No. of Recommendations: 0
By Shareholders Unite,


The company produced excellent Q4 results that took the market by surprise.

But even after a substantial rally, the shares are still very reasonably priced.

The company has a substantial growth path ahead of it, and while it is already profitable, one uncertainty remains whether the margin expansion will continue this year.

The Chinese company Baozun (BZUN) had a very good run since we first wrote about it last December and we're still kicking ourselves for not including it in the SHU portfolio. We have remedied this Tuesday afternoon by picking up 200 shares at $44.32.

Since we wrote, the shares have nearly doubled their price in the process before giving quite a bit back in the market sell-off.

For instance, on March 22, the shares sold off 10% on what Seeking Alpha argued was the following worry:

Chinese internet–related stocks continue to feel pressure from Tencent’s (OTCPK:TCEHY -10%) plans to focus on investments rather than short-term margins and Naspers’ $10.6B sale of Tencent shares.

While we acknowledged the sell-off, we're not sure Tencent's investment policies have much, if anything to do with it. These should be considered company-specific events, in our view, even if Baozun's management argued at the Q4CC that the company will prioritize investing in technology over margin expansion in the coming year, but we knew that way before the Tencent news.

We think it's more likely that the shares were caught in the midst of the worries about a possible US-Chinese trade war, which heavily spooked the market that Thursday (as well as the following Friday).


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