Core ideas:
The main results are as follows: 1) Omni-channel business is the top priority of the company's development, and its development is still in its early stage, and it is expected to maintain a trend higher than the growth of the retail market: in recent years, the format of traditional retail has been continuously improved with the change of consumers' habits. In particular, the super category presents the characteristics of online and offline omni-channel, and consumers' information for various categories tends to be full-touch. At present, JD.com 's omni-channel strategy has begun to bear fruit, with omni-channel business accounting for about 10% of group revenue and group GMV. In particular, the sustained and rapid development of home and real-time distribution business not only enhances the consumer experience and brings more efficient and convenient services in the same city, but also deeply connects the offline physical enterprises, bringing the increment of users and income for the cooperative brands and merchants.
2) the new business is more focused, and the nodes that strategically abandon some loss-making urban businesses or make JD.com 's new business UE regular come ahead of schedule: for JD.com, the primary goal in 2022 is to ensure sustainable development and promote the healthy growth of profits and cash flow. So JD.com adjusted the new business, reduced to the current two provinces and cities, and optimized the business with little hope of short-term profit and weak liquidity. At the same time, in terms of the scale of investment and the control of costs and expenses, JD.com 's procurement discipline is more stringent. On the one hand, it achieves local supply, on the other hand, it increases the density of orders, reduces costs and increases efficiency. To sum up, we expect revenue from the new business to grow by 7% year-on-year to 7.5 billion yuan.
Operating profit margin narrowed month-on-month to-31.4%.
3) 3P business is more affected by the epidemic than 1P business, and its growth rate slows significantly: because most 3P businesses are long-tailed merchants and have weak performance ability, such as clothing merchants, the epidemic has led to the destruction of the supply chain at the supply side. at the same time, the demand for residential users is weaker, the inventory backlog of merchants in spring is more serious, and clothing production in summer is also in a state of stagnation. If businesses have a demand for autumn clothes, they need to start stock preparation and other preparations in the second quarter, so the impact of the epidemic will not only extend to April and May, but will even lag some industries. At the same time, a large part of the revenue of 3P business comes from advertising, which is a barometer of the market. Merchants will reduce advertising in the face of sales uncertainty, so the growth rate of 3P business as a whole will slow down significantly in the second quarter. However, because there are more effect advertisements on JD.com platform, the vertical comparison of competitors in the same industry will be less affected. To sum up, we expect revenue from Q2 platforms and advertising services to reach about 20.9 billion in 2022, an increase of 9.8% over the same period last year.
4) in terms of users, JD.com pays more attention to user quality and maintains a healthy growth pace: at present, in the environment of e-commerce users entering the bottleneck, the cost of customer acquisition is too high, and the input-output ratio is not high. In the past two years (2019-2021), JD.com accumulated about 200 million new users. For these new users, JD.com 's strategy will pay more attention to the maintenance of new users and improve the purchase frequency and ARPU value of single users. However, JD.com did not give up user growth, and JD.com is expected to maintain a healthy and conservative pace in customer acquisition and move forward steadily.
Profit forecast and investment advice: we continue to be optimistic about the long-term health and sustainability of the company's overall business. Taking into account the impact of the epidemic on business in some parts of the country, as well as macroeconomic uncertainty, we estimate the operating income of JD.com Group 2022Q2 to be 261.4 billion yuan. Due to the damage to the supply chain caused by repeated outbreaks and the reduction of advertising in some industries in the face of uncertainty, we have slightly reduced our revenue to 1.0645 trillion yuan in 2022 (the previous value is 1.0754 trillion yuan). 2022Q2's NON-GAAP net profit is 4.4 billion yuan. Due to the slowdown in the growth of the 3P business, we slightly reduced the net profit of NON-GAAP in 2022 to 18.4 billion yuan (the previous value was 18.7 billion yuan). We maintain the target company's 2022 target market capitalization of HK $826 billion. Maintain a "buy" rating.
Risk reminder events: macroeconomic growth is declining, market competition is intensified, industry growth is not as expected, policy risks, realization rate and gross profit margin are lower than expected, operating funds are insufficient, profits are not up to expectations, and the information and data used in the research and report are not updated in a timely manner.