SunTrust's Bob Peck Initiates Coverage On China's 'Largest eCommerce Direct Seller'

In a note released Tuesday morning, SunTrust analyst, Bob Peck, initiated coverage on JD.com, Inc.

with a Buy rating and a 2015 price target of $35. Peck began by noting that JD is the clear leader in China's eCommerce direct sales with 47 percent market share. The nearest competitor lags far behind with only 11 percent. JD's core business, think Amazon's first party business, brings in 97 percent of the company's revenue and grew 64 percent in the first quarter of 2014 from the fourth quarter in 2013. In addition to being China's leader in eCommerce direct sales, JD also has the country's second largest marketplace business. According to Peck, this segment of the company grew revenue by 117 percent last quarter and is responsible for approximately 25 percent of the company's gross merchandise volume. Looking forward, Peck sees "strong" revenue growth and improving margins. For 2013 - 2016, Peck is forecasting a 48 percent CAGR and says margins should increase by approximately five percent over time.