JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Investment Advisors

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Investment Advisors, JL Warren Capital

Junheng Li

Equity Bottom-Up

<p>We believe that PDD and its social e-commerce model poses material headwinds to the growth of other major ecommerce players, albeit to different degrees. <a href="https://www.smartkarma.com/entities/446" target="_blank" data-smartkarma-citation="entities:446:1">JD.com Inc (ADR) (JD US)</a> is likely to be the biggest victim, followed by Taobao and Tmall.  <a href="https://www.smartkarma.com/entities/1088" target="_blank" data-smartkarma-citation="entities:1088:1">Vipshop Holdings Ltd Adr (VIPS US)</a>, at this point, has been relatively unaffected due to its niche group of products and customer base who are relatively unfazed by social-buying.  JD’s collaboration with <a href="https://www.smartkarma.com/entities/179" target="_blank" data-smartkarma-citation="entities:179:1">Baidu Inc (ADR) (BIDU US)</a>, <a href="https://www.smartkarma.com/entities/26755" target="_blank" data-smartkarma-citation="entities:26755:1">iQIYI Inc (IQ US)</a>, 360, <a href="https://www.smartkarma.com/entities/1088" target="_blank" data-smartkarma-citation="entities:1088:1">Vipshop Holdings Ltd Adr (VIPS US)</a> is not enough to offset the negative impact by PDD. JD is to to report Q1 2018 earnings tomorrow before market open.  We expect weak GMV growth and margins. </p>

We believe that PDD and its social e-commerce model poses material headwinds to the growth of other major ecommerce players, albeit to different degrees. JD.com Inc (ADR) (JD US) is likely to be the biggest victim, followed by Taobao and Tmall.  Vipshop Holdings Ltd Adr (VIPS US), at this point, has been relatively unaffected due to its niche group of products and customer base who are relatively unfazed by social-buying.  JD’s collaboration with Baidu Inc (ADR) (BIDU US), iQIYI Inc (IQ US), 360, Vipshop Holdings Ltd Adr (VIPS US) is not enough to offset the negative impact by PDD. JD is to to report Q1 2018 earnings tomorrow before market open.  We expect weak GMV growth and margins. 

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