JD(US:JD)2025-05-18 14:08Summary of JD.com Conference Call Company Overview - Company: JD.com (JD.OQ, JD US) - Industry: Media & Internet, specifically e-commerce in China Key Financial Highlights - 1Q25 Performance: - Non-GAAP EPS increased by 49% year-over-year, exceeding Bloomberg consensus by 25% and internal forecasts by 15% [1] - Revenue grew by 16% year-over-year, surpassing the consensus estimate of 12% growth by 4% [1] - FY25 Revenue Guidance: - Raised from "high-single-digit percent" growth to "double-digit percent" growth, driven by JD Retail's expected revenue growth [1] - Earnings Outlook: - Management expressed caution regarding FY25 earnings, retracting previous guidance of high-single-digit percent growth in net profit due to necessary investments in the food delivery (FD) business [1][3] Investment in Food Delivery Business - Commitment to FD: - JD is committed to investing in the FD business, viewing it as a strategic initiative to build its on-demand retail (ODR) business and defend against competition from Meituan [2] - Financial Impact: - Expected operating loss from new businesses, including FD, to reach CNY 11 billion in FY25, compared to a loss of CNY 3.4 billion in FY24 [3] Revenue and Profit Projections - Revised Projections: - FY25F revenue projected at CNY 1,299,262 million, a 3% increase from previous estimates [18] - Non-GAAP net profit for FY25F revised down to CNY 46,930 million, a 10% decrease from earlier projections [18] - JD Retail Performance: - Anticipated revenue growth of 12% year-over-year and operating profit growth of 19% [3] Shareholder Returns - Share Repurchase: - JD has repurchased USD 1.5 billion worth of shares year-to-date, accounting for 2.8% of its market cap [3] - Target Price: - Target price lowered to USD 52 from USD 55, reflecting a 30% discount on JD's cash balance to account for FD investments [3][4] Market Position and Valuation - Current Market Cap: Approximately USD 53.99 billion [4] - Stock Valuation: - Currently trading at 8.8x FY25F P/E, with an implied upside of 39.6% based on the new target price [4] Risks and Considerations - Downside Risks: - Potential risks include further deterioration of the macroeconomic environment and weaker margin ramp-up for JD Retail and/or JD Logistics [12][38] Additional Insights - E-commerce Model: - JD operates primarily on a first-party (1P) model, providing marketplace and advertising services to third-party merchants [11] - Logistics Services: - JD Logistics offers comprehensive logistics services, which are integral to its retail ecosystem [11] This summary encapsulates the key points from the JD.com conference call, highlighting financial performance, strategic investments, market positioning, and potential risks.