Source: Wall Street News

Benefit from$JD LOGISTICS (02618.HK)$The rapid expansion and steady growth of JD retail,$JD.com (JD.US)$/$JD-SW (09618.HK)$Both revenue and profit for the first quarter exceeded market expectations, and net profit grew at a double-digit percentage rate.

On Thursday, JD released financial reports showing that the Group's net revenue for the first quarter (up to the end of March 2024) increased 7% year-on-year to 260.05 billion yuan, exceeding market estimates of 258.35 billion yuan; net profit increased 18.8% year-on-year to 7.37 billion yuan; and net profit attributable to the company's common shareholders increased 13.9% year-on-year to 7.1 billion yuan, better than market expectations.

In addition, JD's adjusted profit before interest, tax, depreciation and amortization for the first quarter was 10.79 billion yuan, up 14% year on year, higher than the estimated 9.5 billion yuan; the adjusted operating profit margin was 3.4%, up from 3.2% in the same period last year, and the estimated 3%; and the adjusted EBITDA profit margin was 4.1%, up 2 percentage points from 3.9% in the same period last year. JD's adjusted revenue per ADS for the first quarter was 5.65 yuan, compared to 4.76 yuan for the same period last year, higher than the estimate of 4.67 yuan.

After the financial report was announced, the pre-market increase of JD's US stock increased to 4.05%.

JD Logistics's revenue soared and turned a loss into a profit, and the retail business grew steadily

By business, JD Logistics is still expanding at the fastest rate. JD retail is maintaining a steady growth trend, and new businesses (including JD Production and Development, Jingxi, and overseas businesses) are shrinking at an accelerated pace.

• JD Logistics's first quarter revenue increased 14.7% year-on-year to 42.14 billion yuan, better than the market estimate of 40.42 billion yuan, of which external customer revenue reached 29.25 billion yuan, accounting for about 70%; net profit was 238 million yuan, with a loss of 989 million yuan in the same period last year; and adjusted net profit of 660 million yuan. The core profit indicators all reached the best level in the first quarter since listing.

• As the backbone of JD's revenue, JD Retail's revenue for the first quarter increased 6.8% year over year to 226.84 billion yuan, and operating profit was 9.33 billion yuan, down slightly from 9.84 billion yuan in the same period last year.

• Revenue from new businesses (including JD Production and Development, Jingxi and overseas businesses) fell 19.2% year-on-year to 490 million yuan, with an operating loss of 670 million yuan, and a loss rate of 13.8%.

In the first quarter, commodity revenue increased 6.6% year on year to 208.51 billion yuan. Among them, the daily necessities category resumed rapid growth from the previous quarter, and revenue growth rate reached 8.6% year on year. Revenue from electronic products and household appliances increased 5.3% year-on-year to $123.21 billion.

Service revenue increased 8.8% year on year to 51.54 billion yuan in the first quarter. Among them, the logistics sector showed a relatively rapid growth trend. Revenue in the first quarter increased 13.8% year on year to 32.25 billion yuan.

Marketing expenses increased significantly year-on-year, and R&D and administrative expenses declined

Expenses increased slightly in the first quarter. Due to factors such as promotion, marketing expenses increased dramatically, and operating costs and contract execution expenses also increased, but R&D expenses, general and administrative expenses all decreased year over year.

Operating costs increased 6.4% year over year to 220.3 billion yuan.

Fulfillment expenses (mainly including procurement, warehousing, distribution, customer service and payment processing expenses) increased 9.3% year over year to $16.8 billion; accounting for 6.5% of revenue, compared to 6.3% in the first quarter of 2023.

Marketing expenses increased 15.6% year over year to $9.3 billion, accounting for 3.6% of revenue and 3.3% in the first quarter of 2023. The increase in revenue was mainly due to increased spending on promotional activities, including expenses related to Spring Festival Gala sponsorship.

R&D expenditure decreased by 3.6% year over year to $4 billion, accounting for 1.6% of revenue and 1.7% in the first quarter of 2023.

General and administrative expenses decreased by 21.0% year-on-year to $2 billion, mainly due to a reduction in equity incentive costs. General and administrative expenses as a percentage of revenue were 0.8%, compared to 1.0% in the first quarter of 2023.

Editor/jayden