Alibaba (BABA) and JD.com (JD) Shine After NBS Releases China Data - Nomura
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Nomura analyst, Jialong Shi, highlighted Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD) as his top two picks after the National Bureau of Statistics (NBS) released China retail data for August 2017 on 14 September.
China ecommerce growth maintained a positive trajectory in August, as China’s online retail sales (excluding the sales of virtual goods and services) were CNY428bn, up 38% y-y vs 32% y-y growth noted in July.
The analyst stated "Alibaba and JD remain our two preferred plays in China e-commerce. For Alibaba, we value its core commerce business at USD459bn based on 20x CY18F EV/EBIT, and its Cloud business at USD10.7bn based on 4x CY18F sales. We value Alibaba’s holding value in Ant Financial at USD19.8bn and in its investees at USD14.9bn. "For JD, we value the stock based on DCF methodology, assuming a 10.7% WACC and 3% terminal growth rate".
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