2. JD.com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders: 66
JD.com, Inc. (NASDAQ:JD) is an e-commerce company and retail infrastructure service provider based in China. The company was highly impacted by the Chinese regulations on tech, and the shares dropped almost 24% in the last 12 months.
Han Joon Kim of Macquarie in May 2021 stated that JD.com, Inc. (NASDAQ:JD) is expected to keep growing its user base and the company isn’t facing any major regulatory headwinds, since JD.com, Inc. (NASDAQ:JD) understands the Chinese tech requirements and is diversifying its asset composition in a way that its expertise helps the Chinese government. Additionally, China is loosening its money controls, and the lower interest rates, coupled with JD.com, Inc. (NASDAQ:JD)’s strong logistics and delivery infrastructure, is another reason the stock could rebound in 2022.
On January 26, JD Stifel analyst Scott Devitt lowered the price target on JD.com, Inc. (NASDAQ:JD) to $95 from $110 and kept a Buy rating on the shares as he previewed results for his China e-commerce coverage ahead of the December quarter reports from the group.
JD.com, Inc. (NASDAQ:JD) and Shopify Inc. (NYSE:SHOP) announced on January 18 that they “have come together to create a strategic partnership to give independent brands in the US a simple, trusted way to access consumers in China, while simultaneously enabling Shopify merchants worldwide to access JD’s quality supplier network”. The partnership links JD.com, Inc. (NASDAQ:JD)’s 550 million active customers in China to Shopify’s worldwide merchants. JD.com, Inc. (NASDAQ:JD) will open an accelerated channel for brands on Shopify to list products through JD Worldwide. This will also allow increased exposure to domestic Chinese brands.
In Q3 2021, 66 elite hedge funds were bullish on JD.com, Inc. (NASDAQ:JD), with stakes totaling $9 billion. Billionaire Daniel Sundheim’s D1 Capital Partners increased its stake in the Chinese e-commerce giant by 15% in Q3, holding a total of 17.7 million shares worth $1.28 billion.
Here is what Argosy Investors has to say about JD.com, Inc. (NASDAQ:JD) in its Q3 2021 investor letter:
“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
