JD.com (JD), 9618 HK; 02 (Mar 23 - Dec 26)

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<Research>UBS Highlights Accelerated Rev. Growth at JD-SW (09618.HK) (JD.US); Valuation Undemanding

UBS 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.

Related NewsHSBC Research: JD Issue of CB May Hurt Recent Shr Price Sentiment; MEITUAN/ TENCENT/ NTES/ PDD Remain Preferences

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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<IPO>JD Property Halts HK IPO; JD Industrials at 'Supplementary Material' Stage of Filing Process - Report

A source at JD-SW (09618.HK) has been quoted as saying that due to the downturn in China's property sector, JD Property has suspended its plan to list in Hong Kong and will wait for the right time to restart the IPO.

The listing process for JD Industrials is still underway and will list in Hong Kong first if the timing is right.

In March last year, JD announced the spin-off of its two subsidiaries, JD Industrials and JD Property, for listing.

According to the public documents of the China Securities Regulatory Commission (CSRC), JD Property is no longer on the list of overseas listing filings, and the filing status of JD Industrials is still in the "Supplementary Material" stage.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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<Research>G Sachs Predicts JD-SW (09618.HK) 2Q24 Rev. Growth to Keep Slowing, Citing Higher Base in 2Q23

Goldman Sachs expected in a research report that JD-SW (09618.HK) revenue growth will continue to slow to about 5% YoY in 2Q24, compared to market consensus of growing 6%, as well as the 7% growth reported in 1Q24, given the higher base in 2Q23.

The broker maintained its 2024 forecasts of 6% YoY revenue growth and 7% YoY group net profit growth, with a return to YoY net profit growth in 2H24.

Even though Goldman adjusted its sub-sector preference for e-commerce due to soft online spending trends in June and flat short-term earnings from JD Retail, the broker identified more opportunities in the sector starting in 2H24, citing a lower base, an inflexion point in earnings from 2H, advertising technology potential and operational leverage across the sector, as well as the e-commerce sub-sector having the largest valuation discount to Chinese dotcom sector and global e-commerce peers.

The broker recently met with JD's management, in which they discussed the recent 6.18 trend and Mainland consumer preferences, competition among e-commerce companies, key drivers of the company's growth, profit forecasts to 2024, as well as shareholder return policy and the recent issuance of convertible bonds (CBs).

Management mentioned that the company's expectation of mid-to-high single-digit sales growth for the full year remained unchanged, forecasted JD Retail's full-year profit to be flat or growing, and noted confidence in its long-term gross merchandise volume (GMV) margin potential of 3%.

Goldman has a target price of HK$161 for JD's Hong Kong shares and US$41 for its US shares, with Buy ratings maintained for both.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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<Research>Jefferies Projects JD-SW (09618.HK) 2Q Rev. to Hike 1% YoY, Rating Buy

According to a research report published by Jefferies, the broker adjusted revenue forecast on JD-SW (09618.HK) for 2Q24, in view of the high base for air conditioning due to hot weather and reopening last year.

In addition, JD's solid execution in terms of return on investment also prompted the broker to raise its forecast for JD Retail’s operating profit and group-level profitability.

The broker expected JD Retail's revenue to grow by about 1% YoY (vs +5% YoY in previous estimate), and non-GAAP operating margin to also record a YoY increase.

At the group level, the broker projected JD’s non-GAAP net profit to gain by about 17% YoY.

Given the above, Jefferies maintained its target price of $41 for JD-SW and gave it a Buy rating.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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JD.com (9618 HK)
2Q24 Results Preview: Lacklustre Top-line Momentum; Upward Earnings Revision

JD’s top-line growth is guided to be subdued at 0-1% yoy for 2Q24, on a par with JD Retail’s growth and lower than our expectation.

JD guided strong earnings growth in 2Q24 on the back of its user-centric and ROI-focused strategy.

For 2024, JD anticipates mid-to-high single-digit top-line growth and stable growth in JD Retail’s profit, on the back of scaled-back subsidies amid intense competition.

Maintain BUY. Target price: HK$150.00 (US$40.00).

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

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<Research>JPM Adds JD-SW (09618.HK) TP to $130, Rating Neutral

JD-SW (09618.HK) has tumbled nearly 20% since its 1Q24 results were released in mid-May, underperforming all of its major listed e-commerce peers, JPMorgan released a research report saying.

