You are on page 1of 4

Quantitative Equity Report | Release: 23 Jul 2018, 22:03 UTC | Reporting Currency: CNY | Trading Currency: USD | Exchange:XNAS

Page 1 of 4

JD.com Inc ADR JD QQQQQ 23 Jul 2018 02:00 UTC
Last Close Fair ValueQ Market Cap Sector Industry Country of Domicile
23 Jul 2018 23 Jul 2018 02:00 UTC 23 Jul 2018
35.66 41.58 50,876.0 Mil a Technology Internet Content & CYM Cayman Islands
Information
There is no one analyst in which a Quantitative Fair Value Estimate and Quantitative
Star Rating are attributed to; however, Mr. Lee Davidson, Head of Quantitative
Price vs. Quantitative Fair Value
Research for Morningstar, Inc., is responsible for overseeing the methodology that 2014 2015 2016 2017 2018 2019 Quantitative Fair Value Estimate
supports the quantitative fair value. As an employee of Morningstar, Inc., Mr. Total Return
Davidson is guided by Morningstar, Inc.’s Code of Ethics and Personal Securities
Trading Policy in carrying out his responsibilities. For information regarding Conflicts Sales/Share
60
of Interests, visit http://global.morningstar.com/equitydisclosures Forecast Range
Forcasted Price
48 Dividend
Company Profile
Split
JD.com is China's second-largest e-commerce company after Momentum: —
36
Alibaba in terms of transaction volume, offering a wide Standard Deviation: 34.28
selection of authentic products at competitive prices, with Liquidity: High
24
speedy and reliable delivery. The company has built its own
nationwide fulfilment infrastructure and last-mile delivery 34.76 52-Wk 50.68
network, staffed by its own employees, which supports both 12

its online direct sales and its online marketplace businesses.
JD.com launched its online marketplace business in 2010.
— 39.4 -21.2 62.8 -13.9 Total Return %
— 38.7 -33.6 41.3 -20.4 +/– Market (Morningstar US Index)
— — — — — Trailing Dividend Yield %
Quantitative Scores Scores
— — — — — Forward Dividend Yield %
All Rel Sector Rel Country
Quantitative Moat None 33 48 52 — -34.2 -25.3 -181.8 263.2 Price/Earnings
Valuation Undervalued 73 67 68 2.9 2.2 1.2 1.1 0.9 Price/Revenue
Quantitative Uncertainty High 96 98 99 Morningstar RatingQ
Financial Health Strong 85 77 78 QQQQQ
QQQQ
QQQ
JD QQ
Q
a
CYM

2013 2014 2015 2016 2017 TTM Financials (Fiscal Year in Mil)
Undervalued Fairly Valued Overvalued 69,340 115,002 181,287 260,122 362,332 387,241 Revenue
67.6 65.9 57.6 43.5 39.3 6.9 % Change
Source: Morningstar Equity Research
-579 -5,802 -3,709 -2,145 8 -649 Operating Income
— — — — — -8,241.0 % Change
Valuation Sector Country
Current 5-Yr Avg Median Median -50 -4,996 -9,378 -3,807 -152 1,134 Net Income
Price/Quant Fair Value 0.86 1.04 0.91 0.91 3,570 1,015 -1,812 8,767 24,821 16,577 Operating Cash Flow
