Two letters, one giant market. JD stands for Jingdong, "eastern capital", and for China's e-commerce powerhouse. The largest logistics network in the country, same-day delivery across a vast nation, and a valuation that makes the stock an attractive investment for me.

The range at China's largest online shop leaves little to be desired: electronics, home appliances, groceries, clothing, cosmetics, furniture, and pharmaceuticals. This is complemented by physical formats such as the 7FRESH fresh food markets and JD MALL, linking online and offline retail. At first glance, this looks like a typical retailer. That reading is too narrow. What sets JD apart is its own nationwide logistics network of over 1,600 warehouses, made so efficient through AI, big data, and cloud computing that deliveries often arrive the same or next day. Alongside direct sales, JD.com operates a marketplace for third-party sellers and rents out its logistics infrastructure to external companies. No wonder JD is often called "China's Amazon."

With its infrastructure and AI expertise, JD has positioned itself as a service provider for industry as a whole. The keyword is "Retail as a Service." Primarily focused on the Chinese market so far, the company is also expanding internationally. JD Logistics already operates over 130 warehouses in 23 countries. The biggest international move came at the end of 2025, when JD acquired a majority stake in Germany's CECONOMY AG, the parent company of electronics retailers MediaMarkt and Saturn. Closing is expected in the first half of 2026. At first glance, the deal surprised me. At second glance, the strategy is clear. The goal is to export JD's omni-channel retail expertise to Europe, where it had previously only operated through its online retail arm Joybuy. CECONOMY brings over 1,000 stores in 11 countries as the necessary physical infrastructure. That sounds like a good plan to me, even if the competition is fierce. Amazon says hello. How the European experiment plays out remains to be seen.

Overall, I like the business model. In its core market of China, it shines through its unique logistics network, proven technology expertise, and strong subsidiaries. The partnership with Tencent also secures permanent access to hundreds of millions of WeChat users.

Beyond the operational challenges, I see the following key risks. Because JD is registered abroad, it does not hold its Chinese subsidiaries directly, but only through contracts, the so-called VIE structure. JD is not alone: Alibaba, Baidu, and Pinduoduo use the same structure. It has existed for over two decades, and Beijing has tolerated it so far, even officially registering it for the first time in 2023. Government intervention has therefore become less likely.

The structural risk remains, however. If the rules change, foreign shareholders could lose their claims overnight. Massive losses would follow. The US-China trade conflict also keeps the threat of a forced NASDAQ delisting hanging over the stock. And ultimately: JD.com is a Chinese company. Political intervention, tighter regulation, or geopolitical disruption can hit the share price hard at any time.

For me, the fundamental China risk is more than priced in at current valuations. The price-to-cash-flow ratio sits at just above 9. Add a dividend yield of 3.1%. An attractive combination, in my view. The strong balance sheet, with low debt and a high cash position, adds to my conviction. I have taken an initial position.

Is JD.com a buy? I consider JD.com a buy at current prices and have taken an initial position. The stock trades at a price-to-cash-flow ratio of just above 9, translating into a return potential of over 10%, with a dividend yield of 3.1% and a strong balance sheet. The main risk is China: VIE structure, potential NASDAQ delisting, and geopolitical exposure. I consider this risk real, but more than priced in at current levels.

Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. I am not a financial advisor. Always do your own research before making any investment decision.

Disclosure: I may hold direct or indirect positions (including options) in any securities mentioned in this newsletter. My opinions are my own and always honest.