This is believed to be mainly due to increased concerns about China's consumption market, resulting in valuation de-rating.

Related News: Citi Cuts JD.com, Inc. (JD.US) TP to US$42, Forecasts 2Q Non-GAAP NP to Be RMB9.5B

With its valuation back to about 8-9x of its 2024 forecasted PE ratio, JPMorgan expected JD-SW's share price to have more limited further downside room, according to the report.

However, at the same time, the Group's growth outlook still faced greater challenges.

JD-SW's e-commerce platform was more reliant on goods with higher average price, and its business model was quality-driven, rather than price-driven, which is expected to drag down the revenue growth pace, JPMorgan said.

JPMorgan reiterated rating at Neutral, and added its target price to $130 from $129.

Source: AAstocks.com

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
AAStocks Financial News

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not vested

Expect higher-than-expected adjusted net profit growth of 17% in 2Q24

Expect JD Retail’s revenue to grow by a modest 1% in 2Q24, on a high base of home appliance and electronics sales

Expect core net profit to grow 17% y/y in 2Q24, 14% higher than market expectations, driven by its effective subsidy strategy

Earnings forecasts unchanged with management maintaining FY24 guidance; expect non-GAAP earning to grow 1%/8%/7% for FY24/25/26F

Maintain BUY for its steady growth and undemanding valuations; TPs of HKD173/USD44

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=20154

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JD.com Inc GMV growth likely to pick up in 2H24F

We joined JD’s 2Q24F preview call today (22 Jul).

We now project both JD’s overall topline and JD Retail’s revenue to have grown 0.5% yoy in 2Q24F, slightly below our previous expectations.

However, given JD’s better expenses control in 2Q24F, we forecast non-GAAP net profit to grow 10.6% yoy, with non-GAAP NPM expansion of 0.3% pt yoy.

For FY24F, management maintains its guidance for JD’s revenue growth to outperform China social retail sales growth, and non-GAAP net profit to be stable yoy.

Reiterate Add with a lower DCF-based TP of HK$182.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 39AA854FC7

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vested

Shares of JD.com (NASDAQ: JD) are also down 75% off their previous peak.

Howard Marks added to its stake in JD.com in the first quarter. Oaktree also holds positions in several other China stocks, including Alibaba, so he clearly sees attractive value across China's internet sector.

Unlike Alibaba, JD.com holds inventory that it sells itself, so it doesn't have the high margins of its peer. However, the company's competitive advantage is found in its supply chain capabilities. For example, Walmart sells on JD.com's platform, which indicates a tremendously valuable asset the company brings to China's massive retail sector.

After a year of weak sales, JD is leveraging these strengths to its advantage. After getting more price competitive, it noted higher shopping frequency and increased order volume in the first quarter. Total revenue grew 7% year over year -- a significant improvement.

Most encouraging is that the greater price competitiveness didn't hurt margins. It still posted a 15% increase in net income over the year-ago quarter. Yet, the stock still trades at an incredibly low forward price-to-earnings ratio of 7.3. It's even cheaper on a price-to-free cash flow basis.

Source: Motley Fool

https://finance.yahoo.com/news/forget-n ... 00270.html

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<Research>BofA Securities Trims JD-SW (09618.HK) TP to $145; Direct Sales Dragged by Weak Home Appliances Sales

BofA Securities has released a research report estimating JD-SW (09618.HK) 's 2Q total revenue to grow by 1.1% YoY and 12% QoQ, aligning with the market's expectation, direct sales revenue to slip by 1% YoY mainly due to a 7.5% drop in electronic and home appliances sales, general merchandise sales revenue to leap by 11% YoY, and third-party sales platforms and other revenues to rise by 10% YoY.

BofA Securities expected that JD-SW's enhanced GPM and efficiency control measures would effectively reduce the pressure on profit growth, and that the group's non-GAAP net margin would elevate to 3.4% YoY, compared to 3.0% in 2Q23.

Non-GAAP net profit would hike by 16.4% YoY, 5% above the market's expectation.

BofA Securities predicted JD-SW's revenue to increase by 4% YoY in 3Q24 and 6.1% YoY in 4Q24.

In the light of a more cautious macro view, the broker reiterated a Buy rating on JD-SW but lowered the FY24-FY26 revenue forecasts by 2%-3% and the TP for its H-shares from $169 to $145.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN