The company released FY3Q24 results. The Q3 performance was outstanding, and both revenue and profit exceeded expectations. 24Q3 achieved operating income of 260.39 billion yuan (yoy +5.1%), slightly exceeding Bloomberg's agreed expectations, while non-GAAP net profit of 13.17 billion yuan (yoy +23.9%) surpassed Bloomberg's consistent expectations.

Revenue by business: 1. Commodity revenue: 24Q3 achieved commodity revenue of 204.61 billion yuan (yoy +4.8%) 1) Electricity: Beneficiary countries corrected their growth rate. 24Q3 achieved revenue of 122.56 billion yuan (yoy +2.7%). The company benefited significantly after the implementation of the home appliance trade-in policy at the end of August, compounded by the successful correction of the Q3 charging growth rate under last year's low base.

2) Daily 100: Continued high growth in potential energy. 24Q3 achieved revenue of 82.05 billion yuan (yoy +8.0%), with high single-digit growth for two consecutive quarters. Among them, supermarkets and clothing categories maintained a double-digit growth rate. 3) Users: Continuously increase investment in user experience and user mentality, and maintain double-digit growth in the number of quarterly active users and user purchase frequency for three consecutive quarters. 2. Service revenue: 24Q3 achieved service revenue of 55.77 billion yuan (yoy +6.5%) 1) Platform: 24Q3 achieved revenue of 20.76 billion yuan (yoy +6.3%), 3P merchant transaction users increased by more than 20% year-on-year. Increased transaction volume led to a correction in commission revenue and a double-digit increase in advertising revenue. 2) Logistics and other income:

24Q3 achieved revenue of 35.01 billion yuan (yoy +6.5%)

Segment situation: 1) JD Retail: 24Q3 achieved revenue of 224.99 billion yuan (yoy +6.1%) and operating profit of 11.61 billion yuan (yoy +5.5%), benefiting from high growth in the home appliance 3C and supermarket categories in Q3. We expect that as the coverage area of the national subsidy policy expands and the superposition of subsidies deepens into the minds of users, Q4 Home Appliance 3C will still maintain a high level of prosperity. According to official data from JD, sales in electrified categories such as 3C digital and home appliances reached new highs during the Double Eleven period. Turnover, order volume, and number of users who placed orders maintained double-digit growth, and the Q4 results of the big boost combined with the national supplement dividend can be expected. 2) JD Logistics: 24Q3 achieved revenue of 44.4 billion yuan (yoy +6.6%) and operating profit of 2.09 billion yuan (yoy +624.3%), which greatly exceeded expectations. Increased scale effects combined with supply chain optimization significantly increased profitability.

We adjusted our profit forecast and forecast revenue for 2024-2026 to be 1138.5/1209.8/1287.8 billion yuan (the original 2024-2026 forecast was 1134.4/1208.7/1284.7 billion yuan, due to increased revenue growth due to trade-in policies and Double Eleven investments), and adjusted net profit to mother was 42.1/47.2/50.7 billion yuan (the original 2024-2026 forecast was 41.8/43.1/44.7 (Billions of yuan, increased profit margins due to increased share of high-margin business). Referring to comparable companies, maintain JD's retail business at 11xPE in 2024. The segmental valuation calculated that the company's market value was $525 billion, corresponding to a share price of HK$178.4 (RMB to HKD exchange rate of 1.08), maintaining a “buy” rating.

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