BoCom International Development and Research report Index$JD.com Group-SW (09618.HK) $Announce a relationship with$Tencent (00700.HK) $Renewing the three-year strategic cooperation agreement, Tencent continues to provide primary and secondary access to JD.com on Wechat. JD.com will issue Class A common shares to Tencent in the next three years, with a consideration of up to $220 million.

In December, Tencent reduced its stake in JD.com from 17 per cent to 2.3 per cent. The renewal of this cooperation confirms our previous view that the cooperative relationship between the two sides will continue. At the highest consideration of $220 million, Tencent's stake in JD.com increased by up to 0.2 per cent.

JD.com and Tencent cooperate stably. Although Jingxi's business has been adjusted, the first-level shopping entrance to Wechat still comes from JD.com. The bank expects that the two sides may have more levels of cooperation in the development of business strategy, such as the cooperation between JD.com and Video account.

The bank maintains JD.com 's buy rating and expects JD.com 's revenue growth of 11%, 22%, 15%, new business structure adjustment, profit or continuous optimization in 2022-24. Proprietary income is expected to be flat in the second quarter from a year earlier, with a 10 per cent increase in 618 GMV or better-than-expected results. The current price corresponds to 25.8 times earnings in 2023. Maintain the target price of US $81 / HK $315.