In today’s briefing:
- Vipshop: With Net Cash at Nearly 50% of Market Cap, Is It a Value Trap or a Takeover Target?
Vipshop: With Net Cash at Nearly 50% of Market Cap, Is It a Value Trap or a Takeover Target?
- Vipshop has underperformed, on a 12-month basis, due to a slowdown in active user growth, which has spilt over into slower revenue growth and contracting earnings.
- Material equity investments, accompanied by strategic cooperation agreements, by Tencent and JD.com in December 2017 catalysed significant user growth over the subsequent 3 years.
- The recent de-rating once again flags Vipshop as an attractive takeover target for its current strategic shareholders and broader eCommerce rivals, including nascent disruptors and live-streaming operators.
Related tickers: Vipshop Holdings (VIPS.N)
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