JD(HK:09618) Di Yi Cai Jing Zi Xun·2025-08-15 07:52Core Viewpoint - JD Group reported a significant decline in net profit for Q2 2025, primarily due to losses from its new food delivery business, despite overall revenue growth [1][2]. Financial Performance - JD's Q2 2025 operating loss was 859 million RMB, a stark contrast to an operating profit of 10.5 billion RMB in Q2 2024 [2][4]. - The net profit attributable to shareholders for Q2 2025 was 6.178 billion RMB, down 50.8% year-on-year [1][4]. - Total revenue for Q2 2025 reached 356.66 billion RMB, reflecting a year-on-year growth of 22.4% [2][3]. - Operating costs increased by 22.2% to 300 billion RMB, with marketing expenses surging by nearly 129% to 27.013 billion RMB [2][3]. Business Segments - The food delivery segment generated 13.852 billion RMB in revenue but reported a staggering operating profit margin of -106.7% [5]. - The company’s strategic investments in new businesses, including food delivery, have led to increased operational costs, impacting overall profitability [2][4]. Market Dynamics - Intense competition in the food delivery market has led to unsustainable pricing strategies, affecting the industry’s price structure and creating challenges for merchants [4][7]. - Analysts predict that losses in the food delivery segment may continue to expand in Q3 2025, further impacting JD's overall financial performance [6][7]. Cash Flow and Share Buyback - JD's free cash flow for Q2 2025 was 22.018 billion RMB, a significant decrease from 49.555 billion RMB in the same period last year [8][9]. - The company repurchased approximately 80.7 million Class A ordinary shares, totaling around 1.5 billion USD, with a remaining buyback amount of 3.5 billion USD as of August 14 [5]. Industry Outlook - Other tech companies, including Meituan and Alibaba, are expected to report similar challenges due to their early investments in the food delivery sector, although the impact may not be as severe as JD's [10][11]. - The competitive landscape is anticipated to remain challenging, with potential pressure on profit margins across the sector due to increased subsidies and promotional activities [11].