Core Viewpoint - JD Industrial is a leading provider of industrial supply chain technology and services in China, focusing on MRO procurement services and end-to-end supply chain digitalization [1] Group 1: Company Overview - JD Industrial has established itself as the largest participant in the domestic MRO procurement market by 2024, serving 11,100 key enterprise clients and offering approximately 81.1 million SKUs across 80 product categories sourced from around 158,000 suppliers [1] - The company's revenue is primarily derived from industrial product (MRO) sales, with projected revenue of 20.398 billion yuan and adjusted net profit of 909 million yuan in 2024, reflecting a CAGR of 25.4% and 21.9% from 2021 to 2024 [1] - The management team is experienced, with CEO Song Chunzheng having previously incubated JD's enterprise business, driving the digitalization of the industrial supply chain [1] Group 2: Market Analysis - The Chinese industrial supply chain market is the largest globally, projected to reach 11.4 trillion yuan in 2024, with a digitalization penetration rate of only 6.2%, significantly lower than the 15% in the U.S. [2] - The MRO procurement market in China is expected to reach 3.7 trillion yuan by 2024, with a CAGR of 6.1% from 2019 to 2024, while the digitalized MRO market is projected to grow to 400 billion yuan, with a CAGR of 21.7% during the same period [2] - JD Industrial holds a market share of 4.1% in the domestic industrial supply chain technology and services market, with a mere 0.8% share in the MRO procurement market, indicating significant room for growth as digitalization increases industry concentration [2] Group 3: Competitive Landscape - The U.S. MRO industry showcases that leading companies like Grainger and Fastenal have long-term revenue growth outpacing U.S. manufacturing value added, indicating strong competitive advantages for top players [3] - JD Industrial's "Taipu" solution aims to achieve full supply chain digitalization, leveraging its consumer-side supply chain technology to establish high customer switching costs and enhance its collective procurement and digital service capabilities [3] Group 4: Financial Performance and Projections - JD Industrial operates with a light asset model and high turnover, achieving an inventory turnover rate of 24 times in 2024, significantly outperforming comparable domestic and international companies [3] - The company anticipates adjusted net profits of 1.096 billion, 1.735 billion, and 2.301 billion yuan for 2025-2027, representing year-on-year growth rates of 20.5%, 58.4%, and 32.6% respectively, with a target PE of 30, 19, and 14 times [4] - Based on a comparable company average valuation of 24 times PE, the target market value for JD Industrial is estimated at 41.2 billion yuan, indicating a 24% upside potential from current levels [4]

Group 1: Key Insights on Xingfu Electronics - The company is backed by Xingfa Group, a leading player in the phosphate chemical and fine chemical industry, ensuring strong supply chain support [8] - It focuses on semiconductor applications, with a complete wet electronic chemical product system, including 60,000 tons of electronic-grade phosphoric acid and 100,000 tons of electronic-grade sulfuric acid, leading the domestic market [8] - The company aims to become a world-class electronic materials enterprise, with ongoing internationalization and diversification strategies [8] Group 2: Key Insights on JD Industrial - JD Industrial is a leading provider of industrial supply chain technology and services in China, with a projected revenue of 20.398 billion yuan and an adjusted net profit of 909 million yuan for 2024 [10] - The company has established a comprehensive digital infrastructure for supply chain management, covering 80 product categories and serving over 11,100 key enterprise clients [10] - The industrial supply chain market in China is vast, with a size of 11.4 trillion yuan in 2024, and JD Industrial holds a market share of 4.1% in the industrial supply chain technology and services market [10] Group 3: Insights on the Coal Industry - The coal industry is experiencing a restructuring due to stricter safety regulations, with a cumulative coal production of 4.402 billion tons from January to November, showing a year-on-year increase of 1.4% [14] - The demand for coal remains stable, with a projected increase in coal consumption in the chemical industry, and the overall coal demand is expected to grow slightly [14] - Investment recommendations include stable high-dividend stocks like China Shenhua and Shaanxi Coal, as well as growth stocks such as TBEA and Huaihe Energy [14] Group 4: Insights on MEMS Sensor Industry - The company is a leading player in high-performance MEMS inertial sensors, with a revenue and net profit CAGR exceeding 38% from 2019 to 2024 [15] - The MEMS technology market is expanding, with applications in consumer electronics, automotive, industrial, and aerospace sectors [16] - The company is actively pursuing new market opportunities, including partnerships in autonomous driving and low-altitude aviation [16] Group 5: Insights on Automotive Industry - The automotive market is seeing a shift towards intelligent and high-end vehicles, with a focus on new energy vehicles and the potential for significant growth in the second-hand car market [24] - Recent data indicates a 9% month-on-month increase in retail sales of passenger vehicles, despite a year-on-year decline [26] - Investment recommendations include companies with strong alpha potential and those benefiting from the ongoing reforms in state-owned enterprises [27]

