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<Research>UBS Highlights Accelerated Rev. Growth at JD-SW (09618.HK) (JD.US); Valuation UndemandingUBS noted in a report that JD-SW (09618.HK) (JD.US) 's general merchandise revenues will be a growth driver this year from a normal base, especially in the
supermarket category, benefiting from the company's business optimisation.
Revenue from
electronics and home appliances will face a relatively high base of comparison.
The broker noted that while revenue growth may be affected by the macro outlook, incremental policy support such as the
real estate and home appliance trade-in programs may accelerate growth.
The broker also noted that JD management remained focused on profitable growth, relying on efficiency advantages rather than subsidies.
In terms of gross margin, management expected sustainable momentum going forward from enhanced sourcing efficiencies and a favourable product mix in general merchandise, offset by lower realisations from third-party merchants.
For operating expenses, there should be a manageable increase in the selling and marketing expense ratio.
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Overall, the broker believed JD could deliver stable earnings this year and expected the improvement in profitability to come later in the year, based on cost base from 2H23, increased contribution from third-party merchants and effect of scale.
UBS considered JD's valuation to be undemanding and rated it Buy, with a target price of US$40 for US-listed ADRs and HK$156 for Hong Kong-listed shares.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
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