JD.com,
the e-commerce group weathering a storm of tighter Chinese regulation and slowing consumer demand, has gone shopping abroad in an attempt to diversify.
The Beijing-based marketplace—it sells everything from electronics and clothing to furniture and fresh food—said Monday it is considering an offer for
Currys,
an electronic goods retailer based in the U.K. that has 823 stores and employs around 28,000 workers.
Currys
jumped 37% in London after
JD.com
said in a statement that it was considering a cash offer for the entire issued share capital of the company. It comes just after Curry rejected an offer from Elliott Advisors, a division of Florida-based Elliott Investment Management, for £700 million ($881 million).
Expanding into new markets to mitigate domestic headwinds is a logical move for
JD.com,
which is behind rivals
Alibaba
and Temu owner
PDD Holdings
in building up revenues beyond the world’s second-largest economy.
But the U.K. is a questionable choice because, like China, it’s also suffering from weak consumption and a cost of living crisis. Britain plunged into recession in the second half of 2023.
However, what probably piqued interest from JD.com is that U.K equities are trading at a deep discount. The
S&P 500
currently trades for 21 times expected earnings in 2024, versus 20 times for the
Nikkei,
13 for the
Stoxx 600,
and 11 for the
FTSE 100.
Trading at these valuations mean some U.K. stocks appear to be bargains.
Write to Rupert Steiner at [email protected]
Read the full article here
