JD(US:JD) Goldman Sachs·2025-05-19 09:58Investment Rating - The report maintains a "Buy" rating for JD.com Inc. with target prices of US$50 and HK$194, indicating a potential upside of 39.9% and 43.3% respectively [2][28]. Core Insights - JD.com is viewed as an under-appreciated differentiated business in the Chinese internet sector, benefiting from domestic consumption policies and category expansion, which are expected to drive valuation multiple expansion [2]. - The company reported its fastest quarterly active customer growth since 2021, achieving a 20% year-over-year increase in 1Q25, with strong double-digit growth across all categories [1]. - JD's food delivery service is seen as a synergistic extension of its retail business, with daily order volumes nearing 20 million, contributing to increased user engagement and retention [1][11]. - The company is committed to shareholder returns, having executed a cumulative US$1.5 billion in share repurchases year-to-date 2025, with an additional US$3.5 billion available under its three-year repurchase program [1][10]. Summary by Sections JD Retail Growth - JD Retail experienced a 20% year-over-year growth in active customers in 1Q25, with expectations for double-digit top line and profit growth throughout the year [1]. - The company anticipates a healthy trend during the 618 shopping festival while maintaining disciplined spending [1]. Food Delivery Business - JD views its food delivery service as integral to its retail strategy, enhancing user frequency and attracting new customers [1]. - The company aims to differentiate its food delivery service through quality offerings, rider benefits, and lower merchant charges, leveraging its logistics expertise [1][11]. Shareholder Returns - JD.com has executed a cumulative US$1.5 billion in share repurchases in 2025, with a remaining US$3.5 billion available until August 2027 [1][10].