Investment Rating - The report maintains a "Buy" rating for JD [1][13][25] Core Insights - JD's retail growth remains strong, with effective synergies between e-commerce and food delivery, leading to a significant increase in active users and shopping frequency [7][9][11] - The company's revenue for Q2 FY25 reached RMB 356.7 billion, a year-on-year increase of 22.4%, exceeding expectations [8][10] - Non-GAAP net profit for Q2 FY25 was RMB 7.4 billion, down 48.9% year-on-year, but still surpassing forecasts [8][10] Financial Data and Profit Forecast - Revenue projections for JD are as follows: - 2023: RMB 1,084.66 billion - 2024: RMB 1,158.82 billion - 2025E: RMB 1,328.95 billion - 2026E: RMB 1,425.11 billion - 2027E: RMB 1,522.26 billion - Non-GAAP net profit estimates for the upcoming years are: - 2025E: RMB 26.96 billion - 2026E: RMB 47.73 billion - 2027E: RMB 60.53 billion [16][10][13] Operational Performance - JD's food delivery business has shown healthy growth, with daily orders exceeding 25 million across 1.5 million partner restaurants in 350 cities [11][12] - The company's operational efficiency improved, achieving a gross margin of 15.9% and a fulfillment gross margin of 9.7% in Q2 FY25 [10][12] - The retail operating margin for Q2 FY25 was 4.5%, while logistics operating margin decreased to 3.8% [10][12] Strategic Initiatives - JD has launched a RMB 10 billion subsidy program for food delivery, which has led to increased competition and short-term profitability pressure [10][12] - The company is focusing on quality food delivery and has introduced innovative models like the "Seven Fresh Kitchen" partnership, which quickly gained traction [12][13] Market Position - JD's core supply chain capabilities remain robust, supporting long-term growth in both retail and new business segments [13][10] - The report highlights the positive impact of national subsidy policies and an expanding active user base on the performance of power-consuming categories [13][9]

Revenue Performance - The company achieved operating revenue of 356.7 billion yuan in the quarter, representing a year-over-year increase of 22% [1] - JD Retail revenue was 310.1 billion yuan, up 21% year-over-year, with self-operated categories benefiting from national subsidies, increasing by 23% [1] - JD Logistics revenue reached 51.6 billion yuan, a year-over-year increase of 17%, significantly accelerated compared to Q1, driven by strong retail growth [1] New Business Development - New business revenue was 13.9 billion yuan, showing a year-over-year increase of 199%, but incurred an operating loss of 14.8 billion yuan primarily due to the impact of the takeaway business [2] - The peak daily order volume exceeded 25 million, leading to a notable increase in user traffic, with QAC and purchase frequency both up 40% year-over-year [2] - The company is enhancing system capabilities and deepening e-commerce synergies to drive more GMV conversion [2] Profitability Analysis - The company's non-GAAP net profit was 7.4 billion yuan, down 49% year-over-year, with a non-GAAP net profit margin of 2.1% [2] - Retail business operating profit margin (OPM) was 4.5%, up 0.6 percentage points year-over-year, driven by scale effects and improved supply chain efficiency [2] - New business OPM was -107%, reflecting increased investment in the takeaway segment, with expectations of further losses during the peak season [2] Future Outlook - The company slightly raised revenue forecasts for 2025-2027 to 1,335.4 billion, 1,420.2 billion, and 1,488.7 billion yuan, with adjustments of 2%, 1%, and 0% respectively [3] - Due to higher-than-expected losses in the new business segment, the forecast for annual operating losses was adjusted from 16.4 billion to 42.7 billion yuan [3] - Adjusted net profit forecasts for 2025-2027 were lowered to 29.2 billion, 40.2 billion, and 56 billion yuan, with adjustments of -35%, -23%, and -2% respectively [3]