Revenue and profit are expected to grow steadily in 24Q3. We expect the company to achieve revenue of 259.6 billion yuan (+4.8%) in 24Q3 and achieve adjusted net profit of 11 billion yuan (+3.2%) to mother, continuing the steady recovery trend.

GMV is expected to grow by a single digit, increasing investment in merchant users. We expect Q3's GMV to grow by a high single digit and outperform the club's zero market share, and the 3P growth rate is faster than 1P. With increased investment from the platform, DAU is expected to grow by more than 20%, with double-digit growth for active merchants.

Product revenue: Electricity changed to positive, and the daily 100 maintained a high single-digit growth rate. It is expected that 24Q3 will achieve product revenue of 203.5 billion yuan (+4.2%). See: 1) Charging category: After getting rid of the impact of a high base, demand for household appliances increased in hot weather, and the growth rate of charged Q3 was successfully corrected. Furthermore, the trade-in policy continued to accelerate in September, and we expect 24Q3 live revenue of 122.8 billion yuan (+2.9%). 2) Daily 100 category: Japan 100 continued its high single-digit growth rate compared to steady growth. Among them, the supermarket category continued to maintain a double-digit growth rate. We expect daily revenue of 80.7 billion yuan (+6.2%) in 24Q3. Service revenue of 56.1 billion yuan (+7.1%) is expected in 24Q3. Benefiting from the acceleration of the 3P business, we expect the commission growth rate to be positive and advertising to continue to rise close to the GMV growth rate.

Segment profit: 1) JD Retail: We expect 24Q3 to achieve revenue of 222.9 billion yuan (+5.1%); operating profit of 11.1 billion yuan (+0.5%), profit margin 4.96%, a year-on-year decrease of 0.23pct. Revenue is benefiting from GMV's continued rapid growth compounded by an accelerated gradual recovery in electrification. 2) JD Logistics: We expect JD Logistics to achieve revenue of 44.3 billion yuan (+6.4%) in 24Q3.

The trade-in policy dividends are obvious, and Double Eleven extends the time limit. Since the trade-in subsidy policy was officially released at the end of August, it has achieved online coverage in 16 provinces across the country. JD designated e-commerce platforms for the policy to accept policy dividends, and the charging growth rate has accelerated markedly since September. It is expected that there will still be significant incremental releases in Q4 as the number of provinces covered online increases. Furthermore, JD Double 11 started 10 days early this year, and it can be expected that the cycle will be extended and combined with discounts to increase the speed of Double 11.

We adjusted our profit forecast to forecast revenue of 1134.4/1208.7/1284.7 billion yuan for 24-26 (the original 24-26 forecast was 1141/1204.2/1279.8 billion yuan, due to increased revenue growth due to trade-in policies and Double Eleven investment), and adjusted net profit to mother was 41.8/43.1/44.7 billion yuan (the original 24-26 forecast was 39.2/42.2/44 billion yuan. Profit increased simultaneously due to increased revenue ). Referring to comparable companies, the JD retail business was maintained at 11xPE in 2024. The segmental valuation calculated that the company's market value was 540.2 billion yuan, corresponding to a share price of HK$185.5 (RMB to HKD exchange rate of 1.09), maintaining a “buy” rating.

Risk warning: Policy effects fall short of expectations, industry competition intensifies, and industry regulations are becoming stricter.