004.The process of adding the likes of Alibaba may take some time, however. “In order to reduce the one-off impact on the market, the index may propose adding the weight of Alibaba gradually,” said Chi Man Wong, analyst at China Galaxy International Financial Holdings. Alibaba is the biggest company listed in Hong Kong by market cap and is the second most actively traded stock in the past 30 days, just after the Hang Seng Index’s largest component Tencent Holdings Ltd., according to data compiled by Bloomberg.The index would need to delete two companies to add Alibaba and Meituan, as current rules require the number of firms on the gauge to be fixed at 50. Component maker AAC Technologies Holdings Inc. and snack firm Want Want China Holdings Ltd. are among likely candidates for deletion due to their smaller market capitalization, according to traders.The addition would raise the Hang Seng Index’s forward price-to-earnings ratio to about 12 from the current 11, making it more expensive than Shanghai Composite Index, data show.Ultimately, the weight of technology and consumer discretionary sectors’ could surge from the current single digits to more than 30%, if all U.S.-listed Chinese companies that match the Hang Seng’s requirements list in the city and are included in the index, according to Citic Securities Co.To be sure, giving greater weight to companies with unequal voting rights could raise investor concerns.“The key issue is that weighted voting rights create an opportunity for someone to have greater influence than their economic ownership would suggest,” said Gabriel Wilson-Otto, head of stewardship Asia Pacific at BNP Paribas Asset Management. “The underlying concern is that this heightens the potential for agency risk, and reduces avenues of recourse if the company does something that’s not in the best interests of the minority shareholders.”Investors in some U.S-listed Chinese firms have recently been burned by accounting scandals, raising questions about the standard of corporate governance at some companies.Two Accounting Scandals in a Week Burn China Inc. Investors (1)The Hang Seng Index would nevertheless benefit from luring more U.S.-listed companies, said Cliff Zhao, head of strategy with CCB International Securities Ltd.“More funds will be attracted to follow the index, which is a good thing for Hong Kong’s stock market.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Motley Fool
JD.com, Inc. (JD) Q1 2020 Earnings Call Transcript
Joining me today on the call are Mr. Richard Liu, CEO of JD.com; Mr. Lei Xu, CEO of JD Retail; and Mr. Zhenhui Wang, CEO of JD Logistics; Sidney Huang, our CFO; and Jon Liao, our CSO. For today's agenda, Sidney will discuss highlights for the first quarter 2020 and other management will join the Q&A session.
- Bloomberg
Wanted: An Exchange Chief With Conflict Management Skills
(Bloomberg Opinion) -- Hong Kong’s stock-exchange operator is at a crossroads. Just like its home city, Hong Kong Exchanges & Clearing Ltd. needs to find a path through a turbulent era that reconciles its international and Chinese identities.HKEX is hunting for a new chief executive officer after Charles Li said he will step down by October next year at the latest, when his contract expires. Nicknamed “Mr. China” for his success in building trading links with mainland exchanges, Li doubled revenue during his decade leading the company. An attempt to vault HKEX into the top ranks of global exchange operators failed last year when the London Stock Exchange Group Plc rejected a $37 billion takeover approach, citing concerns over its relationship with Hong Kong’s government, which is appointed by Beijing.Li’s successor will have to carry forward his work of deepening ties with the Shanghai and Shenzhen exchanges, while keeping foreign investors happy by improving corporate governance. It’s a delicate task. The mainland Chinese markets are competitors as well as partners. Hong Kong is trying to position itself as the venue of choice for Chinese technology companies seeking to go public, especially as the U.S. market becomes less hospitable. Shanghai and Shenzhen are undertaking their own initiatives to persuade companies to list at home.Shanghai has been particularly aggressive, becoming the world’s top destination for initial public offerings in 2020 (albeit without a single overseas listing), a title that Hong Kong has held for years. While its Star market aimed at tech companies has yet to attract any big names, competition is heating up. Shenzhen, the southern city that borders Hong Kong, is preparing to emulate Shanghai by moving to a registration-based IPO system and scrapping limits on price movements on its Nasdaq-like ChiNext board.That will put a premium on finding a CEO who can match Li’s mainland connections and diplomatic prowess. With international expansion seemingly blocked off after the LSE rebuff and the coronavirus outbreak, HKEX’s growth will continue to rely heavily on cooperation with Chinese exchanges and regulators. Expanding the stock-trading pipes that Li established with Shanghai and Shenzhen is one route. HKEX scored a coup when New York-traded Alibaba Group Holding Ltd., China’s biggest company by market value, raised $13 billion in a Hong Kong secondary offering last November. Some of the sheen came off the celebrations when it emerged that Alibaba wouldn’t be included in the so-called Stock Connect programs, blocking mainland-based investors from trading the shares. Getting secondary listings on the Connect should be a priority — especially given Hong Kong is looking to woo other U.S.-listed Chinese companies such as JD.com Inc.There are further opportunities for expanding the cross-border trading links, including letting mainland investors buy overseas bonds. Currently, the three-year-old Bond Connect is a one-way system, allowing Hong Kong investors to buy mainland securities but not vice-versa. The next HKEX chief may also push for Hong Kong ETFs and IPO subscriptions to be admitted to the connect programs.At the same time, Hong Kong needs to keep its international flavor if it’s to appeal to Chinese punters who want access to global investments. HKEX slowed efforts to attract foreign listings in recent years, as volumes dimmed, having drawn some notable names including Italian luxury house Prada SpA. It should restart these. Hong Kong’s role as an international market depends critically on sustaining confidence among global investors that it is relatively clean and well governed. Under Li, the Hong Kong exchange bowed to the commercial imperative by opening the door to dual-class share structures and presided over a market where bad behavior among small-caps was endemic. His replacement will need to change Hong Kong’s reputation as a playground for short sellers such as Carson Block’s Muddy Waters and Gillem Tulloch’s GMT Research Ltd.Managing these push-pull conflicts — moving closer to China while becoming more international, building up business while improving governance — will take some dexterity. Li has said he may leave before the end of his term if a successor is found. An early exit is far from assured.\--With assistance from Zhen Hao Toh. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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