JD.com, Inc. 3Q25 Preview Summary Company Overview - **Company**: JD.com, Inc. (JD.O, JD US) - **Industry**: China Internet and Other Services - **Market Cap**: US$50,068 million - **Current Stock Price**: US$31.85 - **Price Target**: US$28.00, implying an 11x 2025e non-GAAP P/E [5][7][19] Key Financial Metrics - **3Q25 Revenue Growth**: Forecasted at 10.8% YoY for JD Retail (JDR) and 14.3% for the group [2] - **Operating Profit Growth**: Expected to grow 15% YoY for JDR [2] - **Non-GAAP Net Profit**: Projected to decline 65% YoY to Rmb4.5 billion, with a non-GAAP net profit margin (NPM) of 1.55% [2] - **4Q25 Revenue Growth**: Expected to slow further to 5.6% for JDR and 8.5% for the group [4] Investment and Margin Outlook - **Continued Investments**: JD is expected to maintain investments in Food Delivery (FD), Quick-Commerce (QC), and Jingxi, which will continue to impact margins negatively [2][4] - **Margin Pressure**: Non-GAAP NPM is forecasted to decline to 1.45% in 4Q25 from 3.25% in 4Q24 due to ongoing investments and competitive pressures [4] Market Dynamics - **High Base Effect**: Revenue growth in the smartphone, electronics, and home appliances categories has started to slow down, with August showing only 11% YoY growth compared to 23% in July [3] - **Trade-in Program Impact**: The trade-in program initiated in late August 2024 is expected to support revenue but may not offset losses from new business ventures [2][3] Competitive Landscape - **Intense Competition**: The e-commerce sector is expected to remain competitive, as indicated by JD's early Double 11 promotion this year [4] - **Consumer Sentiment**: There is a need for improved consumer sentiment to support revenue growth and margin recovery [23] Risks and Ratings - **Rating**: Maintain Equal-weight (EW) rating due to downside risks from revenue slowdown and earnings uncertainties [5][23] - **Valuation Methodology**: Discounted Cash Flow (DCF) with a 13% WACC and 3% terminal growth rate [13][34] Summary of Financial Estimates - **2025 Revenue**: Projected at Rmb1,331.7 billion [32] - **2025 Non-GAAP Net Income**: Estimated at Rmb30.2 billion [33] - **Active Customers**: Expected to grow to 671 million by 2025 [30] Conclusion - JD.com is facing a challenging environment with slowing revenue growth, ongoing investments impacting margins, and intense competition in the e-commerce sector. The company’s future performance will heavily depend on consumer sentiment and the effectiveness of its strategic initiatives.

Meituan (3690 HK) Conference Call Summary Company Overview - **Company**: Meituan (3690 HK) - **Sector**: IT Services - **Market Cap**: HKD 573.63 billion (USD 73.7 billion) [7][15] Key Industry Insights - **Food Delivery (FD) Losses**: Expected to peak in Q3 2025 and narrow significantly by Q4 2025. However, increased investment intensity in the market may lead to higher near-term losses [2][11]. - **Competition**: Key competitor Alibaba is focusing on retaining its quick commerce market share, which may prolong the timeline for Meituan's FD to return to profitability [2][4]. Financial Performance and Projections - **3Q25 Expectations**: - Core Local Commerce (CLC) revenue projected to decline by 2% year-over-year (yoy) with operating losses widening to RMB 16 billion. - Food Delivery operating loss forecasted at RMB 20 billion, translating to RMB 2.9 loss per order [5][11]. - **Revenue Growth**: New initiatives revenue expected to grow by 18% yoy, but operating losses are anticipated to widen to RMB 2.35 billion [5]. Market Share and Competitive Position - **Rider Metrics**: - Market share of total rider app sessions increased to 54.9% in September from 53.5% in August [3][19]. - Market share of rider capacity rose to 66.7% in September [3][22]. - **Merchant Metrics**: - Market share of total sessions in quick commerce merchant apps stabilized at 55.5% [3][26]. - Daily Active Users (DAU) market share in merchant apps remained stable at 48.6% [3][28]. Strategic Advantages - **Merchant Coverage**: Meituan has a deep understanding of its 14.5 million annual active merchants, with direct business development teams enhancing responsiveness to merchant needs [4]. - **Technology Adoption**: The implementation of a restaurant management system improves operational efficiency, aiding in order preparation and distribution [4]. - **Membership Upgrades**: Continuous enhancements to membership offerings are expected to yield long-term benefits [4]. Risks and Challenges - **Intensified Competition**: Risks from competitors such as Alibaba, Douyin, and JD may impact market share and profitability [4][33]. - **Investment Impact**: Aggressive investments could pressure margins, and a potential consumption slowdown may further complicate recovery [33]. Valuation and Target Price - **Target Price Adjustment**: Target price reduced from HKD 125 to HKD 114, reflecting a 9.9% upside from the current share price of HKD 103.70 [7][33]. - **Earnings Projections**: Adjusted EPS estimates for 2025 show a significant decline to -1.62 from a previous estimate of -0.27 [8][32]. Conclusion - Meituan maintains a "Buy" rating despite challenges, with expectations of long-term benefits from its strategic investments and competitive positioning in the food delivery and quick commerce sectors [4][33].

