The e-commerce company's shares popped following strong quarterly results and guidance and are up roughly 210% over the last year.
Baozun published fourth-quarter and full-year earnings on March 6 and delivered profits that were significantly better than the market's expectations. The average analyst estimate had called for earnings per share of $0.31, but actual earnings per share for the December-ended quarter came in at $0.42. Sales for the period missed the average analyst estimate by roughly $4.6 million but were still up roughly 23% year over year and not cause for concern in light of the earnings beat.
Baozun has been making steady progress in increasing its number of brand partners, and it should be able to continue adding customers as more businesses aim to ride momentum in Chinese e-commerce. The country's online-retail market is already the world's largest and still has a long runway for growth ahead, and Baozun is positioned to leverage its competitive advantages to benefit from industry tailwinds and continue increasing sales volume on its platform.
The company is also moving away from storing and shipping items from its own warehouses and toward simply connecting retail brands with customers through its sales platform. That's a move that should have a substantially beneficial impact on margins, and I think that Baozun stands out as a top idea for investing in the growth of Chinese e-commerce.