Core Viewpoint - JD Industrial is positioned as a leading digital industrial supply chain service provider in China, with significant growth potential driven by infrastructure development, industry standards establishment, and asset-light expansion strategies [1][2]. Group 1: Company Overview - JD Industrial has established itself as the largest participant in the domestic MRO procurement service market by 2024, serving 11,100 key enterprise clients and offering approximately 81.1 million SKUs across 80 product categories sourced from around 158,000 suppliers [2]. - The company generates most of its revenue from industrial product (MRO) sales, with projected revenue of 20.398 billion yuan and adjusted net profit of 909 million yuan for 2024, reflecting a CAGR of 25.4% and 21.9% from 2021 to 2024 [3]. Group 2: Market Potential - The Chinese industrial supply chain market is the largest globally, projected to reach 11.4 trillion yuan in 2024, with a digital penetration rate of only 6.2%, significantly lower than the 15% in the U.S. [3]. - The MRO procurement market in China is expected to reach 3.7 trillion yuan by 2024, with a CAGR of 6.1% from 2019 to 2024, while the digital MRO market is projected to grow to 400 billion yuan with a CAGR of 21.7% during the same period [3]. Group 3: Competitive Landscape - JD Industrial holds a market share of 4.1% in the domestic industrial supply chain technology and service market, with the second-largest player at only 1.5%, indicating a highly fragmented market with potential for consolidation through digitalization [4]. - In the MRO procurement market, JD Industrial's market share is 0.8%, with the second player at 0.3%, highlighting the low concentration in the industry [4]. Group 4: Operational Efficiency - The company operates with a high inventory turnover rate of 24 times in 2024, significantly outperforming comparable domestic and international firms, achieved through direct supplier shipments and reduced self-operated inventory [6]. - JD Industrial's focus on digital supply chain infrastructure has led to decreasing marginal costs and a downward trend in expense ratios, with projected per capita sales revenue contribution reaching 25 million yuan [6]. Group 5: Profit Forecast - The company is expected to achieve adjusted net profits of 1.096 billion yuan, 1.735 billion yuan, and 2.301 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 20.5%, 58.4%, and 32.6% [7]. - Based on a target PE of 24X and projected adjusted net profit of 1.735 billion yuan for 2026, the target market value is estimated at 41.2 billion yuan, indicating a 24% upside potential from current levels [7].

Investment Rating - The report assigns a "Buy" rating for JD Industrial (07618) as a first-time coverage [1]. Core Insights - JD Industrial is a leading provider of industrial supply chain technology and services in China, having established a comprehensive digital infrastructure for end-to-end supply chain solutions. By 2024, it is projected to become the largest player in the MRO procurement market in China, serving over 11,100 key enterprise clients and offering approximately 81.1 million SKUs from around 158,000 suppliers [5][18]. - The company is expected to achieve a revenue of CNY 20.4 billion in 2024, with a compound annual growth rate (CAGR) of 25.4% from 2021 to 2024. The adjusted net profit is forecasted to reach CNY 909 million, with a CAGR of 21.9% during the same period [4][25]. - The Chinese industrial supply chain market is the largest globally, with a market size of CNY 11.4 trillion in 2024, but the digital penetration is only 6.2%, significantly lower than the 15% in the U.S. [5][50]. - JD Industrial's market share in the domestic industrial supply chain technology and services market is 4.1%, while its share in the MRO procurement market is only 0.8%, indicating substantial growth potential [5][59]. Financial Data and Profit Forecast - Revenue and profit forecasts for JD Industrial from 2023 to 2027 are as follows: - Revenue: CNY 17.34 billion (2023), CNY 20.40 billion (2024), CNY 24.49 billion (2025E), CNY 29.91 billion (2026E), CNY 35.96 billion (2027E) [4]. - Adjusted net profit: CNY 818 million (2023), CNY 909 million (2024), CNY 1.10 billion (2025E), CNY 1.74 billion (2026E), CNY 2.30 billion (2027E) [4]. - The expected price-to-earnings (PE) ratios are 41 (2023), 36 (2024), 30 (2025E), 19 (2026E), and 14 (2027E) [4]. Industry Overview - The industrial supply chain market in China is characterized by its vast size and the early stage of digital transformation. The MRO procurement market is projected to reach CNY 3.7 trillion in 2024, with a CAGR of 6.1% from 2019 to 2024 [5][55]. - The market is highly fragmented, with JD Industrial being a key player. The company is positioned to benefit from the ongoing digitalization trends, which are expected to accelerate market consolidation [5][58]. - The report highlights that the U.S. leading MRO companies have consistently outperformed the growth of the manufacturing value added, indicating a potential for similar trends in China as the market matures [5][8].