Price/Earnings 261.4 — 24.3 15.7 -1,292 -2,902 -5,300 -4,460 -11,356 — Capital Spending
Forward P/E 59.5 — 18.2 15.4 2,278 -1,887 -7,111 4,307 13,465 5,221 Free Cash Flow
Price/Cash Flow 21.2 — 17.0 12.1 3.3 -1.6 -3.9 1.7 3.7 1.3 % Sales
Price/Free Cash Flow 67.4 — 25.1 18.1 — -10.70 -6.86 -2.72 -0.10 0.78 EPS
Trailing Dividend Yield % — — 1.71 2.94 — — — — — — % Change
Price/Book 6.3 — 2.5 1.5 — 0.26 -0.04 -0.75 1.46 0.54 Free Cash Flow/Share
Price/Sales 0.9 — 1.9 1.5 — — — — — — Dividends/Share
— 4.37 4.05 3.56 5.50 5.75 Book Value/Share
Profitability Sector Country
— 1,397 1,397 1,428 1,434 1,427 Shares Outstanding (Mil)
Current 5-Yr Avg Median Median
Profitability
Return on Equity % 2.5 -54.1 12.2 12.2 -47.2 -55.4 -27.6 -11.8 -0.4 2.5 Return on Equity %
Return on Assets % 0.6 -10.9 6.3 5.5 -11.3 -28.0 -12.4 -3.1 -0.1 0.6 Return on Assets %
Revenue/Employee (Mil) 2.4 1.9 0.5 1.0
-3.6 -11.3 -5.2 -1.5 0.0 0.3 Net Margin %
3.16 2.49 2.39 2.12 2.10 2.18 Asset Turnover
Financial Health Sector Country
Current 5-Yr Avg Median Median
2.8 1.8 2.8 4.7 3.5 3.4 Financial Leverage
9.9 11.6 13.4 15.2 14.0 14.0 Gross Margin %
Distance to Default 0.7 0.7 0.6 0.6
Solvency Score 807.0 — 465.2 484.4 -0.8 -5.1 -2.1 -0.8 0.0 -0.2 Operating Margin %
Assets/Equity 3.5 3.1 1.6 1.7 — — 2,754 10,909 10,923 7,227 Long-Term Debt
Long-Term Debt/Equity 0.2 0.2 0.1 0.2 9,240 37,498 30,541 33,893 52,041 54,200 Total Equity
42.5 34.9 30.6 30.8 22.5 29.1 Fixed Asset Turns
Growth Per Share Quarterly Revenue & EPS Revenue Growth Year On Year %
1-Year 3-Year 5-Year 10-Year Revenue (Bil) Mar Jun Sep Dec Total
Revenue % 40.3 46.6 54.3 — 2018 100.1 — — — —
Operating Income % — — — — 2017 76.2 93.2 83.7 110.2 362.3
47.3 48.8
Earnings % — — — — 2016 54.0 65.2 60.7 81.2 260.1 42.0 42.9
41.2
2015 36.6 45.9 44.1 54.6 181.3 37.7 37.9 35.6
Dividends % — — — — 31.4
Book Value % 52.9 10.6 — — Earnings Per Share ()
Stock Total Return % -17.2 0.9 — — 2018 1.04 — — — —
2017 0.16 -0.34 0.70 -0.64 -0.10
2016 -0.66 -0.18 -0.64 -1.22 -2.72
2016 2017 2018
2015 -0.52 -0.38 -0.38 -5.58 -6.86

© Morningstar 2018. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and ®

opinions presented herein do not constitute investment advice; are provided solely for informational purposes and therefore is not an offer to buy or sell a security; are not warranted to be correct, complete or accurate; and
are subject to change without notice. Except as otherwise required by law, Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, the information, data, ß
analyses or opinions or their use. The information herein may not be reproduced, in any manner without the prior written consent of Morningstar. Please see important disclosures at the end of this report.