Core Insights - The African market has faced significant challenges over the past few years, including currency volatility, high inflation rates, and supply chain disruptions, which have impacted online retail operations [1][2] - Recent improvements in currency stability have led to increased supply from Chinese manufacturers, boosting consumer confidence and easing operational challenges for online retailers [3][4] - The ongoing trade war between China and the US has indirectly benefited African online retailers by increasing the availability of goods from Chinese suppliers [4] Market Focus - The company operates in nine African markets, focusing on e-commerce for physical goods targeted at the middle class, defined as individuals earning between $400 and $500 per month [6][9] - The competitive landscape in South Africa is challenging, with established players like Takealot and international platforms, leading the company to exit the South African market [8][10] - The company has a dominant position in eight of the nine markets it operates in, having tailored its business model to the specific purchasing power of these regions [9][10] Competitive Landscape - Increased competition is anticipated in markets like Nigeria, particularly from non-resident platforms such as Temu and Shein, which have begun to establish a presence [11][12] - Despite the competition, the company believes it can maintain its market position by adapting to local conditions, indicating that financial resources alone do not guarantee success in these markets [12]

Core Insights - JD.com's accelerating user growth is a significant driver for its core Retail business and New Businesses like Food Delivery, leading to a 20.6% growth in Retail revenue and a 199% increase in the new business segment in Q2 2025 [1][4] User Growth and Engagement - The 618 Grand Promotion marked a pivotal moment for JD, with 2.2 billion orders and over 100% year-over-year growth in purchasing users, while quarterly active customers (QAC) grew over 40% [2][9] - JD Plus members demonstrated strong loyalty, with shopping frequency increasing by over 50%, indicating a willingness to spend more frequently [2][9] Food Delivery as a Growth Driver - Food Delivery is becoming increasingly important for JD, with high-frequency use enhancing engagement and supporting Retail spending [3][4] - The company is investing in logistics and technology, including the launch of JoyExpress in Saudi Arabia and plans to double overseas warehouses by 2025 to maintain this momentum [3] Competitive Landscape - Alibaba has rapidly expanded its user engagement through Taobao Instant Commerce, achieving 300 million monthly active consumers by August 2025, a 200% increase since April [5] - PDD Holdings has also seen strong user growth through Pinduoduo and Temu, often surpassing JD in attracting incremental users, particularly in lower-income and international segments [6] Financial Performance and Valuation - JD.com's shares have gained 1.3% year-to-date, underperforming the Zacks Retail and Wholesale sector's rise of 8.6% and the Zacks Internet-Commerce industry's growth of 12.2% [7] - The company is trading at a forward 12-month price-to-earnings ratio of 10.35X, significantly lower than the industry's 24.7X, and carries a Value Score of A [10] - The Zacks Consensus Estimate for JD's earnings is $2.72 per share for 2025, reflecting a year-over-year decline of 36.15%, with a projected growth of 31.74% to $3.58 per share in 2026 [13]

Core Insights - Uber Technologies, Inc. is recognized as one of the 15 best American tech stocks to buy currently [1] - The company plans to collaborate with Chinese self-driving tech firm Momenta to test level 4 autonomous vehicles in Germany next year [1][2] - Uber aims to expand its robotaxi operations amid increasing competition in the autonomous vehicle sector [2] Company Strategy - Uber is actively building its position in the robotaxi market through partnerships with companies such as Waymo, Lucid Group, and WeRide [3] - The partnership with Momenta was initially announced in May 2025, focusing on bringing autonomous vehicles to markets outside the U.S. and China [3] Business Overview - Uber Technologies, Inc. operates as a global transportation technology company, offering services in ride-hailing, courier services, food delivery, and freight transport [4]

