HTSC·2025-03-07 06:25Investment Rating - The report maintains a "Buy" rating for JD Group [7] Core Views - JD Group's revenue for 4Q24 increased by 13.4% year-on-year to RMB 347 billion, exceeding the expected growth of 9.0%. The non-GAAP net profit reached RMB 11.3 billion, a 34.2% increase, driven by better-than-expected operating profit in the retail segment [1][2] - The "trade-in" initiative is expected to support revenue growth in 2025, while exploration in new business areas like food delivery is crucial for long-term growth and valuation expansion [1][3] - The company has a low trading valuation multiple of 9.4x for 2025E non-GAAP PE, alongside significant shareholder returns planned for 2024, which includes a buyback of USD 3.6 billion and dividends of USD 1.5 billion [1][4] Revenue and Profitability - JD Retail's total revenue for 4Q24 was RMB 307.1 billion, up 14.7% year-on-year, with operating profit of RMB 10 billion, a 44.7% increase [2] - The number of active buyers has seen double-digit growth for five consecutive quarters, with 4Q24 growth reaching the highest in nearly five quarters [2] - The "trade-in" initiative contributed to a 15.8% increase in revenue from electronic products, while daily necessities grew by 11.1% [2] Business Exploration and Profit Impact - JD is actively exploring new business scenarios like food delivery to enhance user engagement and transaction scenarios, which may have a limited impact on profits in 2025 [3] - The adjusted net profit for JD Group in 2025 is expected to grow by 7.6% to RMB 51.5 billion, with a stable adjusted net profit margin [3] Profit Forecast and Valuation - The report adjusts the non-GAAP net profit forecast for 2025/2026 upwards by 0.7% and 4.9% to RMB 51.5 billion and RMB 58.3 billion, respectively, and introduces a 2027 forecast of RMB 64.9 billion [4][21] - The target price based on SOTP valuation is set at USD 51.88 per ADS and HKD 201.57 per ordinary share, reflecting a valuation multiple of 10.8x, 9.5x, and 8.6x for 2025/2026/2027E non-GAAP PE [4][23]