Log (Quant FVE/Price) > 1*Quantitative Uncertainty The quantitative report on equities consists of data. estimate. Quantitative Financial Health: Intended to reflect the probability that a the “Quantitative Ratings). http://global. -0. Wide.5*Quantitative guarantee the completeness or accuracy of the assumptions or models used in Uncertainty) determining the quantitative equity ratings. analyses and ® opinions presented herein do not constitute investment advice.morningstar. is Medium – the interquartile range for possible fair values is less than 15% responsible for overseeing the methodology that supports the quantitative but greater than 10% equity ratings used in this report. Moderate – assigned when Quantitative Financial Health is between 0. statistics. and tax rate.com/equitydisclosures for information about Fair Undervalued – Last Price is below Morningstar’s quantitative fair value Value Estimate Morningstar’s equity analysts assign to companies. or None. security’s current investment performance may be lower or higher than the One-Star – the stock is overvalued with a reasonable margin of safety. Quantitative Fair Value Estimate: Intended to represent Morningstar’s estimate of the per share dollar amount that a company’s equity is worth today. when redeemed. current market price. Inc. The information.’s quantitative equity uncertainty about the accuracy of the Quantitative Fair Value Estimate.the stock is somewhat overvalued. and are subject to change without notice. an and the Quantitative Uncertainty Rating. The rating is expressed as Narrow. Inc. It is calculated using an algorithm designed to estimate. Log (Quant FVE/Price) < -1*Quantitative Uncertainty Two-Star . the information. investor’s shares may be worth more or less than their original cost. In addition. Quantitative Economic Moat: Intended to describe the strength of a Overvalued – Last Price is above Morningstar’s quantitative fair value firm’s competitive position. The quantitative equity ratings are not statements of fact. . Risk Warning None – assigned when the probability of an analyst receiving a “Wide Please note that investments in securities are subject to market and other risks Moat” rating by an analyst is less than 70%. Please see important disclosures at the end of this report. Quantitative Valuation– Using the below terms. Narrow – assigned when the probability of a stock receiving a “Wide Moat” This Report has not been made available to the issuer of the security prior to rating by an analyst is greater than 70% but less than 99%. (ii) Quantitative Star Rating.5*Quantitative Uncertainty. you may use this report only in the country in which its original distributor is based. Inc. however. Other Definitions i. 1*Quantitative Quantitative Equity Reports Overview Uncertainty) Five-Star – the stock is undervalued with a reasonable margin of safety. damages or other losses resulting from. ß analyses or opinions or their use. i. “we”. Head of Quantitative Research for Morningstar. Very High.5*Quantitative Uncertainty. As an employee of Morningstar. Lee Davidson.2 driven ratings of a company’s peers as determined by statistical algorithms. Low – the interquartile range for possible fair values is less than 10% Mr. Except as otherwise required by law. complete or accurate.5*Quantitative demand for the company’s products. and Five-Star. ratings are forward looking and are generated by a statistical model that is Generally. competitive pressure. data.’s Code of Ethics and Personal Securities greater than 15% Trading Policy in carrying out his responsibilities. “our”) calculates Quantitative Ratings and 0. there is the risk that the Three-Star – the stock is approximately fairly valued. For © Morningstar 2018. costs. and an investor’s principal value will fluctuate so that. intended to denote the model derived from the Fair Value Estimate Morningstar’s equity analysts relationship between the security’s Last Price and Morningstar’s quantitative assign to companies. Morningstar shall not be responsible for any trading decisions.7 coverage. data. operating and/or material Four-Star – the stock is somewhat undervalued. High – the interquartile range for possible fair values is less than 35% but Davidson is guided by Morningstar. The Quantitative Ratings are calculated daily and derived from the analyst- Weak – assigned when Quantitative Financial Health < 0.2 Morningstar.’s analyst-driven equity ratings and quantitative range of outcomes for that particular company. Please go to fair value estimate for that security. Three-Star.Quantitative Equity Report | Release: 23 Jul 2018. Very High – the interquartile range for possible fair values is less than 80% but greater than 35% Extreme – the interquartile range for possible fair values is greater than Quantitative Equity Ratings 80% Morningstar’s quantitative equity ratings consist of: (i) Quantitative Fair Value Estimate.. A security investment return the combination of our Quantitative Fair Value Estimate. All Rights Reserved. (iv) Quantitative Economic Moat. investment performance noted within the report. Inc. and (v) Quantitative Financial Health (collectively v. Mr. statistics and quantitative iv. price target will not be met due to such things as unforeseen changes in Log (Quant FVE/Price) between (-0. Unless otherwise provided in a separate agreement. Wide – assigned when the probability of a stock receiving a “Wide Moat” rating by an analyst is greater than 99%. the lower the Quantitative Uncertainty. and Extreme. A Two-Star. (iii) Quantitative Uncertainty. (“Morningstar”. Last Close – Price of the stock as of the close of the market of the last trading day before date of the report. In some cases. publication. 