Overview and forecast for Baozun
Information and main figures can be viewed here and here. There are 18 stocks in my portfolio, a share of ~9%.
Baozun has impressive revenue growth rates: at the end of 2019, the company grew by +35% year-on-year, in 2018 - by +30%, in 2017 - by +22%. The growth of net profit on average is also decent; in 2019 there was a slight decline - only +4% compared to 2018.
Forecast for the future 3-5 years: revenue +20% annually on average, net profit +35% annually. At the time of writing, the share price is $27.5, which is 58% below the high of $66.33 from June 2018. P/E = 42 (a bit high relative to the market, but if you look at the dynamics of the company’s indicator throughout history, now it is lower than in previous years), PEG ~ 1.2.
It’s funny that this company is not particularly popular, for example, on the social network “Pulse” Tinkoff Investments latest messages - 18.03, 24.02, 10.02 - 3 messages per 1.5 months! How much flood is there in the Tesla thread? 😂
Perhaps this is due to the company’s low capitalization (currently $1.744 billion), low popularity among analysts and the “stupid” name (by the way, all 3 points, especially the last 2, are the advantages of the company for a private investor, according to P. Lynch, whose book was previously recommended). The only negative in my opinion is the high debt load, let's hope that it will not grow over time.
In summary, I consider Baozun one of the most attractive Chinese for long-term investments. Traditionally, a conservative forecast for the end of 2022: share price - $61, +120% for 3 years, +30% per annum in dollars. If positive dynamics are maintained, I will continue to hold the company long-term with a share of 8-10% of the portfolio.
Attached graphic:
1️⃣ Share price dynamics
2️⃣ Revenue and profit dynamics 2017-2019, 2020-2022 - forecast values
3️⃣ Earnings per share dynamics 2018-2019, 2020-2022 - forecast values
Analysis
March 26, 2020