Core Viewpoint - Jack Ma has returned to a prominent role in Alibaba Group, focusing on artificial intelligence and competing with JD.com and Meituan [1][2] Group 1: Jack Ma's Return and Strategy - After a period of absence due to regulatory scrutiny, Jack Ma is now actively shaping Alibaba's corporate strategy, with the initiative dubbed "Make Alibaba Great Again" [2] - Ma's return coincides with a renewed focus on AI and cloud services, with significant investments being made to enhance Alibaba's competitive position [4][5] Group 2: Financial Implications and Market Performance - Alibaba has committed over 380 billion yuan ($54.1 billion) to AI and cloud infrastructure over three years, indicating a substantial investment in emerging technologies [5] - The company's cloud revenue has seen a 26% growth in a single quarter, marking the fastest growth rate in years, contributing to a nearly 90% increase in stock price year-to-date [6] Group 3: E-commerce Strategy and Market Share - Ma has reasserted influence in Alibaba's e-commerce sector, leading to a leadership change aimed at consolidating operations across food delivery, logistics, and travel services [7] - Alibaba's market share in food delivery has improved to 43%, closely competing with Meituan's 47% share [7]

Summary of JD.com Inc. (JD) Conference Call Company Overview - **Company**: JD.com Inc. (JD) - **Industry**: E-commerce and Food Delivery Key Points Discussed 1. Food Delivery Competitive Landscape - JD.com noted intense competition in the food delivery sector but maintained steady high-value order volumes with stable Gross Transaction Value (GTV) trends from June to July - Strong user engagement growth observed, particularly among younger and female user cohorts [1][1][1] 2. Food Delivery Unit Economics - JD.com expects gradual improvement in unit economics (UE) driven by: - Optimizing subsidy efficiency and operating efficiency - Increasing fulfillment revenue and optimizing rider costs - Monetization through the rollout of commissions (expected in 2026) and advertising - Reduction of overall user subsidies [1][1][1] 3. JD Retail's Gross Margin Expansion - The company is confident in achieving healthy growth and stable profit margins despite entering a high-base period due to the government's trade-in program anniversary - Anticipates further improvements in gross profit margin through procurement scale improvements and margin-accretive advertising revenue contributions [1][1][1] 4. International Expansion - JD.com launched its international site, Joybuy, in four European countries, focusing on full category offerings and same/next-day delivery with local warehouses [1][1][1] 5. Revenue Growth Projections - Despite normalization of top-line growth, JD.com estimates healthy growth rates of 13% and 8% for the third and fourth quarters of 2025, respectively - Significant investments of RMB 13 billion into food delivery initiatives are expected to lead to near-term profit weakness [2][2][2] 6. Investment Rating and Price Target - JD.com is rated as a "Buy" with a 12-month target price of US$45 (HK$174), indicating a potential upside of approximately 45.5% [2][2][2] 7. Advertising Revenue Growth - Advertising revenue grew strongly at over 20% year-on-year in the second quarter, contributing less than 10% of total revenue [10][10][10] 8. User Cohorts and Rider Costs - JD.com has onboarded over 1.5 million quality merchants and hired 150,000 full-time riders, with a focus on providing social insurance to all full-time riders, resulting in higher rider costs compared to competitors [13][13][13] 9. Risks and Challenges - Key risks include tougher competition in China's e-commerce and food delivery markets, potential slowdown in online GMV, and fluctuations in JD Retail margins due to ongoing investments in price competitiveness and user experience [15][15][15] 10. Financial Performance Metrics - JD.com reported a gross profit margin of 16% and a net income of RMB 48.658 billion for the year, with a year-on-year growth of 35% [11][11][11] Conclusion JD.com is positioned as a leading player in the e-commerce and food delivery sectors, with a focus on improving unit economics and expanding its international presence. The company faces competitive challenges but is optimistic about future growth and profitability.