22:03 UTC | Reporting Currency: CNY | Trading Currency: USD | Exchange:XNAS Page 2 of 4 Log (Quant FVE/Price) between (0. the narrower the potential based on Morningstar Inc. The information herein may not be reproduced. ratings. The calculation uses a predictive model designed to anticipate when a company may default on its financial obligations. interest rate development. Moderate. in any manner without the prior written consent of Morningstar.. Given the nature of the quantitative report and the quantitative Medium. The rating is expressed as Weak. The rating is expressed as Low. exchange rate. are provided solely for informational purposes and therefore is not an offer to buy or sell a security. firm will face financial distress in the near future. the Quantitative Ratings may differ from the analyst ratings because a company’s analyst-driven ratings can significantly differ from other companies in its peer group. The rating is expressed as One-Star. High. changes in management. predict the Economic Moat rating a Morningstar analyst would assign to the stock. Morningstar calculates the Quantitative Fair Value Estimate using a statistical ii. Quantitative Star Rating: Intended to be the summary rating based on future and is no indication of future performance. are not warranted to be correct. supervisory law. technology. there is no one analyst in which a given report is attributed to. and there is no assurance or guarantee that the intended investment objectives will be achieved. Farily Valued – Last Price is in line with Morningstar’s quantitative fair value estimate. Inc. Morningstar. or related to. 0. and Strong. Past performance of a security may or may not be sustained in iii. ii. Uncertainty) economic development. Four-Star. Morningstar does not Log (Quant FVE/Price) between (-1*Quantitative Uncertainty.7 for companies whether or not it already provides analyst ratings and qualitative Strong – assigned when Quantitative Financial Health > 0. Quantitative Uncertainty: Intended to represent Morningstar’s level of equity ratings on equity securities.

For more information about Morningstar’s quantitative methodology. a U. damages or other losses resulting from. please click personal and financial situation. of the security.S.. information relevant to its investment objectives. Such Distributors are not acting as agents or representatives of the analyst or Morningstar. or Beneficial Owners and Management” section related to.. damages or other losses resulting from. The information herein may not be reproduced. such assessments investment research report that exceeds 0. is as of the date of the Report and are subject to change. The quantitative equity ratings are not a market call. experience. 22:03 UTC | Reporting Currency: CNY | Trading Currency: USD | Exchange:XNAS Page 3 of 4 investments in foreign markets there are further risks. The Report is for informational purposes associated with any part or section of a report that has been issued in a foreign only. directors and employees shall not be responsible access Morningstar.morningstar. Morningstar.5% of the total issued share capital take into account may factors including a person’s investment objective. Morningstar.corporate. General Disclosure availability or use would be contrary to law or regulation or which would subject Morningstar or its affiliates to any registration or licensing requirements in such jurisdiction. Therefore. or Morningstar affiliates guarantee (“Users”) and should not be the sole piece of information used by such Users or the accuracy of the translations. including the fundamental factors underlying the quantitative equity ratings can mean without limitation. This report was created with no regard to investment objectives. intended for financial professionals and/or sophisticated investors language. country or other jurisdiction where such distribution. financial situation or particular needs of any specific User or User’s clients. its investment management group) have light of their own investment objectives. Unless otherwise provided in a separate agreement.’s total outstanding shares. management/investment advice some of which an analyst may issue investment research reports on. data. explicitly stated. Inc. taxation status and arrangements with financial institutions to provide portfolio financial position. complete or timely. The Head of Quantitative Research compensation is derived from Morningstar's Prices noted with the Report are the closing prices on the last stock-market overall earnings and consists of salary. circulars.morningstar. In Territories where a Distributor The quantitative equity ratings noted the Report are provided in good faith. However. Please Morningstar and its officers. analyses or opinions within the report. correct. including laws in connection with the distribution third-party research of