Stock (Symbol) |
Baozun (BZUN) |
Stock Price |
$21 |
Sector |
| Retail & Travel |
Data is as of |
| May 30, 2017 |
Expected to Report |
| Aug 1 |
Company Description |
 Baozun Inc. is a brand e-commerce solutions company engaged in providing end-to-end e-commerce solutions, including the sales of apparel, home and electronic products, online store design and setup, visual merchandising and marketing, online store operations, customer services, warehousing and order fulfillment. Its segments include the brand e-commerce segment, which provides brand-e-commerce solutions to its brand partners, including IT services, store operations, digital marketing, customer services, warehousing and fulfillment, and the Maikefeng segment that operates its retail online platform, Maikefeng. Source: Thomson Financial |
Sharek’s Take |
 Baozun (BZUN) is China’s version of Shopify, making it easy for brands to set up and market an online store in China. But is this stock on the same level as other Chinese Internet winners? Baozun is the leading brand e-commerce solution in China, with around 20-25% of the country’s market share. Brands partner with Baozun to develop websites, integrate with online sellers like JD.com, and provide digital marketing. Then Baozon handles logistics, customer service, and has warehouses and fulfillment centers an hour away from Shanghai. Brands that work with BZUN include Nike, Toyota, Microsoft, and Johnson & Johnson. Last qtr the number of brand partners increased from 98 to 125 year-over-year, with gross merchandise sales up 61%. Baozun was founded in 2007 and is backed by Alibaba. The company’s Estimated Long-Term Growth Rate is 65% per year — which is outstanding. Annual profits continue to surge, and estimates (e) look outstanding:
2015 $0.09 But BZUN only met earnings estimates last qtr, and 2017 profit estimates declined from $0.72 to $0.69. So no, this stock isn’t on the level of the Chinese Internet superstars because its (1) not beating the street and (2) not upping estimates. But profit growth was a solid 75% last qtr, and the stock has a P/E of just 31. So is BZUN a superstar in the making? I won’t place a lot of eggs in this basket yet as the fundamentals aren’t quite perfect. But I do feel growth investors should own a few shares as the potential is big and the Chinese Internet stocks are hot. |
One Year Chart |
 I’m concerned about this stock because it just went from $5 to $20 in a year. The stock market hasn’t had a correction in a long-time, and if it does correct there could be a decline in these shares as investors take profits. Qtrly profit Estimates are 400%, 25%, 122% and 43% which is great, but these estimates ticked down a bit this qtr. The P/E of 31 makes this growth stock very reasonable. |
Fair Value |
 I’m taking my Fair Value P/E down from 40 to 37 as profit estimates declined a bit this qtr. The stock’s close to its 2017 Fair Value now, but has huge upside when we look out to 2018. |
Bottom Line |
 Baozun is in the right spot with its e-commerce platform, and China’s regulations regarding the Internet make it so brands need assistance selling goods online in that country. Profits are growing rapidly, and the P/E is reasonable, but I worry a stock market correction could bring these shares lower, thus I wouldn’t make a big investment in this stock just yet. BZUN ranks 14th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings.. |
Power Rankings |
Growth Stock Portfolio
14 of 30Aggressive Growth Portfolio 14 of 15Conservative Stock Portfolio N/A |
