JD.com Shares Are A Better Investment Than Alibaba's

BEIJING, China — Shares of China's No.2 e-commerce firm JD.com are a better deal for investors than Alibaba Group's stock and could rise 30 percent or more over the next year, Barron's said on Sunday.

JD.com's shares have underperformed Alibaba's since the beginning of August due to misplaced concerns, and JD.com stands to be among the biggest beneficiaries of China's shopping holiday on Nov. 11, the Barron's report said.

A decline in gross profit margin when the JD.com reported quarterly results in mid-August spooked investors but was not as worrisome as it seemed, Barron's said.

The slip was due to aggressive promotions in June and a change in the way JD.com accounts for some third-party logistics costs, Barron's said.

Worries about increased competition from Alibaba were also overdone after it said in September that it would raise its stake in Cainiao Smart Logistics Network Ltd. JD.com has superior capabilities in middle and last-mile delivery, Barron's said, citing MKM Partners analyst Rob Sanderson.

JD.com's shares, which have gained 52 percent this year, have slipped 14 percent since the start of August, compared with a 15 percent gain for Alibaba shares over the same period.

Alibaba shares have doubled in price this year.

By Saqib Iqbal Ahmed; Editor: Cynthia Osterman