Dada(US:DADA)2024-08-28 03:38Investment Rating - The investment rating for Dada Group (DADA US) is Neutral [2][7]. Core Insights - The company's revenue for Q2 2024 was 2.35 billion RMB, a year-on-year decrease of 9.5%, with Dada Express revenue increasing by 47% due to higher delivery volumes from chain brands. JD Instant Delivery revenue fell by 44% due to a decline in advertising revenue and reduced fulfillment service income [1][5]. - The adjusted net loss for Q2 2024 was 140 million RMB, with a loss rate of 6%, which was better than Bloomberg's market expectation of a 200 million RMB loss [1][5]. - The operational cost ratio increased to 74% from 58% year-on-year, primarily due to rising rider costs from increased local delivery volumes [1][5]. Summary by Sections Financial Performance - For Q2 2024, total revenue was 2.35 billion RMB, down 10% from the previous quarter and down 9.5% year-on-year. Dada Express revenue was 1.44 billion RMB, up 47% year-on-year, while JD Instant Delivery revenue was 912 million RMB, down 44% year-on-year [5][6]. - The adjusted net profit margin for 2024 is projected to be approximately -7.4%, with an expected total loss of 710 million RMB [4][6]. Operational Highlights - JD Instant Delivery saw a 100%+ year-on-year increase in average monthly users and order volume, with peak daily orders reaching new highs. The user penetration rate in JD's ecosystem continues to improve [2][5]. - Dada Express completed orders and gross revenue increased by 21% and 23% year-on-year, respectively, as the company deepens partnerships with key accounts in the restaurant sector [2][5]. Outlook and Valuation - The company is expected to continue facing challenges in revenue growth due to adjustments in JD Instant Delivery's business model. Revenue is projected to decline by approximately 10% in Q3 2024, with Dada Express revenue expected to grow by 40% year-on-year [2][4]. - The target price has been adjusted down to 1.50 USD from 1.70 USD, reflecting a 13.6% potential upside from the current price of 1.32 USD [2][7].