 Good day fellow investors. Today we're going to discuss Alibaba and JD. I want to give an overview for long-term investors and what can they expect from such companies. Yesterday we discussed the e-commerce sector in China, so please watch that video before watching this one if you haven't, so that you can better understand what's going on in the sector and the strength of the sector that will impact the growth of these two companies. I will analyze what's going on with the companies, with their margins, with the profitability and their growth and then make two quick pack-of-an-acting calculations which I think are much better than any complicated methods because there are so many moving parts that the best way is just to look what's going on, what are the trends and what's the highest probability of happening in the long-term. This saves you a lot of time and gives you a pretty good indication of what will happen. Let's start with Alibaba. The last quarter financial highlights, revenue growth 61%, cloud growth 99%, extreme growth numbers, 549 million mobile users, extremely, extremely good. Now it is highly unlikely that Alibaba will continue to grow at 60%, but the market is growing at 20%. And with all the things that Alibaba is doing from Alipay, from this, from that, it is really possible that Alibaba is going to continue to grow at a very, very healthy growth rate. The revenue breakdown, we can see commerce retail growing 64%, the core business of the company, but also other businesses are growing very, very fastly. And what I like very much is the international commerce retail that has been growing at 115%, which means there is really strong potential in the international part of the Chinese retail businesses. Extremely important for the future, because you don't know what will the future be like in the next 20 years. And we are already buying now from Europe, from Alibaba without a problem. It is delivered relatively fast, so a lot of potential. Mobile users are really growing, still growing, so Chinese internet penetration is still low, so there is still a lot of potential there. What is very important is that the company is profitable, cash flow positive, because that allows for sustainable growth. As it was the case for Google, Facebook, that really built on healthy fundamentals, healthy business fundamentals, they continued to build, grow on. If the company isn't profitable, then there is too much equity dilution in the wrong investments, acquisitions. And I have seen a lot of companies struggle with profitability for a long time. Of course, not all the segments are positive. For example, the cloud computing segment has negative EBITDA margins, but okay, it's growing extremely fast, so perhaps in the future it will even add to profitability. What's significant about BABA? The growth was stellar at 63%, but the margin declined a bit from 62% to 57%. Should we worry? I don't know, but as the growth is there, as they are investing a lot in new businesses, so it could be probably just a reflection of investments. So what can happen to Alibaba? The current price earnings ratio is 52, trailing earnings per share are 3.52. If those grow at the conservative rate of 25% per year, it can be even higher, I get to an earnings per share of $10.7 over the next five years, which would imply a price earnings ratio of 18 if the price remains fixed in 2022. However, given BABA's scale, it is possible that earnings grow even faster, which would keep the valuation high, and the stock market returns would be in line with the growth. So with such a company, it's all about growth. If BABA continues to grow at 30%, 40%, 50%, 60%, 60% per year in the future, the stock price will also grow at the same rate, because the valuation will remain stable. If BABA falters somewhere, then the stock price could drop. But as the sector we have seen is very strong, there is so much opportunity, there is so much growth in China, it's highly unlikely that BABA will slow down on its growth path. So you can expect the stock to grow at the same rate as the revenue and the earnings are growing, so a real growth stock. Of course, there are always risks like a recession in China, global slowdown, whatever. However, I would prefer to be exposed to the risks that Alibaba carries with the huge growth, with development, with everything, than a US or European blue chip with slow growth, small dividend and terrible perspectives for the same risk in this case. So it's a very interesting situation. Find Alibaba a very, very good investment, even if the price has doubled in the last year. That doesn't matter to investors. Let's go to JD. JD is an upcoming player, also growing extremely fast in the last five years. But it's not yet profitable, which is the difference between these two companies. However, if you look at non-gap income, it is positive, this eliminates a lot of impairments, of intangible assets, but as the market is focusing on non-gap, then we have to focus too. It's easier to follow what the market is doing than to keep your own mind, especially in such a growth sector. The gross profits are growing at JDs, which is very positive. And the net profit margin, which is very positive, so we can expect further growth probably with the growth in revenues and the cost remaining hopefully a little bit fixed somewhere in the future. Thus, further improving the margins. I have made a table of what we can expect if JD's revenue grows at 20% and it hits a net profit margin of 3% where I expect it to stabilize in the future. Of course, I could be wrong. Nobody knows what will happen. But just to show an example of what can happen. The earnings per share in dollars would go to 3.5 in 2022 or 1.42 in 2018. If that is multiplied by the same price earnings ratio that Alibaba has, which is 50, we can expect a price of $70 per share in 2018. That can go to $140 in 2021. But if something happens to the growth and the valuation becomes 10, then the stock price would quickly drop to 45 or even lower. So here it's again all about the growth. As long as JD continues to grow at these staggering rates, so will the stock price probably. And JD has also like Alibaba a lot of new investments, a lot of potential growth projects. JD just announced collaborations with Tencent retail marketing solution, Baidu and all other social platforms, Italian high fashion brand Armani. So they're trying to leverage all those companies powerful big data sources in order to provide the best product to the customer online. Then they are investing in Thailand, 500 million, so they are really expanding internationally. 136 Walmart stores with their new data partnership, 160,000 merchants on its online marketplace. So the potential there is huge. Is it worth the risk? I think it is because you are exposed to huge growth at still a starting stage. Of course, you missed the last few years, but if you look it from an investor's perspective, you want to be exposed to those companies for your portfolio for the next 10, 20 years. If you just look back what the world looked like, e-commerce, 1997 and what it looks now, we can only imagine what the world will look like in 2027 and 2037. And all those companies, BABA and JD, offer the potential to be the next Amazons. And we can still expect from them to hit the 100 beggar return for your portfolio. So think about how much to allocate to those companies. If it's 1% and they in the next 20 years become 100 beggars, that's 100% of your portfolio. Those are huge returns. If there is a slowdown, then close down, run away from those stocks, because then people will start looking at valuations, slowing down risks, and then the stock price would drop sharply, sharply, sharply. However, we will be looking at what's going on and trying to see if there is a shift in the trend. For now, the trend everywhere in the e-commerce in China is very, very strong. I'm looking forward to your comments, click like if you liked the video, and I'll see you in the next one.