8 Most Promising Chinese Stocks According to Hedge Funds

3. JD.com, Inc. (NASDAQ:JD)

Number of Hedge Fund Holders: 59

JD.com, Inc. (NASDAQ:JD) is a top Chinese e-commerce company, specializing in retailing consumer electronics, apparel, and household products. The company also operates other segments including, logistics, marketing services, and property classifieds, as well as other innovative technology initiatives.

JD.com, Inc. (NASDAQ:JD) is expanding its third-party merchant platform with significant investments and aims to achieve a more optimized product mix that will attract stronger revenue growth and increase profit margins. These developments show that JD.com is positioning itself for long-term success and competitiveness in the e-commerce market, underlining why JD is one of the most promising Chinese stocks.

The Chinese firm is utilizing cutting-edge technologies such as drones and AI to improve its logistics and supply chain capabilities. Ariel Investments stated the following regarding JD.com (NASDAQ:JD) in its first quarter 2024 investor letter:

“We initiated a position in China-based technology-driven E-commerce company, JD.com, Inc. (NASDAQ:JD). The brand has long been known across the region as a superior online shopping channel due to its unique first-party model and unparalleled fulfilment service underpinned by JD Logistics. Yet, a challenging macro environment drove shares lower as shoppers began seeking bargains. In response, the company made significant investments in elevating its third-party merchant platform to enhance its variety of product offerings and price competitiveness for consumers. We believe these actions will yield an improved product mix, stronger top-line growth, and margin expansion on a go-forward basis.”

JD.com, Inc. (NASDAQ:JD) has demonstrated exceptional financial growth, with a 5-year net income compound annual growth rate (CAGR) of 38.36%. During Q2 2024, the company exceeded earnings estimates by $0.47 per share, reporting an EPS of $1.14. The revenue was reported around $40.66 billion and surpassed estimates by $435.97 million.

JD.com is trading 10.75 times its forward-year earnings, which represents a 37% discount to the sector median of 17.14. The company’s earnings are expected to grow by more than 27% this year. This low forward P/E and anticipated increase in EPS shows JD is a cheap stock.