JD

JD.com, Inc.

64.85
USD
0.48%
64.85
USD
0.48%
41.56 92.69
52 weeks
52 weeks

Mkt Cap 86.70B

Shares Out 1.34B

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Why JD.com, Zhihu, and TAL Education Group Are Up Today

What happened Several Chinese stocks rose today as more Chinese companies reported solid earnings results despite COVID-19 lockdowns that threaten to hurt economic growth in the country. Shares of the large e-commerce firm JD.com (NASDAQ: JD) are trading more than 6% higher as of 12:22 p.m. ET today. Shares of the question-and-answer content website Zhihu (NYSE: ZH) are trading nearly 18% higher, while shares of the tutoring company TAL Education Group (NYSE: TAL) are trading nearly 11% higher. So what Earlier this morning, the large Chinese e-commerce company Alibaba (NYSE: BABA) reported adjusted earnings per American Depositary Share equivalent to $1.25 for the quarter ending in March on total revenue of roughly $32.2 billion. Both numbers beat analyst estimates. Alibaba also hit its goal of providing service to more than 1 billion consumers and said that despite the impact of rising COVID cases in China, the company expects to generate strong operating cash flow this year. The results of Alibaba seem to be helping most Chinese stocks trading on U.S. exchanges today. Zhihu also reported earnings results yesterday, delivering earnings per American Depositary Share equivalent to -$0.16, which slightly missed estimates. Revenue equivalent to roughly $117.2 million beat estimates. Zhihu's revenues grew more than 55% year over year (YOY), and the company maintained its gross margin of 45% despite the challenging economic backdrop. The company also further diversified its revenue. JD.com also pleased investors last week when the company beat revenue estimates, despite growing revenue in the quarter by only 18% YOY, the slowest YOY revenue growth the company has ever experienced. The Chinese government also held an impromptu nationwide media video conference yesterday to discuss the country's economy and how it plans to support it. "The difficulties, in some areas and to a certain degree, are even greater than the severe shock of the pandemic in 2020," Premier Li Keqiang said during the conference, according to CNBC. Goldman Sachs analysts yesterday wrote in a research note that "Chinese policymakers are in greater urgency to support the economy after the very weak activity growth in April, anemic recovery month-to-date in May, and continued increases in unemployment rates." Now what The Chinese government would like China to achieve 5.5% gross domestic product growth this year, which is looking increasingly difficult, as COVID lockdowns have started to really cut into growth. Most analysts have already significantly cut their GDP expectations for China's economy this year, largely due to the intense lockdowns in China. But some of these tech companies, like JD.com, Zhihu, and TAL, may end up being OK. While it's early, Chinese tech stocks have demonstrated resilience through the first three months of the year at least, although most of them are removing guidance for the rest of the year. Additionally, JD.com is down more than 27% over the last year, while Zhihu and TAL are both down roughly 82% and nearly 90%, respectively. The Chinese government is now pledging support to Chinese tech stocks and also saying that it plans to ease up from a regulatory standpoint, so some of the selling on certain Chinese stocks may be overdone at this point, despite COVID concerns. 10 stocks we like better than JD.com When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and JD.com wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 27, 2022 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs and JD.com. The Motley Fool recommends TAL Education Group. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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