HSBC Starts JD.com At Buy, Sees Buying Opportunity For Investors Right Now

• The share price of JD.Com Inc (ADR) JD has appreciated 20.57 percent year-to-date, from a low of $23.14 on December 31, 2014.
• Chi Tsang of HSBC Global Research has initiated coverage of the company with a Buy rating and price target of $37.
• While mentioning that the current stock valuation offers an attractive buying opportunity, Tsang said that investor concerns regarding the impact of a slowing economy on online shopping in China was overdone.

According to the HSBC report, “JD.com’s success has been driven by two things: selling authentic goods and offering customers a market-leading delivery experience in China.”

Analyst Chi Tsang believes that the company has built an “extensive” logistics system, while hiring and training an in-house delivery team that is the largest in China. JD.com is also in the process of constructing a series of modern, customized warehouses.

“Currently, JD.com’s 48k couriers can deliver the same day in 135 cities and next day in 951 cities. 85% of its orders were delivered the same day or next day in 2Q,” the report stated.

Tsang expects the company to remain ahead of the competition in the foreseeable future in terms of delivery. “JD.com will benefit from market growth and its business model is difficult to replicate,” Tsang added.