Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 29 Oct, 24 | VIPS | Speculative Buy | USD 14.57 | USD 15.9 | USD 17.6 | 71 days | 20.8% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Vipshop Holdings Limited operates online platforms in the People's Republic of China. It operates in Vip.com, Shan Shan Outlets, and Others segments. The company offers womenswear, menswear, sportswear and sporting goods, shoes and bags, accessories, baby and children products, skincare and cosmetics, home goods and other lifestyle products, and supermarket products. It also provides internet finance services, including consumer and supplier financing. In addition, the company engages in warehousing, retail business, product procurement, and software development and information technology support activities. The company provides branded products through its vip.com and vipshop.com online platforms, as well as through retail stores. Vipshop Holdings Limited was founded in 2008 and is headquartered in Guangzhou, the People's Republic of China.
Improved Profitability: Net Margin of 8.5% in Q1 FY24 vs 6.7% in Q1 FY23
Lower Credit Risk Exposure: Debt-Equity of 0.07x in Q1 FY24 vs Industry Median of 0.27x
Lower Liquidity: Current Ratio of 1.25x in Q1 FY24 vs Industry Median of 1.28x
Operating Inefficiency: Asset Turnover of 0.39x in Q1 FY24 vs 0.44x in Q1 FY23
Dependence on Flash Sales Model, Brand Recognition and Loyalty, Inventory Management Challenges, User Experience and Technology, Customer Acquisition Costs, etc
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 14.57 | 12.9 | 15.9 | 17.6 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Technical Observation (on the daily chart):
VIPS's stock price experienced a notable rise, followed by a pullback to its breakout zone as shown by the trendline. This pattern indicates a strong base for potential upward momentum in the near future. Additionally, the 14-day Relative Strength Index (RSI) is beginning to reverse from lower levels, suggesting a possible bullish pullback on the horizon. Moreover, VIPS is currently trading above its 50-day Simple Moving Average (SMA), which reinforces the bullish sentiment. These moving averages are essential indicators of short-term and mid-term market trends and being positioned above these levels typically reflects positive market sentiment.
As per the above-mentioned technical indicators analysis, a ‘Speculative Buy’ rating has been given to Vipshop Holdings Ltd (NYSE: VIPS) at the closing market price of USD 14.57 as of 28 October 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Internet Retail
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| VIPS Vipshop Holdings Limited |
-0.31 1.98% | 15.37 | 6.50 | 6.40 | 0.06 | 1.35 | 0.30 | 3.13 |
| AMZN Amazon.com Inc |
2.92 1.53% | 193.18 | 50.46 | 44.05 | 3.37 | 9.59 | 3.45 | 22.21 |
| BABAF Alibaba Group Holding Ltd |
- -% | 16.58 | 19.26 | 8.76 | 1.58 | 1.54 | 1.36 | 8.84 |
| PDD PDD Holdings Inc. |
3.74 3.16% | 122.09 | 20.54 | 13.26 | 0.62 | 5.93 | 0.50 | 1.74 |
| BABA Alibaba Group Holding Ltd |
0.40 0.30% | 132.63 | 10.59 | 7.29 | 0.21 | 1.28 | 0.14 | 0.91 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 28, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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