2025-10-13 15:12JD.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.