Why Baozun Stock Gained 30.5% in March

The Chinese e-commerce platform is serving up impressive growth and still has room to run.

Keith Noonan
Keith Noonan
Apr 13, 2018 at 10:36AM
Technology and Telecom

What happened

Baozun (NASDAQ:BZUN) stock rose 30.5% in March, according to data provided by S&P Global Market Intelligence.

BZUN Chart

Data source: BZUN data by YCharts.

The e-commerce company's shares popped following strong quarterly results and guidance and are up roughly 210% over the last year.

An illustration of a shopping cart and a mobile phone.

Image source: Getty Images.

So what

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.

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Now what

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.