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Baozun Up 31%: The New Strategy Impresses

Mar. 07, 2018 11:34 AM ETBaozun Inc. (BZUN)68 Comments


  • Baozun released its Q4 and FY 2017 results pre-market on March 6th and the stock went through the roof: +31%.
  • The results showed that the strategy that the management has been rolling out has great effects.
  • There was probably a short squeeze too: the short interest had been rising and the previous earnings caused huge drops.
  • The future of Baozun looks great: it is the gatekeeper for a secular growth trend.


On March 6th, before the market opened, Baozun (NASDAQ:BZUN) released its earnings. Traditionally that has been a time of a big moves for the company's stock.

This is for example after the earnings release of Q2 2017:

ChartBZUN data by YCharts

And this is after Q3 2017

ChartBZUN data by YCharts

Maybe those big drops scare you, but I first introduced Baozun (BZUN) to my readers as a potential multi-bagger in May of 2017 in the article "Potential Multibaggers Pt.2: Baozun, the Chinese Shopify." Since then, the stock has gone up quite a bit, despite the big drops after Q2 and Q3 earnings:

ChartBZUN data by YCharts

Now after the earnings that were released, there was another giant move, albeit this time up:

ChartBZUN Price data by YCharts

A lot of investors will wonder if the ship has sailed or if there is still time to go in after such a rise: 150% over 10 months, more than 20% on a single day? In this article I will try to answer those questions, using the Q4 2017 and FY 2017 results. But first, for those who don't know the company yet: what is Baozun and what's its business?

Introduction to the company

(Source: baozun.com)

Baozun is a Chinese e-commerce service company that is involved in the whole process of e-commerce: software, online store development, store operations, digital marketing, customer services, warehousing and fulfillment (distribution). It operates on JD.com (JD) and even more on Tmall (BABA), but also on mobile social media malls, the official brand stores and even offline smart stores.

To put it simple, if a major Western brand wants to sell on the Chinese e-commerce market (and which brand wouldn't want that these days?), Baozun is the one-stop shop to do it. It can translate both language and concepts

ChartBZUN data by YCharts

This article was written by

From Growth to Value profile picture
Potential Multibagger helps you find multibaggers early on.

I am a 46-year old investor with a long-term perspective, so I mainly think about the future when I invest. In my Investing Group Potential Multibaggers, I try to uncover multibaggers early on. Picks include Shopify ($7.78), and The Trade Desk ($19.5). 

The strategy is simple but not easy: find disruptors that have a very high quality and hold them for a very long period. I try to identify stocks that have the potential to go up 1,000% and more over the next 10 years. I do deep research for the stocks that I pick to know if the quality is high indeed. 

I do not care about what my selection of stocks will do next year, but what the result will be over the long term. To paraphrase Warren Buffett: "You should only have stocks that you would feel comfortable having if the stock market closed up for 10 years."

I appreciate your comments because I believe I can learn a lot from your feedback and I believe in the wisdom of crowds.

Analyst’s Disclosure: I am/we are long BZUN, SHOP, BABA, SBUX, JD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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