Source: Barron's
Author: Cho Yan
5/16,$JD.com (JD.US)$/$JD-SW (09618.HK)$Financial results for the first quarter of 2024 have been announced. According to the report, JD's revenue increased 7.0% year over year to 260 billion yuan; net profit increased 13.9% year over year to 7.1 billion yuan; and earnings per share were 5.65 yuan. Earlier, analysts surveyed by FactSet estimated that the company's revenue for the quarter was 258.1 billion yuan, or 4.67 yuan per share.
Among them, revenue from products, including electronics, household appliances, and household goods, was 208.5 billion yuan, up 6.6% year on year; revenue from logistics and other services was 32.3 billion yuan, recovering to 13.8%; and revenue from platforms and advertising services increased slightly by 1.2% year on year to 19.3 billion yuan.
In terms of expenses, fulfillment expenses increased 9.3% year on year to 16.8 billion yuan, higher than the product growth rate of 6.6%, reflecting an increase in order volume over revenue growth; marketing expenses increased 15.6% year over year to 9.3 billion yuan; R&D expenses and general administrative expenses were 4 billion yuan and 2 billion yuan, respectively.
Overall, JD's performance in the first quarter exceeded market expectations, bringing some confidence to investors — by the close of the US stock market on May 16, JD's stock price had closed up 1.93% to $34.27; by the close of Hong Kong stocks on May 17, the company's stock price had risen 1.28% to HK$134.1.
Xu Ran, CEO of JD Group, said that we are happy to start this year with a steady performance in the first quarter. 2024 is a year of implementation, and we have seen that all businesses have achieved tangible results. In particular, our focus on user experience led to strong growth in the number of active users and user engagement in the first quarter.
With peers$Alibaba (BABA.US)$/$BABA-SW (09988.HK)$Similarly, JD has suffered losses for more than a year against the backdrop of a slowdown in global economic growth, especially its competitors$PDD Holdings (PDD.US)$Compete for the consumer market with low-priced products.
Because of this, JD's US stock price has fallen by more than 10% in the past year. Today, due to market optimism about China's economic recovery and confidence in the company's management, JD's US stock price rose 18.62% in May. Since May, Alibaba's US stock price has risen 15.83%, and Pinduoduo's stock price has increased by 14.54%.
From January 1 to May 15 this year, JD repurchased a total of 98.3 million Class A common shares, totaling US$1.3 billion (about 9.4 billion yuan). JD management said in a conference call that they drew attention to JD's three-year stock repurchase plan totaling 3 billion US dollars (about 217 yuan).
The latest quarterly report is expected to help JD fix stock prices, even if it doesn't trigger a debate about whether the relatively low price of Chinese stocks represents a value/value trap. Of the 44 analysts covered by “Barron's,” currently 30 have given a “buy” rating for JD's US stocks. Three months ago, 27 out of 41 analysts gave the stock a “buy” rating.
On May 22, JD will celebrate the 10th anniversary of its listing on the NASDAQ. According to JD, in the past ten years, the company's revenue increased 16 times from 69.3 billion yuan in 2013 before listing to 1.1 trillion yuan in 2023, and net profit (non-GAAP) increased 157 times from 224 million yuan to 35.2 billion yuan.
Editor/jayden