the data. countries and/or jurisdictions of the data. http://investorrelations. .morningstar.com.g.com. recipients accessing this charge companies to be rated. the English version will control and supersede any ambiguities is subject to change without notice. and do not replace the Conflicts of Interest: User or User’s clients from conducting their own due-diligence on the security. statistics and case of inconsistencies between the English and translated versions of the information within Morningstar. data. Please see important disclosures at the end of this report. complete or accurate. bonus and restricted stock units of trading day before the publication date stated. (“Territories”) by independent third parties or independent intermediaries and/or distributors (“Distributors”). tax. all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Morningstar makes no representation that the report contents meet group to participate or influence the analysis or opinion prepared by them. own more than 5% of Morningstar. you may use this report only in the country in which its original distributor is based. statistics. Morningstar. any person or entity who is a citizen or resident of or located in any locality. statistics and information from sources it believes to be reliable. Unless otherwise provided in a separate business arrangements nor allow employees from the investment management agreement. While Morningstar has solely responsible for complying with all applicable regulations. to seek the advice of a legal. state. the Distributor. Except as otherwise required by law. is a publically traded company (Ticker Symbol: MORN) and thus a financial institution the security of which is the subject of this report may Except as otherwise required by law or provided for in a separate agreement. the Head of Quantitative Research The information. The information. report may only use it in the country in which the Morningstar distributor is based. While Morningstar has obtained data. analyses and ® opinions presented herein do not constitute investment advice. A change in documents (e. costs before making an investment decision and when deemed necessary. and that the valuation is subsequently no longer accurate. their clients in making an investment decision. the information. unless another point in time is Morningstar. The Report and its contents are not directed to. Morningstar is not a market maker or a liquidity provider of the security noted within this report. generally based on Morningstar encourages recipients of this report to read all relevant issue exchange rate changes or changes in political and social conditions. may hold a long position in the security subject of this The quantitative equity rating is not a suitability assessment. Inc. codes and guidelines established by local and/or regional regulatory Morningstar does not perform an audit or seeks independent verification of any bodies. and risk tolerance all of which are factors the http://msi. Morningstar does not receive commissions for providing research and does not Unless otherwise provided in a separate agreement. ß analyses or opinions or their use. rules. in any manner without the prior written consent of Morningstar. or intended for distribution to or use by. reports. data.’s proxy statement. All Rights Reserved. statistics. and information it receives.cfm?doctype=Proxy&year=&x=12& © Morningstar 2018.A.e. the original distributor of the report is Morningstar Inc. Inc. the information. Neither the analyst. To determine if such is the case. Morningstar has not been a lead manager or co-lead manager over the previous investments discussed and recommendations made herein may not be suitable 12-months of any publicly disclosed offer of financial instruments of the issuer.com and http://mdi. statistics and information from sources it believes to be reliable. and/or accounting professional.. and not the analyst or Morningstar. Unless stated otherwise. data and statistics presented herein are not warranted to be does not have authority over Morningstar's investment management group's accurate. quantitative equity rating statistical model does not and did not consider. Morningstar shall not be responsible for any trading decisions. “Security Ownership of Certain or liable for any trading decisions. are not warranted to be correct. and information it receives. Where this report is made available in a language other than English and in the The Quantitative Equity Report (“Report”) is derived from data. Inc. and are subject to change without notice.’s database as of the date of the Report and report. risks. are provided solely for informational purposes and therefore is not an offer to buy or sell a security. laws.morningstar. domiciled financial institution.com/sec. publication.Quantitative Equity Report | Release: 23 Jul 2018. are distributes our report. obtained data. Morningstar does not perform an audit or seeks independent verification of any This report may be distributed in certain localities. Inc. prospectus) pertaining to the security concerned. please visit www. for all investors: recipients of this report must exercise their own independent judgment as to the suitability of such investments and recommendations in the Morningstar affiliates (i. or related to. Inc.

