Back to annoy everyone with another Chinese stock and to convince myself not to increase my exposure to China...
Most people have probably heard of [JD.com](http://JD.com) the Chinese e-commerce company, it has similarities to the e-commerce and logistics of Amazon or Coupang, but doesn't really have cloud and lacks a large premium membership base. I obviously don't think it's nearly as good of a business as Amazon, but it is very cheap...
JD's market cap is around $38B, they do a ton of revenue with very low margins and have fierce competition on all sides. The company has a healthy balance sheet with net cash position of $15-20B. They've listed subsidiaries over the past few years in JD Health and JD Logistics...
JD Health - $15B market cap, JD owns 66% = $10B value or $7B with a 30% conglomerate discount
JD Logistics - $10B market cap, JD owns 60% = $6B value or $4.2B
So a $38B company - $15B cash (conservative w/ heavy investments) - $7B - $4B = $12B for the "main" JD business. JD retail is actually a pretty strong business they are just losing a lot of money on their investments in food delivery and overseas expansion.
JD retail made $7.4B in net income in 2025 which includes JD health which looks like just less than $2B of that net income. They lost almost all of that on their "new business." So without that expansion you'd be paying about 3x earnings for the main JD business based on these estimates.
Competition is fierce, the Chinese consumer is not particularly strong, and I'm not saying JD is the best business in the world (they do have very strong logistics) but amongst that they still grew total revenue 13% last year.
It's very cheap today because it's in China... the main issue is their expansion and spending which I see basically going one of three ways:
Best case - It works out and they start to make some money from food delivery and international you'd start to see the healthy retail segment in their bottom line and earnings would increase dramatically
Middle - It doesn't work out but they decide to cut their investments or ditch food delivery - fundamentals still improve bc they drop the money losing segments, this scenario is almost as good in my opinion IF they actually decide to stop spending
Worst - they continue to lose money on food delivery and international expansion in which case I think the stock just stagnates but would rise with any positive sentiment on China overall
Yes regulatory risks, yes everyone knows what a VIE is, every company and every geography has risk. I'd love to know if any of this analysis is wrong I did it fairly quickly... **you could also just buy JD logistics which is the strongest piece for under 10x earnings...**
EDIT: I forgot they also spun off JD Industrials which has a $5B market cap