Summary of Meituan's 2Q25 Conference Call Company Overview - **Company**: Meituan (3690.HK) - **Industry**: E-commerce & Logistics in China Key Points and Arguments Financial Performance - **2Q25 Results**: Revenue increased by 12% year-over-year, but adjusted net profit fell by 89% year-over-year, missing expectations of 16% revenue growth and a 54% decline in profit [2][25] - **Food Delivery Business**: Experienced significant losses, with an estimated decline in profits of approximately Rmb10 billion compared to competitors JD and Alibaba, which reported losses of over Rmb13 billion and Rmb10 billion respectively [2][25] - **Market Reaction**: Initial market response was negative, with Meituan's stock dropping 9% compared to a 3% decline in the KWEB index [2][25] Competition and Market Dynamics - **Food Delivery Competition**: Intense competition since May has led to wider losses, with expectations of continued losses into 3Q. Estimated EBIT loss per order for 3Q is projected to exceed Rmb2, compared to previous breakeven expectations [2][21] - **Market Share**: Long-term market share is expected to decrease from 75-80% to 50-55% due to increased competition [20][29] Growth and Strategic Initiatives - **Volume Growth**: Food delivery volumes grew by approximately 11% year-over-year in 2Q25, with forecasts of 13% growth for 3Q25 and FY25 [21][23] - **Instashopping Growth**: Instashopping order volume is expected to grow by 31% year-over-year, driven by increased transaction frequency and new user acquisition [21][24] - **Strategic Pivot**: Closure of Meituan Select and a shift towards Ella Supermarket/Instashopping indicate a commitment to core business defense [20][29] Financial Forecasts - **Revenue Forecasts**: Adjusted revenue forecasts for FY25E-FY27E have been cut by 7%, with FY25E adjusted net profit revised to a loss of Rmb14 billion from a previous profit estimate of Rmb29 billion [25][29] - **Valuation**: Target price revised to HK$144 per share from HK$159, reflecting a downward adjustment in long-term market share and profit expectations [25][36] Risks and Challenges - **Downside Risks**: Include worse-than-expected competition, labor cost inflation, and food safety concerns [30][31] Long-term Outlook - **Profit Recovery Potential**: Positive outlook for profit recovery from FY26E-FY27E as competition subsidies are expected to normalize [29][30] - **Investment in New Initiatives**: Continued investment in grocery retail and overseas expansion, with a long-term target of achieving Rmb100 billion in overseas GTV by 2033E [28][29] Additional Important Information - **Market Capitalization**: HK$725.5 billion / $93.1 billion [8] - **Enterprise Value**: HK$553.1 billion / $71.0 billion [8] - **3M Average Daily Trading Volume**: HK$6.8 billion / $861.7 million [8] This summary encapsulates the critical insights from Meituan's 2Q25 conference call, highlighting the company's financial performance, competitive landscape, growth strategies, and future outlook.

Core Insights - JD.com reported better-than-expected results for 2Q25, with revenue of RMB356.7 billion, a 22.4% year-over-year increase, and 6% above Bloomberg consensus, driven by strong JD Retail growth and logistics revenue from food delivery [1] - The national subsidy program significantly contributed to a 20.8% year-over-year growth in retail revenue, reaching RMB310 billion, exceeding the 17.5% consensus [2] - JD's food delivery service, launched in April 2025, saw rapid order growth, with daily orders averaging 15 million in 2Q25, although it incurred substantial operating losses [3] - JD's acquisition strategy includes the purchase of Hong Kong Jiabao Food Supermarket and a takeover offer for CECONOMY, enhancing its globalization efforts [4] - JD's valuation remains at a discount compared to peers, trading at $31.58 per ADS with an enterprise value of $40.96 billion, while projected EBITDA shows significant multiples below industry averages [5] Financial Performance - JD.com achieved a non-GAAP net profit of RMB7.4 billion, down 49% year-over-year due to increased investments in food delivery, but still 38% above consensus [1] - Retail operating margin improved to 4.5%, with operating profit of RMB13.9 billion, outpacing revenue growth [2] Business Expansion - The food delivery segment experienced a significant increase in user engagement, with platform-wide shopping frequency rising over 40% year-over-year in 2Q25 [3] - JD's acquisition of Hong Kong Jiabao Food Supermarket for HK$4 billion and the takeover offer for CECONOMY at €4.60 per share are part of its strategy to leverage supply chain strengths and expand internationally [4] Valuation Metrics - JD's enterprise value is $40.96 billion, with projected CY2025 EBITDA at $3.43 billion, reflecting an 11.9x EV/EBITDA multiple, which is substantially lower than peers trading at 16x and 21x for CY2025 and CY2026, respectively [5]

Grocery Stocks Fall on Amazon’s Food Delivery Expansion. Hear about it on the Bloomberg Stock Movers report. https://t.co/TJN0kjzqgF ...