Not only is the profit of JD.com rather low, but it mainly comes from interest, government tax rebates and ‘other business’. That other business is not clearly described in the prospectus but industry insiders believe that a large portion comes from supply chain finance business.
This ruling was used by many to justify the large and fast drop in the last couple of weeks of Chinese Internet stocks. A more likely explanation is that these stocks have gone through such an enormous run that they were looking for a reason to sell off and they found it in the emerging markets turmoil.
Read more: Forbes.com