Amazon, an Exemplary Business Portfolio Responding to an Era of Uncertainty

[Asia Economy Reporter Eunmo Koo] Contactless consumption, cloud computing, digital healthcare, and new retail have been presented as Amazon's investment points.

Researcher Yongmin Cho of Shinhan Financial Investment stated in a report on the 15th, "Although uncertainty about the post-COVID-19 era is increasing, Amazon's business portfolio attractiveness will become more prominent," and predicted that "contactless consumption, cloud computing, and digital healthcare sectors will benefit."

As Amazon has built the largest e-commerce and cloud platforms, related benefits are expected to appear most significantly. Researcher Cho forecasted, "As consumers' shopping routes shift from offline to online and demand for digital content increases, both sectors are expected to experience substantial growth."

Expectations for new businesses such as new retail and digital healthcare are also valid. Researcher Cho said, "While global companies' investments are being delayed due to COVID-19, the pandemic will act as a catalyst for Amazon's new businesses," adding, "Both digital healthcare and unmanned stores (new retail) are expected to directly benefit from the increase in demand for contactless consumption."

Competitiveness is expected to continue even after the COVID-19 situation is resolved. The current stock price is trading at a 12-month forward price-to-earnings ratio (PER) of 65 times, which is at the lower end of the historical valuation band. Researcher Cho explained, "Considering the continued growth of core businesses and the cash holdings ($55.34 billion), accelerating growth through active mergers and acquisitions (M&A) is also possible," and added, "Although uncertainty about the post-COVID era is intensifying, the company has built a portfolio capable of responding to it."

Amazon is the world's largest e-commerce company, which started as an internet bookstore in 1995. Initially, it sold books online, expanded its product range to toys, electronics, and household goods from 1999, and transformed into an online general store in the 2000s. Currently, it is a retail giant accounting for 6% of total retail sales in the United States.

This content was produced with the assistance of AI translation services.