Nomura: JD (JD.US), Pinduoduo (PDD.US), etc. are preferred for Chinese e-commerce stocks or to outperform the market in the short term

The Zhitong Finance App learned that Nomura said that a series of stimulus policies launched by China at the end of September focus on stabilizing real estate and boosting consumer demand. If consumer sentiment improves, it is expected that China's e-commerce sector has the potential to outperform the market in the short term. The bank's short-term preferred stocks are JD (JD.US), Pinduoduo (PDD.US), and Alibaba (BABA.US), all rated as “buy.”

Among them, Nomura raised the target price of JD US stocks (JD.US) by 39.5% from 38 US dollars to 53 US dollars, mainly due to China's latest stimulus plan or improvement in the overall retail environment, plus the expectation that JD's third-quarter profit exceeded expectations, and raised JD's profit forecast for the whole year. Nomura expects that JD's revenue for the third quarter will meet expectations and increase by 5% year on year, but profits will exceed expectations. The bank expects adjusted earnings per share to increase 14%, 3% higher than market expectations.

According to Nomura, JD's retail revenue for the third quarter increased 5% year on year, and the adjusted operating profit margin remained at about 5.2%. Among them, the electronics category is likely to grow by 3%, reversing the 5% decline in the second quarter, mainly because many provinces in China have implemented trade-in subsidies for various electronic products, mainly for home appliances. As one of the largest sales channels in the electronic product category, JD can continue to benefit.

Nomura raised JD's net profit for the full year of the current fiscal year by 2%, mainly due to higher revenue expectations from JD Logistics, and estimates that JD Retail's revenue for the whole year will increase by 4.7%, and the operating profit margin may expand to 3.9%.