Q4 performance outlook: we expect the company's 4Q22 revenue to be + 7.1% to 295.6 billion yuan compared with the same period last year, and the adjusted net profit is expected to be 5.5 billion yuan during the quarter, corresponding to the adjusted net interest rate from + 60bps to 1.9% year-on-year, mainly due to strict cost control measures and cautious investment strategies for new business.
Logistics performance has recovered, and the performance of short-term supermarkets will still lag behind that of live products:
We expect JD.com 's retail sales to grow in the middle and low digits year-on-year during the quarter. From October to November, the domestic epidemic repeatedly poses challenges to compliance. At the same time, Singles Day in 2021 brings a high base effect. With the adjustment of epidemic prevention and control policies in December, logistics compliance has gradually resumed, while the annual cargo festival has also brought some growth. In terms of categories, in view of the adjustment of Jingxi business, the impact of the epidemic on non-essential categories such as beverages and beauty makeup, and the budget reduction of enterprise recruitment departments, we believe that the performance of self-operated products will still lag behind that of live products.
It is expected that the annual income growth rate will gradually repair, and the profit margin level will increase steadily: entering 2023, given that it still takes time for users' consumer confidence to recover, we are more cautious about JD.com 's retail income growth in the first quarter of this year. We look forward to a gradual recovery in retail growth from the second quarter. In addition, the company will continue to have strict financial discipline in the new year, and with the improvement of operating efficiency and the improvement of the platform ecology, the company is still expected to maintain a steady increase in profit margins throughout the year.
Investment advice: maintain the buy-A rating with a 12-month SOTP target price of HK $334. Entering the new year, JD.com 's main retail business is expected to continue to record steady growth by virtue of its leading supply chain capabilities, core categories and the good performance of the main consumer groups. in addition, it also maintains the steady performance of the profit end by implementing strict cost control measures and adjusting the launch of new business. We expect revenue growth of 10%, 15%, adjusted net profit of 26 billion / 34.5 billion yuan, and adjusted net interest rate of 2.5% and 2.9% respectively in 2023.
Risk tips: investment in areas such as category expansion and logistics technology lowers overall profit margins; global supply chains remain in short supply.