YB new stock pitches (Thu, Nov 13)

JD.com, a Chinese e-commerce giant with a market cap of $45.08 billion trading at $31.79 per share, operates through two main revenue streams: net product revenues from direct online retail and net service revenues from third-party marketplace fees, marketing services, and logistics solutions. The company's competitive advantage lies in its proprietary nationwide fulfillment infrastructure, organized across JD Retail (selling to 45,000+ suppliers), JD Logistics (a standalone public company offering supply chain services), Dada (on-demand delivery), and New Businesses (JD Property, JD Health, overseas expansion). After finishing FY2024 with 6.8% revenue growth to RMB 1,158.8 billion and 35.8% increase in non-GAAP net income to RMB 47.8 billion, Q2 2025 saw revenue growth surge 22.4% year-over-year but core profitability nearly halved from RMB 14.5 billion to RMB 7.4 billion due to aggressive spending on food delivery and competitive pricing strategies. Trading at a 9.6x P/E ratio, JD faces intense competition from Alibaba (44% market share) and Pinduoduo (19% market share), along with risks from its VIE structure, Chinese regulatory uncertainty, and U.S.-China trade tensions. Bull case scenarios suggest 50-100% upside potential if JD Logistics and new ventures perform well, while the company's substantial net cash position and tangible assets provide downside protection, with management signaling commitment through a $5 billion share repurchase program and annual dividend initiation.

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Calumet, Inc. (CLMT) reported strong Q3 earnings driven by its SPS segment achieving record production and $80.2 million in Adjusted EBITDA (+58% YoY), while the company delivered $61 million in year-to-date operating cost savings and EBITDA is currently annualizing $300 million despite no contribution from MRL. The MRL segment continues to suffer from a weak renewable diesel operating environment but secured commitments for approximately 100 million gallons of future SAF production ahead of its Q2 2026 launch, with recent SRE rulings and proposed RVO for 2026 representing an important inflection point for the RD market requiring an index margin of $1.50+ to incentivize restart of idled RD facilities. The base case assumes a $1.25 RD Index Margin, $1.50 SAF premium, and 210 million gallons of MRL production (150mm SAF, 25mm RD, 14mm RN), implying $250+ million EBITDA for CLMT's 87% MRL stake and total EBITDA of $535 million at 8x multiple, pushing the stock to a $30 target representing a 56% return. The author added January 2027 $20 strike calls at $5.50 per contract for an 80%+ return potential if the stock re-rates to $30+, with the EPA expected to finalize higher proposed RVO to help the RD industry serving as a key de-risking event for MRL in the next 6-12 months.

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Ringmetall SE (HP3A.DE) is a German industrial packaging specialist with a 70% global market share in drum clamping rings and significant presence in industrial packaging liners, having grown through 20+ strategic acquisitions since 1997 with a 21-year revenue CAGR of 7.5% and EBITDA CAGR of 9% while maintaining resilient 9% EBITDA margins. The company benefits from a strong competitive moat through high switching costs due to UN certification requirements, raw material cost pass-through protection (steel represents 50-60% of costs), global logistics capabilities enabling just-in-time delivery, and consolidation of a fragmented market where competitors are typically small regional players. Management holds nearly 60% insider ownership with CEO Christoph Petri recently purchasing additional shares at €3.09-€3.65, demonstrating strong alignment with shareholders, while the company serves major clients including Heineken, Bayer, Pfizer, ExxonMobil, and BASF across 25 independently operating subsidiaries globally. Key risks include geopolitical conflicts affecting Turkish operations, potential global recession, raw material supply disruptions, FX exposure to USD and Turkish lira, and environmental regulation changes, while the company showed resilience during COVID-19 with EBITDA margins expanding from 8.3% to 10.4% despite a 2.2% revenue decline. Recent performance includes revenue declining 15% in 2023 to €181.6 million and 3.7% in 2024 to €174.9 million due to weak demand and falling steel prices, though EBITDA margins recovered to 13.6% in 2024 supported by strategic acquisitions, with net debt rising from €23.3 million to €50.5 million to fund expansion including Peak Packaging acquisition (€26.8 million) and FIB Beer Systems (€1.34 million). Using a DCF model with 8% EBIT margin, 0.5% terminal growth rate, and 9.26% WACC, the company has a fair value of €8.76 per share, while multiples-based valuation using 11x EV/EBITDA and 14.2x P/E yields €7.60-€7.70 per share, resulting in a blended valuation of €8.20 per share (with 10% conservatism discount) implying 173-180% upside potential from current levels around €3.50.

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