According to a report by CMB International, JD.com (JD, Financial) achieved a 13% year-over-year revenue growth in the fourth quarter of last year, surpassing expectations by 4%. The non-GAAP net profit increased by 34% year-over-year, exceeding the anticipated 22%, attributed to favorable policies and ongoing efficiency improvements. The company is expected to maintain double-digit revenue growth in the first half of this year, with a strong fourth quarter anticipated. Revenue and non-GAAP net profit for this year are projected to grow by 9.2% and 8.7% year-over-year, respectively.
By category, management noted a rebound in demand for home appliances, smartphones, and personal computers since the first quarter, alongside robust growth in supermarket demand. The retail profit margin for JD.com is expected to remain stable due to ongoing optimizations in procurement and fulfillment costs, alongside an increasing proportion of high-margin categories and third-party revenue. However, these benefits are partially offset by increased investments in merchants, users, and the new project JD Instant Delivery.
CMB International maintains an "outperform" rating on JD.com, viewing it as a major beneficiary of policy stimulus with promising long-term profitability prospects. The shareholder return rate of 7% is considered attractive, and the target price has been raised to $54.
