Burry Increases JD.com Stake, Signals Turn to Undervalued Hong Kong Equities
JD.com reports mixed Q1 fiscal 2026 results with RMB 315.7 billion in revenue, while Michael Burry argues Hong Kong stocks offer compelling value relative to global peers.
Investor Michael Burry has disclosed an increased position in Chinese e-commerce giant JD.com, describing the current environment as "a particularly good time" to invest in Hong Kong stocks. Burry suggests that market attention may gradually pivot away from the artificial intelligence-driven rallies that have dominated global markets this year, towards undervalued Hong Kong equities that have lagged behind their international counterparts.
The Hang Seng Index has struggled to keep pace with major global benchmarks, weighed down by sluggish consumer spending and a preference among investors for AI-focused winners over traditional Chinese equities. Burry’s strategy has historically centred on identifying opportunities overlooked by the broader market, and his latest move places JD.com, China’s second-largest e-commerce company, at the centre of this potential thematic shift.
JD.com operates a capital-intensive logistics and supply chain model comparable to Amazon, which the company argues provides a more reliable customer experience and stronger long-term economics. The stock has recently reclaimed the $30 level, representing a 24.1 per cent recovery from its early-March low of $24.51. This rebound has seen the shares surpass their 200-day moving average for the first time since May, while trading at a forward adjusted price-to-earnings ratio of 9.41 times and 0.20 times forward sales.
The company reported mixed results for the first quarter of fiscal 2026, generating revenue of RMB 315.7 billion, a 4.9 per cent year-on-year increase. Non-GAAP earnings per ADS were RMB 5.12, a decline from the prior-year period. However, CEO Sandy Xu stated that the company entered 2026 "on firm ground," citing sequential recovery in electronics and home appliances, double-digit growth in general merchandise, and accelerating marketplace revenue.
Wall Street analysts maintain a "Strong Buy" consensus on the stock, with an average price target of $40.12, implying 31.7 per cent upside potential. JD.com ended the quarter with RMB 216 billion in cash and equivalents, having repurchased $631 million in stock and paid a $1.4 billion annual dividend, which yields 3.31 per cent.