Core Viewpoint - The company has successfully transitioned from a traditional e-commerce platform to a comprehensive industrial procurement service, leveraging AI and supply chain innovations to revolutionize the manufacturing procurement system in China [1][3][30] Group 1: Company Overview - The company, known for its e-commerce operations, has launched its industrial division, raising nearly HKD 2.8 billion upon its listing on the Hong Kong Stock Exchange [1] - The industrial division evolved from the company's enterprise business, which initially focused on purchasing office supplies [3] Group 2: Innovations and Services - The company identified inefficiencies in industrial procurement, leading to the creation of a standardized product library called "Mercator," which simplifies the purchasing process by unifying non-standard products [5][7] - The introduction of the JoyIndustrial AI model has significantly accelerated the standardization process, achieving in one year what would typically take five years [7] - The company has transformed its role from merely a product supplier to a "procurement hospital," offering in-depth services such as system diagnostics and material coding [10] Group 3: International Expansion - The company is expanding its operations internationally, with plans to open its first overseas physical store in Thailand, capitalizing on the global manufacturing trend [11][13] - It aims to replicate its successful domestic supply chain model in international markets, addressing the high costs associated with MRO procurement [13][15] Group 4: Market Position and Strategy - The company has captured 4.1% of the MRO market share in 2024, significantly outpacing its nearest competitor [23] - Its ambition is to become the "operating system" for industrial procurement, providing comprehensive services from diagnostics to continuous optimization [23][30] - The company is also venturing into the BOM (Bill of Materials) sector, particularly in emerging fields like robotics and renewable energy, to capitalize on future market growth [25][26] Group 5: Industry Impact - The company's efforts address the inefficiencies in China's production service sector, aiming to enhance the overall procurement process and strengthen the national industrial chain [28][30] - The listing of the industrial division marks a significant milestone in the evolution of China's industrial internet, emphasizing the importance of technology and industry understanding in improving efficiency [30]

Core Viewpoint - JD Industrial's IPO on the Hong Kong Stock Exchange marks a significant shift in the industrial supply chain sector from traditional inefficiencies to digital intelligence, highlighting market recognition of the value in industrial digital transformation [1] Industry Outlook: Trillion-Level Market Digitalization Dividend - China has the world's largest industrial system, with a supply chain market valued at approximately 11.4 trillion RMB, yet it suffers from inefficiencies and chaos stemming from traditional models [3] - The supply side is characterized by millions of dispersed manufacturers and distributors, leading to redundant channels and distorted information, while the demand side faces challenges in managing non-standardized products and complex supplier qualifications [3] - The digital penetration rate in China's industrial supply chain is currently low at 6.2%, compared to 15% in the U.S., indicating significant growth potential [4] Core Moat: Unique Model and Barriers Built on "Digital-Physical Integration" - JD Industrial's "Taipu" solution integrates data intelligence with physical products, creating an end-to-end system that standardizes product information and connects supply and demand efficiently [9] - The company has established a supply network of over 158,000 manufacturers and distributors, linking them with more than 11,000 key enterprise clients [9] - The business model has shown strong performance, with revenue growth from 14.135 billion RMB in 2022 to 20.4 billion RMB in 2024, and a net profit of 760 million RMB expected in 2024 [10] Growth Path: Multi-Dimensional Expansion Driving Ceiling Elevation - JD Industrial is expanding horizontally by entering specialized MRO fields and vertically by providing value-added services such as procurement strategy consulting and lifecycle management [15][16] - The company is also geographically expanding into Southeast Asia, South America, and the Middle East to support clients' overseas operations [17] - The industry is transitioning from high dispersion to gradual concentration, with JD Industrial positioned favorably to capture market share due to its established scale, brand reputation, and technological capabilities [18] Conclusion - JD Industrial has effectively addressed a trillion-scale market's need for efficiency through its "Digital-Physical Integration" model, with a clear and diverse growth path ahead [20]

Core Viewpoint - JD Industrial has successfully passed the listing hearing and plans to go public on the Hong Kong Stock Exchange by December 2025, marking a significant milestone after multiple attempts over two and a half years [1][2]. Financial Performance - For the fiscal year ending August 31, 2025, JD Industrial reported total revenue of 14.1 billion yuan, an 18.9% year-on-year increase, and a net profit of 450 million yuan [1]. - The revenue trajectory shows a growth from 6.8 billion yuan in 2020 to 20.4 billion yuan in 2024, with net profits fluctuating initially but stabilizing at 760 million yuan in 2024 [3][5]. Listing Attempts - JD Industrial submitted its initial IPO application in March 2023 but faced setbacks, including a failed application and two subsequent updates that did not pass the hearing until November 2025 [2]. Revenue Composition - Revenue is divided into product and service income, with product income showing consistent growth from 6.2 billion yuan in 2020 to 19.2 billion yuan in 2024, while service income has stagnated around 1.2 billion yuan since 2022 [5][6]. - The decline in transaction platform revenue is attributed to key enterprise clients preferring direct procurement over platform orders [6]. Market Position and Strategy - JD Industrial is focusing on expanding its client base, particularly among large enterprises, with revenue from key clients increasing from 6.7 billion yuan in 2022 to 11.4 billion yuan in 2024 [7]. - The company aims to enhance its business scale, attract strategic capital, and improve brand recognition as part of its IPO strategy [7]. Leadership and Ownership - Liu Qiangdong, as a non-executive director, has not received any compensation from JD Industrial between 2022 and 2024, although he was granted significant stock options in previous years [8]. - JD Group, controlled by Liu Qiangdong, holds approximately 78.84% of JD Industrial's issued share capital [8].