Zhao Yin Guo Ji·2024-07-12 01:22Investment Rating - The report maintains a "Buy" rating for the company, with a target price of $51.90 based on DCF valuation [1][2][17]. Core Insights - Despite challenges in the air conditioning and PC categories affecting revenue growth in Q2 2024E, the company's focus on ROI and quality growth strategies is expected to drive earnings [1]. - The projected revenue for Q2 2024 is estimated at RMB 29.9 billion, reflecting a year-on-year growth of 1.0%, while non-GAAP net income is forecasted at RMB 9.9 billion, translating to a non-GAAP net profit margin of 3.4%, which is 16% higher than Bloomberg's expectations [1]. - The company is anticipated to see a re-acceleration in revenue growth in Q3 2024E, with JD Retail's GMV growth likely to exceed the total retail sales for 2024E [1]. Revenue and Profitability Forecasts - The company’s revenue for 2024E is projected at RMB 1150.6 billion, with a year-on-year growth of 6.1% [14]. - Non-GAAP net income for 2024E is expected to reach RMB 38.5 billion, with a non-GAAP net profit margin of 3.3% [17]. - The report indicates a compound annual growth rate (CAGR) for non-GAAP earnings of 11% from 2023 to 2026E [1]. Financial Metrics - The non-GAAP PE ratio for 2024E and 2025E is estimated at 8x and 7x, respectively, which is considered not excessive [1]. - The company’s gross profit margin is projected to improve from 15.1% in 2024E to 15.4% in 2026E [17]. - The adjusted net profit margin is expected to increase from 3.3% in 2024E to 3.8% in 2026E [17]. Key Catalysts - Potential catalysts for the company include further enhancement of shareholder returns and a recovery in consumer spending, which could improve revenue and profit growth prospects [1].