According to a recent report from CLSA, JD.com (JD, Financial) is expected to see a robust year-over-year revenue growth of 15.9% in the second quarter, reaching 338 billion RMB. This growth is largely attributed to the strong performance during the 618 Shopping Festival, with notable sales increases in electronics and daily goods, aided by trade-in subsidies and increased customer traffic.
However, despite the revenue growth, JD.com's adjusted EBIT might decline by 66% to 4 billion RMB compared to last year. While JD Retail's profits are predicted to grow by 16% to 12 billion RMB and JD Logistics' profit to remain stable at 2 billion RMB, emerging business losses are expected to surge to 10 billion RMB due to aggressive promotions.
CLSA also adjusted its net profit forecasts for JD.com for 2025 and 2026, lowering them by 41% and 21%, respectively. The target price for JD.com's U.S. shares was reduced from $45 to $41. Despite these challenges, JD.com maintains an "outperform" rating, supported by its low valuation with a forward adjusted P/E ratio of 8.8 and substantial net cash holdings.
