Main financial indicators: we expect the total revenue of JD.com Group 2022Q4 to reach 296.7 billion yuan (YoY+7.5%), of which commodity revenue is expected to be 241.5 billion yuan (YoY+3%) and service revenue is expected to be 55.2 billion yuan (YoY+34%). The Non-GAAP homing net profit of 2022Q4 of JD.com Group is expected to be 5.9 billion yuan (YoY+64%), and the Non-GAAP homing net interest rate will increase by 0.7 pct to 2% compared with the same period last year, of which the growth rate of total revenue is expected to be still under pressure. Mainly considering the impact of the strict control of the epidemic in November and the high base caused by the Singles' Day activities in 2021, the increase in the number of cases of deregulation in early December affected the delivery of compliance. There is a certain pull in late December due to the advance preparation of goods during the New year's Festival. Non-GAAP homing net profit is expected to continue to improve in line with the expected year-on-year improvement, although Q4 double 11 and other festivals have increased marketing investment, but the company's business continues to reduce costs and increase efficiency significantly.

User outlook: we expect the number of active users of JD.com Group to reach 600 million as of 2022Q4, an increase of 11.7 million over the previous quarter, mainly due to 1) the promotion of customer acquisition on Singles Day; 2) the advantages of the proprietary logistics system during the epidemic; and 3) the continuous customer acquisition promotion of innovative businesses such as Jingxi in the sinking area. In the future, with the continuous development of JD.com 's omni-channel business, improving the proportion of high-quality users and user participation will become the main direction in the future.

JD.com retail: the retail business is disturbed by the epidemic in the short term, and continues to release profits due to the increase in operating efficiency and the proportion of 3P business in the long term. We expect 2022Q4 JD.com 's retail revenue to grow 3% year-on-year to 257.9 billion yuan, and operating profit margin to 2.4% year-on-year; 2022Q4 1P live product revenue is expected to grow 3% year-on-year to 145.3 billion yuan, 1P grocery revenue 3% year-on-year to 96.2 billion yuan, 3P platform and advertising service revenue 6% year-on-year to 23.6 billion yuan. Among them, the year-on-year growth rate of retail revenue of 2022Q4 JD.com is expected to slow to a low single digits, mainly due to 1) the overall market of the industry has been disturbed by the epidemic: according to the data of the National Bureau of Statistics, the total retail sales of consumer goods in the country from October to December 2022 are-0.5% of the total retail sales of consumer goods compared with the same period last year, 1.8% of the real goods online retail sales, + 22% of the year-on-year retail sales of physical goods, and 16% of the short-term consumer demand is disturbed by the epidemic. 2) from the point of view of the category: the Q4 revenue of the Japanese category is expected to continue the slowing trend of Q3, mainly because there are more daily categories in the ① Jingxi business, and the growth rate of the category is affected after the business adjustment; in the ② super category, the categories such as mother and infant, alcohol and other categories are greatly affected by the macro environment. Among the live appliances category, Q4 is expected to be under some pressure due to the reduction in consumer demand and the impact of compliance under the epidemic. Mobile phone categories benefit from the increase in e-commerce channel sales due to the release of Apple Inc's new phone in September.

JD Logistics, Inc.: the consolidation of Debang Logistics has brought a boost to the growth rate, and the pressure on implementation has been gradually alleviated after the adjustment of epidemic control policies. According to the data of the State Post Bureau, the year-on-year growth rate of national express business in October / November 2022 was-1% in October / November, respectively. The increase in the number of cases of deregulation in the first ten days of December affected the performance and distribution, and the industry was greatly affected by the epidemic. However, with the adjustment of the control policy and the reduction of cases after the peak, the pressure on implementation gradually alleviated, while the company completed the consolidation of Debon Logistics at the end of July 2022 to boost the growth rate. We expect 2022Q4 JD Logistics, Inc. 's revenue to increase by 19% to 36.3 billion yuan over the same period last year, with an operating profit margin of 1%. For a long time, we are still firmly optimistic about JD Logistics, Inc. 's income stability advantage as the leader of the proprietary supply chain model.

New business: the overall budget of the new business is invested cautiously, and the strategic contraction of Jingxi continues to optimize UE, which is expected to continue to reduce losses. We expect the revenue of 2022Q4 JD.com 's new business to grow by-9% to 7.5 billion yuan compared with the same period last year. The new business mainly includes JD.com Industry and Development, Jingxi, JD.com International and so on. In 2023, Jingxi will continue to improve the underlying supply chain and UE around efficiency and experience, and the per capita compliance cost is expected to further decline. In the future, we will continue to focus on building short-chain logistics and other capabilities to strengthen the cultivation of users' consumption habits.

Profit forecast and investment rating: due to the strong resilience of the company's various businesses and the continuous release of profits under cost reduction and efficiency, we estimate that the company's revenue from 2022 to 2024 will be 10475pm 12001max 13573 billion, the homing net profit will be 106241max 32.8 billion, the Non-GAAP homing net profit will be 24629629,000,000 yuan, the corresponding diluted EPS will be 3.32pm 7.34pm 9.77 yuan, and the corresponding EPS E will be 64Universe 2922X. According to the SOTP valuation method, we give JD.com Group a total market capitalization of 855.7 billion yuan in 2023, corresponding to the target price of 274 yuan / HK $316, maintaining a "buy" rating.

Risk tips: repeated impact of the national epidemic; lower-than-expected macroeconomic growth; Internet policy regulation and valuation adjustment risks; increased competition in the retail / logistics industry; sinking market development is not as expected; platform merchants' ecological development is not as expected; user growth is not as expected.