Revenue performance was stable this quarter: 2023Q4, the company achieved operating revenue of 306.1 billion yuan, +3.6% year over year, 1) JD's retail revenue for the quarter was 267.6 billion yuan, +3.4% year over year. We estimated the low single-digit year-on-year increase in self-operated business revenue. Among them, revenue from the charged category grew by 6%, and revenue from the supermarket category grew 0.2%, which was corrected for the first time in 2023; the main reason is that the commission portion is affected by the high commission-free base, and the advertising part is currently affected by the high base of active platform merchants. number, Order volume and user growth accelerated in Q4, and commercial monetization is not currently a top priority. 2) JD Logistics's revenue was 47.2 billion yuan, +15.4% year over year; 3) New business revenue decreased 9% year over year, mainly affected by Dada and the reduction in Jingxi's international business.
The company's non-GAAP net profit was 8.4 billion yuan, and the non-GAAP net profit margin was 2.7%, an increase of 0.1 pct compared with the same period last year. By business, retail operating profit margins declined slightly, mainly due to lower free shipping thresholds and increased marketing expenses. The profit margin for logistics operations increased 0.7 pct year over year. Thanks to the continuous improvement in the company's supply chain efficiency, the profit margin for new business operations narrowed from -18% in the same period last year to -12%, mainly due to the reduction in Jingxi and international business.
Looking at shareholder returns, the company's 2023 dividend & repurchase return was 4.7%. 1) Dividends: The company announced a 2023 annual dividend of $0.38 per share ($0.76 per ADs), with a total dividend return of about US$1.2 billion; 2) Repurchase: The company repurchased 55.5 million common shares in the December quarter, totaling approximately US$200 million, and repurchased US$360 million for the full year of 23. Furthermore, the company approved a new repurchase plan, effective after March 17, 2024, and can repurchase no more than $3 billion of shares as of March 2027.
Investment advice: The company's e-commerce share is expected to stabilize in 2024, and the rating will be raised to “buy”. The company's internal adjustments are beginning to bear fruit. New merchants are growing rapidly, and the frequency of shopping for core users has increased significantly. In 2024, the company will continue its 24-25 revenue forecast to reflect the expectation that the company's core business will return to rapid growth. The estimated revenue for 2024-2025 will be 11522/1231.4 billion yuan, with an adjustment of -4.3%/-4.7%, which mainly reflects the company's current focus on cultivating a merchant ecosystem, and commercialization is less important, adding an additional revenue forecast of 1324.7 billion yuan in 2026. Currently, the company's corresponding 24-year PE is about 8x, and the implied e-commerce business PE is 7x. After excluding cash and short-term investments, the 24-year PE is about 3x. The valuation is low and flexible. The adjusted net profit CAGR for 2024-2026 is expected to be 10%. We maintain our target price of 127-137 HKD, which is 34%-44% from the current increase. The company's e-commerce share is expected to stabilize in 2024. The company continues to repurchase dividends to give back to shareholders and raise the “buy” rating.
Risk Alerts: Policy risks, business uncertainty brought about by company organizational restructuring, macroeconomic systemic risks, etc.