bullish

Vipshop: Net Cash at 40% of Market Cap, Now Paying Dividends and Buying Back Shares

Wium has highlighted this Insight as a Top Pick
238 Views15 May 2024 19:40
SUMMARY
  • The slowdown in Chinese retail sales of apparel seems to have been factored into Vipshop Holdings (VIPS US) 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.
  • With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.
  • Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.
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Wium Malan, CFA
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Information Technology & Communication ServicesEquity Bottom-UpThematic (Sector/Industry)
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