JD.com Inc. (JD) Conference Call Summary Company Overview - **Company**: JD.com Inc. (JD) - **Market Cap**: $45.9 billion - **Enterprise Value**: $25.4 billion - **Current Price**: $28.93 - **12-Month Price Target**: $43.00 (Upside: 48.6%) [7][30] Key Industry Insights 1. Electronics & Appliances Revenue Outlook - The company anticipates challenges in 4Q due to a high base effect from December 2024, where the industry growth rate for appliances was 39% year-over-year [1] - Government subsidies have been temporarily suspended, leading JD and brands to subsidize appliance prices to remain competitive [1] - Top-line pressure is expected to decrease marginally in 1Q with a more normalized base and potential resumption of national subsidies next year [1] 2. Food Delivery and Retail Integration - There is a healthy cross-sell from food delivery users to JD Retail, with 50% of food delivery users also purchasing B2C products [2] - User engagement has grown significantly, with quarterly active users and shopping frequency increasing by 40% year-over-year in 3Q [2] 3. Food Delivery Operational Strategy - The company expects food delivery losses to narrow sequentially in 4Q, focusing on improving unit economics and sustaining order volume [3] - Unit economics improvement relies on optimizing subsidy efficiency, with advertising systems showing progressive improvement [3] - The unit fulfillment cost is competitive when excluding social insurance for full-time riders [3] 4. Jingxi Business Investment - Incremental investment in the Jingxi business is expected to increase losses in 4Q due to marketing and fulfillment expenses [20] - Jingxi is a key driver for new user acquisition, particularly in lower-tier cities, with a healthy user retention rate [20] 5. Singles' Day Performance - Singles' Day now contributes a smaller share of 4Q GMV as the platform shifts towards daily price competitiveness and sustained year-round value [22] Financial Performance and Projections Revenue and Growth Estimates - **Total Revenue**: - 2024: Rmb 1,158,819 million - 2025E: Rmb 1,309,375 million - 2026E: Rmb 1,393,511 million - 2027E: Rmb 1,472,738 million [18] - **EBITDA**: - 2024: Rmb 51,473 million - 2025E: Rmb 14,929 million - 2026E: Rmb 31,883 million - 2027E: Rmb 57,187 million [18] - **EPS**: - 2024: Rmb 31.69 - 2025E: Rmb 17.67 - 2026E: Rmb 18.53 - 2027E: Rmb 32.38 [18] Margins and Returns - **Gross Margin**: Expected to stabilize around 16% in the coming years [29] - **Free Cash Flow Yield**: - 2024: 13.3% - 2025E: 14.2% - 2026E: 7.0% - 2027E: 10.1% [13] Risks and Challenges - Increased competition in China's eCommerce and food delivery markets could impact growth [31] - Potential slowdown in online GMV and tougher comparisons for electronics and appliances starting September 2025 [31] - Execution risks in general merchandise and JD supermarket operations [31] Conclusion - JD.com is positioned for growth with a focus on improving user experience and operational efficiency, particularly in food delivery and Jingxi business. The company aims to sustain its competitive edge through strategic investments and enhanced user engagement, despite facing challenges from market competition and economic conditions [21][31]

Investment Rating - The report maintains a "Buy" rating for Alibaba Group (BABA) with a 12-month price target of $159.00, indicating an upside potential of 18.6% from the current price of $134.05 [10][15]. Core Insights - Alibaba reported strong results with Customer Management Revenue (CMR) growth of 12% year-over-year (yoy) and EBITA growth of 8% yoy for the Taobao-Tmall Group, exceeding expectations. Cloud revenue grew by 18% yoy, and non-GAAP EPS increased by 23% yoy, aligning with forecasts [1][10]. - The report highlights the focus on AI capital expenditures and cloud strategies, particularly in light of recent AI model advancements and the implications for revenue growth and margin outlook for Alibaba Cloud [2]. - The report notes a slight decline in cloud EBITA margin to 8.0% quarter-over-quarter (qoq), attributed to reinvestments aimed at expanding scale leadership [1][2]. Summary by Sections Financial Performance - Total revenues for 4QFY25 were reported at Rmb 236,454 million, reflecting a 7% yoy increase. CMR reached Rmb 71,077 million, up 12% yoy, while cloud revenue was Rmb 30,127 million, growing 18% yoy [12][14]. - Non-GAAP EPS for 4QFY25 was Rmb 12.52, a 23% increase yoy, although it fell short of the Visible Alpha Consensus Data by 5% [12][14]. Segment Performance - Taobao-Tmall Group revenue grew to Rmb 101,369 million, a 9% yoy increase, with CMR growth contributing significantly [14]. - The Alibaba International Digital Commerce Group reported revenue of Rmb 33,579 million, up 22% yoy, with a narrowed EBITA loss of Rmb 3.6 billion compared to Rmb 5.0 billion in the previous quarter [13][14]. - The Local Services Group saw revenue growth of 10% yoy, reaching Rmb 16.1 billion, with a narrowed EBITA loss of Rmb 2.3 billion [13]. Future Outlook - The report anticipates continued growth for Taobao-Tmall, driven by a stabilizing eCommerce competitive landscape and the impact of the software service fee introduced last September [2][9]. - There is an expectation for narrowing losses in international eCommerce, with a trajectory towards quarterly breakeven over the next 3-4 quarters [9].

Investment Rating - The report maintains a "Buy" rating for PDD Holdings with a target price (TP) of US$152, unchanged despite recent developments [2][10][12]. Core Insights - The suspension of Temu's full-entrusted model for US shipments is more drastic than previously anticipated, leading to a significant reduction in US GMV estimates [2][19]. - The shift towards local merchants and warehouses is expected to accelerate, particularly in Europe, as Temu adapts to new tariff regulations [2][19]. - The current valuation of PDD at 10X 2025E P/E does not reflect the potential of Temu's global business, indicating a potential undervaluation [2][19]. Financial Projections - Revenue estimates for PDD have been revised downwards by 10% for 2025E, 21% for 2026E, and 22% for 2027E due to the reduction in Temu's GMV forecasts [19]. - The projected global GMV for Temu is now US$50 billion, US$53 billion, and US$70 billion for FY25E, FY26E, and FY27E respectively, compared to previous estimates of US$63 billion, US$84 billion, and US$106 billion [19]. - PDD's overall non-GAAP EBIT changes are minimal, with EPS adjustments ranging from -2% to 1% for 2025E-2027E [19]. Market Dynamics - Temu's online advertising expenditure in the US has been significantly reduced since April, which is expected to positively impact loss margins [2]. - The report notes a decline in Temu app downloads, which have fallen out of the top 50 rankings after consistently being in the top 10 for two years [2]. - The report highlights geopolitical uncertainties affecting investor focus, particularly regarding European de-minimis policies and potential ADR delisting risks [19].