which provides data related services. Investors should consult a financial adviser regarding the suitability of any investment product. If you wish to obtain further information regarding Morningstar’s quantitative equity reports please contact your local Morningstar office. data.au/fsg. 22:03 UTC | Reporting Currency: CNY | Trading Currency: USD | Exchange:XNAS Page 4 of 4 y=10 Private Limited offers Investment Research to clients. in any manner without the prior written consent of Morningstar. please contact a Morningstar Investment Management Asia Limited Licensed Representative at http://global. the relevant Product Disclosure Statement before making any decision to invest. and are detailed in the respective client agreement. taking into account their specific investment objectives. which is licensed by the Monetary analysts are subject to the CFA Institute’s Code of Ethics and Standards of Authority of Singapore to provide financial advisory services in Singapore. Morningstar may provide the product issuer or its related entities with services or products for a fee and on an arms’ length basis including software products For recipients in Japan: The Report is distributed by Ibbotson Associates and licenses. you may use this report only in the country in which its original distributor is based. Except as otherwise required by law.morningstar. Morningstar Investment Adviser India Private Limited is a wholly owned subsidiary of Morningstar Investment Management LLC. if applicable. The information. are not warranted to be correct. be acting as an investment advisor to any recipients of this information. Further information on Morningstar's conflict of interest policies is available For recipients in Singapore: This Report is distributed by Morningstar from http://global. Morningstar shall not be responsible for any trading decisions.morningstar. The information herein may not be reproduced. varies from client to client. To the extent the Report contains general advice it has been prepared without reference to an investor’s objectives. The Research Analyst has not served as an officer. For Recipients in Australia: This Report has been issued and distributed in Australia by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544. are acting or will be deemed to sponsorship and website advertising. Morningstar Investment Adviser India Private Limited is registered with the Securities and Exchange Board of India (Registration number INA000001357) and provides investment advice and research. are acting or will be deemed to be acting as an investment advisor to any recipients of this information unless expressly agreed to by Morningstar Investment Management Asia Limited. Morningstar Investment Adviser India Private Limited has not been the subject of any disciplinary action by SEBI or any other legal/regulatory body. Morningstar India Private Limited. please note Investment Adviser Singapore Pte Limited. nor its representatives. Morningstar Investment Adviser India Private Limited has one associate. director or employee of the fund company within the last 12 months. damages or other losses resulting from. ß analyses or opinions or their use.com/equitydisclosures. which is regulated by Financial Services Agency. For enquiries regarding this research. For Recipients in India: This Investment Research is issued by Morningstar Investment Adviser India Private Limited. and are subject to change without notice.000 financial situation or particular needs. nor has it or its associates engaged in market making activity for the fund company. the information. Investors should consider the advice in light of these matters and. licenses to Japan. *The Conflicts of Interest disclosure above also applies to relatives and associates of Manager Research Analysts in India # The Conflicts of Interest disclosure above also applies to associates of Manager Research Analysts in India. In India. . which is regulated by the Hong Kong Securities and Futures Commission to provide services to professional investors only. Unless otherwise provided in a separate agreement.. financial situation or needs. or related to.morningstar. data. Also.Quantitative Equity Report | Release: 23 Jul 2018. research and consulting services.com. Refer to our Financial Services Guide (FSG) for more information at http://www. Inc. Please see important disclosures at the end of this report. All Rights Reserved. Morningstar Australasia Pty Ltd is the provider of the general advice (‘the Service’) and takes responsibility for the production of this report. data services.com/equitydisclosures. The terms and conditions on which Morningstar Investment Adviser India © Morningstar 2018.pdf For Recipients in Canada: This research is not prepared subject to Canadian disclosure requirements For Recipients in Hong Kong: The Report is distributed by Morningstar Investment Management Asia Limited. The Service is provided through the research of investment products. Inc. ASFL: 240892). Neither Morningstar Investment Management Asia Limited. financial data analysis and software development. Professional Conduct.. nor its representatives. before making any investment decisions. companies in 86 countries that trade on 64 exchanges. event Associates Japan. analyses and ® opinions presented herein do not constitute investment advice. Morningstar’s quantitative ratings are available for more than 28. Neither Ibbotson republish our ratings and research in their promotional material. are provided solely for informational purposes and therefore is not an offer to buy or sell a security. complete or accurate.