JD(HK:09618)2024-12-03 02:50Investment Rating - The report maintains an "Outperform" rating for JD com Inc with a target price of HKD 195 per share, implying a 28% upside [9][89] Core Views - JD com reported strong 3Q24 results with revenue of RMB 260 4 billion, up 5 1% YoY, and Non GAAP net profit of RMB 13 2 billion, up 23 9% YoY [2][4] - The company's gross profit margin improved to 17 3%, up 1 7 percentage points YoY, driven by supply chain optimization and operational efficiency [4][8] - JD com's 3P ecosystem showed significant improvement, with third party merchant users growing over 20% YoY and order volume increasing over 30% YoY [4][18] Financial Performance - 3Q24 revenue breakdown: Direct sales revenue was RMB 204 6 billion, with household appliances and 3C up 2 7% YoY, and fast moving consumer goods up 8 0% YoY [5][19] - Service revenue grew 6 5% YoY to RMB 55 8 billion, with platform and advertising revenue up 6 3% YoY and logistics and other services up 6 5% YoY [5][20] - The company's Non GAAP net profit margin improved to 5 1%, up 0 8 percentage points YoY [8] Share Repurchase - JD com repurchased 31 0 million Class A shares totaling USD 390 million between June 30 and September 30, 2024, representing 1 1% of outstanding shares [3][17] - A new share repurchase program was adopted in September 2024, allowing the company to repurchase up to USD 5 billion worth of shares over the next 36 months [3][17] Business Segments - JD Retail's operating profit margin remained stable at 5 2% YoY, while JD Logistics' operating profit margin improved significantly to 4 7%, up 4 0 percentage points YoY [8] - The company's core categories, including 3C and household appliances, showed improved YoY growth, while supermarket and apparel categories achieved double digit growth [4][18] Valuation and Forecast - The report estimates JD com's 2024 2026 Non GAAP net profit at RMB 45 1 billion, RMB 46 6 billion, and RMB 50 4 billion, respectively [9][20] - A sum of the parts valuation approach was used, assigning a 14x PE multiple to the retail business for 2025 and valuing subsidiaries based on their latest post investment valuations [9][20] - The target price of HKD 195 per share implies a 2025E market capitalization of HKD 620 1 billion [9]