Citi released a Research Report indicating that JD.com (09618) had a net income of 28.22 billion yuan in 2022, with diluted EPS of 17.744 yuan, an EPS growth rate of 64.7%; in 2023, the net income is expected to be 35.2 billion yuan, with EPS at 22.205 yuan, a growth rate of 25.1%; in 2024, the projected net income is 44.242 billion yuan, with EPS at 28.785 yuan, a growth rate of 29.6%; in 2025, the estimated net income is 47.283 billion yuan, with EPS at 31.205 yuan, a growth rate of 8.4%; and in 2026, the projected net income is 52.146 billion yuan, with EPS at 34.074 yuan, a growth rate of 9.2%. Citi believes that JD.com's continuation of the trade-in program in 2025 is likely to drive unexpected growth in its total commodity transaction volume (GMV) and revenue in the first half of the year, exceeding general market expectations.
The bank stated that in the e-commerce Industry, competition is fierce, with companies constantly vying for market share. JD.com, with its strong supply chain and omni-channel strategy, has advantages in businesses like the trade-in program, but also faces risks such as intensified competition in e-commerce and online-to-offline (O2O) integration, significant investments in logistics and overseas businesses potentially impacting profit margins, uncertain profit margin trends and initial profit difficulties, as well as the impact of a further slowdown in China's economy on consumer spending.
The bank values JD.com based on a projected PE of 12 times for its retail business in 2025, in addition to its equity value in JD Technology, JD HEALTH, JD Logistics, JD Property, JD Industry, Dada, and considering certain discount factors, estimating a 49.0% ROI for JD.com with a dividend yield of 1.5%, yielding a total return of 50.5%, and a Market Cap of 49.616 billion USD. At the same time, it initiates a 90-day observation for upward catalysts, expecting JD.com to benefit from the continuation of the trade-in program, driving the stock price up, giving JD.com a Target Price of 51 USD, maintaining a 'Buy' rating.