Short-term core categories are under pressure, but supply chain and logistics cost reduction and efficiency release profits. The short-term performance of the electronics and home appliance category remains weak, but procurement costs, logistics efficiency improvements, and management expenses are strictly controlled. We raised the company's 2024-2026 non-GAAP net profit forecast to 41.8/45.2/48.8 billion yuan (previous value: 36.2/41/45.7 billion yuan), corresponding to a year-on-year growth rate of 19.1%/8.1%/7.9%, corresponding to an adjusted diluted EPS 13.1 /14.2/15.3 yuan. The current stock price of 112.4 HKD corresponds to 7.9/7.3/6.8 times PE in 2024-2026. Subsequent share recovery, improved platform ecology, macro-consumption recovery, steady performance will meet expectations, and valuation repair will be maintained.
2024Q2 revenue was basically in line with expectations, with gross margin and logistics and new business losses driving profit up 1.2% year-on-year, which was basically in line with Bloomberg's agreed expectations; non-GAAP net profit of 14.46 billion yuan, up 69% year on year, significantly higher than Bloomberg's agreed expectations (up 13.2% year over year), due to better-than-expected gross margin performance and loss reduction in JD Logistics and new business. On the revenue side, (1) product sales revenue was basically flat year on year, with revenue from core electronics and home appliances falling 4.6% year on year; (2) service revenue increased 6.3% year on year in 2024Q2, of which platform and advertising services increased 4.1% year on year. The increase in month-on-month growth was mainly driven by 3P merchants; logistics and other revenue increased 7.9% year over year. Profit side:
The profit margin of JD's retail operation increased by 0.7 pct to 3.9% year on year, mainly due to increased gross margin and cost reduction and efficiency, and increased investment in marketing and user experience; JD Logistics's cost reduction and efficiency led to continuous improvement in profit margins, and operating profit margin increased 3.7 pct year on year.
The growth of the core charging category is under pressure, and the supermarket category is growing faster to stabilize its overall share. The supermarket category is under pressure, and the supermarket category is growing faster, thus driving the company to strive for GMV year-on-year growth to exceed social zero in 2024; increase user experience, merchant subsidies and marketing investment, but the supply chain advantage is stable, the platform has strong bargaining power, and procurement costs are still expected to decrease. In the future, supply chain efficiency and gross margin will continue to improve. R&D and management expenses are strictly controlled, and there is still room for improvement in medium- to long-term profit margins. rate. The company approved a $3 billion share repurchase plan in March 2024. As of June 30, 2024, the company has repurchased a total of about $2.6 billion, and the remaining amount is about $0.4 billion.
Risk warning: Increased industry competition, macroeconomic performance falling short of expectations, business adjustments falling short of expectations, regulatory changes.