CITIC Securities expects the company to continue to emphasize the core goals of GMV growth, continue to invest in user growth and experience, and the POP ecosystem, and is optimistic about its long-term development.
The Zhitong Finance App learned that CITIC Securities released a research report stating that it maintains the JD Group-SW (09618) “buy” rating, continues to emphasize low price mentality and user growth, vigorously introduces POP merchants to enter, enhances supply abundance, and promotes 1P/3P fair competition at an algorithmic level. The target price is HK$123. The company's 23q4 revenue was 306.1 billion yuan/YOY +3.6%, and non-GAAP net profit was 8.42 billion yuan/net interest rate 9.9%. Revenue and profit were better than market expectations. According to the company's performance announcement, the company will launch a new round of repurchase plans in March 2024 and pay annual cash dividends to enhance shareholder returns. Looking ahead to 2024, the bank expects the company to continue to emphasize the core goals of GMV growth, continue to invest in user growth and experience, and the POP ecosystem, and be optimistic about its long-term development.
According to the report, the company has initiated a new round of repurchases, distributed annual dividends, and increased shareholder returns. 1) In terms of repurchases, 23Q4 repurchased US$203 million in a single quarter, with a cumulative repurchase of US$356 million for the full year of 2023. The last round of repurchase plans (20M3~24M3) will end in March. According to the company's announcement, the company will launch a new round of a 3-year repurchase plan with a maximum limit of 3 billion US dollars on March 17. 2) In terms of dividends, the company announced that it will pay an annual dividend of $0.76/ADS, totaling approximately $1.2 billion. The bank is based on the company's latest market value of US$39.6 billion (2024/3/6). If the company's repurchase efforts continue at the 23Q4 level in 2024, the return corresponding to annual repurchases is expected to reach 2.05%; the return corresponding to cash dividends is 3.03%, and the combined return on repurchases and dividends is 5.08%, which is expected to increase significantly from 2023.
The bank mentioned that in terms of user growth, according to the JD Blackboard News WeChat account, the number of active users accelerated in 23Q4, and the average shopping frequency of users continued to rise. The JD sales live broadcast room broke the circle during the Double Eleven period, and the total number of viewers exceeded 380 million; according to the company's performance exchange meeting, the trend of user growth continued until 24Q1. Furthermore, JD is the exclusive interactive cooperation platform for CCTV's 2024 Spring Festival Gala. It is expected to receive Spring Festival Gala traffic and activate and recruit users in the sinking market. In terms of merchant introduction, according to the JD Blackboard WeChat account and company performance exchange meeting, as of 23Q4, the total number of third-party merchants on the JD platform was close to 1 million. The number of 3P merchants for the whole year was +188% year-on-year, and the number of new merchants added was +4.3 times year-on-year. Thanks to the rapid growth in the number of 3P merchants, the bank expects the “merchant entry → sales conversion → monetization” channel to continue to advance, driving the long-term development of the platform's ecosystem and commercial interests.