JD Rallied, Sea Slumped: What Happened
Chinese e-commerce firm JD (JD) and Singapore-based gaming and e-commerce firm Sea (SE) are two divergent tales. JD initially rallied to $29 before backing down. Sea stock sold off after its earnings report.
JD reported Q3 non-GAAP EPADS of $0.92. Revenue barely grew, up by 1.7% Y/Y to $34 billion. The firm has over $34 billion in cash on its balance sheet. This is close to its market capitalization of ~ $38 billion. It has the chance to accelerate its $5 billion buyback to take advantage of its low stock price.
JD's FCF yield is too good to ignore. Investors who are willing to get exposure to the US/China geopolitical risks and the country's weak economy may still consider JD stock.
Sea slumped from over $45 to below $38 last week. It posted a loss in Q3 of $143.99 million, compared to losing $569.3 million last year. Its e-commerce platform Shopee, however, posted a net income of $331 million. Competition from Alibaba (BABA) and TikTok, owned by ByteDance (BDNCE) is a headwind to its operations across Southeast Asia.
Indonesia banned TikTok in Oct. The positive impact has yet to show up in its results.
JD and SE stocks are high-risk out-of-favor stocks worth watching closely.
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.