Core Viewpoint - JD.com, Inc. is facing significant operational challenges despite strong revenue growth, leading to a cautious investment outlook due to collapsing margins and cash flow issues [5][4]. Financial Performance - JD.com reported Q3 2025 revenue of RMB 299.1 billion, reflecting a year-on-year increase of approximately 15%, indicating growth in retail and logistics segments [2]. - Non-GAAP operating income fell dramatically from RMB 13.1 billion to RMB 0.2 billion, with profit margins shrinking from 5.0% to 0.1% [3]. - Free cash flow decreased sharply to RMB 12.6 billion from previous levels of RMB 30–40 billion, highlighting difficulties in converting revenue growth into sustainable earnings [3]. Operational Challenges - JD Retail improved revenue and operating income, while JD Logistics experienced higher revenue but a decline in operating income [3]. - New Businesses, including quick commerce and instant delivery, reported widened operating losses of RMB 15.7 billion, contributing to overall profitability pressure [3][4]. - Working capital pressures, such as increased inventory and receivable days, further strain the low-margin retail model [4]. Market Sentiment - The combination of strong top-line growth with collapsing margins and cash flow challenges suggests a cautious investment stance, as the market remains skeptical about JD's ability to achieve consistent profitability [5]. - The stock price has depreciated approximately 26.79% since a previous bullish thesis, indicating that the optimistic outlook did not materialize [6].

Core Insights - Valeura Energy is identified as a deep-value investment opportunity, with a focus on understanding the company's value drivers and potential for growth [1]. Company Analysis - The analysis emphasizes the importance of compounding knowledge in investment decisions, suggesting that a thorough understanding of the company's fundamentals can lead to better investment outcomes [1]. - The company has been covered previously, indicating a sustained interest and belief in its potential [1]. Investment Perspective - The author expresses a long-term investment strategy, highlighting a personal commitment to investing in Valeura Energy and a belief in its future performance [2].