Financial Performance Summary - In the first half of the year, the company achieved revenue of 2.29 billion RMB, a year-on-year increase of 23.1% [1][2] - The profit for the period was 234 million RMB, reflecting a growth of 34.1% [1][2] - Adjusted net profit reached 251 million RMB, marking a 40.4% increase [1][2] - Basic earnings per share were 0.42 RMB, up from 0.33 RMB in the previous year [2] Expansion Strategy - The company has been rapidly expanding its store count, reaching 502 locations by mid-year, with plans to increase to 465 by the end of 2024 [2][3] - New store openings are projected at 150 for 2025, with further expansions planned for 2026 and 2027 [3] - 68% of the planned new stores from 2025 to 2027 will be located in lower-tier cities [3] Business Segments - Revenue from restaurant operations was 1.76 billion RMB, while the takeaway business generated 524 million RMB, showing a significant increase of 74.2% [4][3] - The takeaway segment's contribution to overall revenue rose to 22.9% [3][4] - The company has focused on enhancing its takeaway services through digital operations and tailored meal options [5] Market Dynamics - The takeaway business has seen a rise in expenses, totaling 87.5 million RMB, which is a 75.9% increase [5] - The growth in takeaway revenue is attributed to the competitive landscape of the food delivery market, which has seen significant investment [5][6] - Despite strong revenue growth, there are concerns regarding the sustainability of this growth due to potential price reductions impacting overall sales [6] Consumer Insights - The average consumer spending was reported at 55.5 RMB, with slight variations across different regions [7] - The company has experienced a minor increase in table turnover rates, which may be influenced by the rise in takeaway orders [6][7] Stock Market Reaction - Following the release of the financial report, the company's stock price increased by over 8%, reaching a one-month high [7] - The stock price was reported at 7.99 HKD per share, reflecting a decline of 3.39% at the time of reporting [7]

Core Viewpoint - The impact of the new food delivery business on JD's performance is significant, leading to increased marketing expenses and a reduction in free cash flow, indicating a challenging competitive environment in the market [1][2]. Financial Performance - JD's marketing expenses in Q2 increased by 127.6% year-on-year, with a net increase of 15.1 billion yuan, raising the marketing expense ratio from 4.1% to 7.6% [1][2]. - The overall increase in "three expenses" (marketing, R&D, and administrative) was 95% year-on-year, resulting in an operating loss of 860 million yuan in Q2, compared to an operating profit of 10.5 billion yuan in the same period last year [2][5]. - Free cash flow in Q2 dropped by 56% year-on-year to 22 billion yuan, indicating a significant cash outflow due to increased spending on marketing and new business initiatives [6]. Market Strategy - JD's entry into the food delivery market aims to leverage high-frequency daily transactions to boost its core e-commerce business, with management expressing confidence in achieving expected synergies [3][5]. - The company plans to maintain a stable subsidy strategy in the food delivery market, avoiding excessive competition and focusing on long-term strategic goals [6][7]. Industry Context - The competitive landscape is intensifying, with Amazon expanding its same-day delivery service, putting pressure on JD and other retailers [1][7]. - The overall retail market growth is slowing, with the National Bureau of Statistics reporting a 6% year-on-year increase in wholesale and retail revenue in Q2, indicating a challenging environment for growth [8].

Group 1 - JD's full-time delivery rider count has exceeded 100,000, reaching this milestone nearly two months ahead of schedule [1] - JD plans to further increase recruitment efforts, aiming to expand the number of full-time riders to 150,000 [1] - The daily order volume for JD's delivery service has surpassed 25 million, with over 1.5 million quality dining establishments onboard [1] Group 2 - In early February, JD officially announced the launch of its delivery service, subsequently intensifying recruitment for riders [1] - On April 27, JD declared an additional recruitment push for full-time riders, planning to hire 100,000 more in the next three months [1] - All riders will receive full social insurance and housing fund contributions, with all costs covered by the company [1]