We believe that the value of JD.com from the current point of view mainly has the following three aspects: 1) there is room for about 300 million growth in the number of users. As of 22Q1 JD.com 's annual active users are 580 million, while Pinduoduo 880 million and BABA 900 million in the same period, JD.com still has sinking user space on the basis of improving the stickiness of the core online shopping crowd; 2) lay out the supply chain in advance without making up for its shortcomings. Since 2007, the company has built its own logistics system with high retail efficiency. At present, it has achieved full-time T+0/T+1/T+N compliance coverage. In the high standardization, high customer order products, the supply chain sets up high barriers, tamp platform value, and steady growth is expected; 3) category expansion and purchase frequency constitute a positive flywheel. The growth rate of daily department store income is faster than 3C home appliances, accounting for nearly 40%, leading to an increase in the proportion of female consumers and an increase in purchase frequency, thus promoting the entry of more businesses. JD.com supermarket (mainly self-operated) introduced more than 370 offline merchants (Walmart Inc, China Resources, Yonghui, etc.), greatly expanded the number of SKU, improved the layout of full-product retail; cooperative luxury goods and new consumer brands, merchants' quality and quantity improved simultaneously.

Channel and supply chain: self-set up barriers to develop the offline home appliance market. With efficient logistics services (JD Logistics, Inc., Debang Express, Dada Nexus Limited to provide full-time distribution services) and good after-sales experience, JD.com accumulated good reputation, while PLUS members retained high customer single users. Self-income is mainly 3C home appliances, and its market share ranks first in all channels. In recent years, a comprehensive layout of offline home appliance market, set up stores in different levels of cities, high-quality line, low-line penetration.

Client: expand sinking and female users, bring new impetus to growth. JD.com successively launched Jingxi (with WeChat Mini Programs as the main position, focusing on low-cost and good goods) and Jingxi (community group purchase), with a strategic focus on a broad sinking market, successfully reversing the bottleneck of declining user growth in the past 18 years. The diversified and rich category structure has harvested a large number of female customers, giving priority to their own consumption, increasing their contribution, and promoting the growth of the platform GMV.

Merchant side: POP platform ecological construction is complete, advertising and logistics services enable merchants. At the advertising level, JD.com partnered with Tencent, Jinri Toutiao, Baidu, Inc., Sohu.com Ltd, Sina and other media to launch the "Beijing X Plan" to set up shopping entrances and advertising resource bits on the off-site platform to absorb massive traffic; in addition, in-site digital marketing platform Jingzhuntong provides a variety of accurate advertising tools At the logistics level, JD Logistics, Inc. has started external services since 2017, the five major product matrices have strong distribution capabilities, and the income of external customers has contributed nearly 60%. The quantity and quality of merchants have been improved, especially attracting more than 250 international brands to enter the luxury sector, including Louis Vuitton, Bvlgari, Dior, Celine, etc., high-end demand has been met.

Investment suggestion: we expect the company to achieve operating income of 1.1 trillion yuan in 2022-2024, an increase of 15.7%, 19.3% and 15.3% over the same period last year. The net profit of Non-GAAP homing is 141, 246, 34.6 billion yuan, and the net interest rate of Non-GAAP is 1.3%, 1.9%, 2.3%, corresponding to Non-GAAP EPS 4.5, 7.9 and 11.1 yuan per share. The segment valuation method is used to value JD.com. JD.com 's retail 1P business is expected to maintain an operating profit margin of 1% mi 2% in the short to medium term, giving the sector a 23-year 15xPE, corresponding to a 23-year market capitalization of HK $358.2 billion, or about HK $320.7 billion in 22 years. The expansion of JD.com 's retail 3P business category has led to user growth and increased purchase frequency, which is assisted by the advance layout of the supply chain system. The ecological value of the POP platform is highlighted, giving this part 23-year 24xPE, corresponding to a market value of HK $748.6 billion, equivalent to a 22-year market value of HK $670.4 billion. JD Logistics, Inc. (excluding income generated by providing supply chain solutions and other services to JD.com Retail) the number of external integrated supply chain customers has increased year by year, and the customer unit price has increased year by year. JD.com Group holds 63.56% of JD Logistics, Inc., corresponding to a market capitalization of HK $25.7 billion, which translates to a 22-year market capitalization of HK $23 billion. To sum up, the company has a 22-year target market capitalization of HK $1.0141 trillion, with a "recommended" rating corresponding to the target price of HK $324.7 per share for the first time.

Risk tips: the epidemic repeatedly exceeded expectations, macroeconomic growth fell short of expectations, Internet regulation became stricter, category expansion was less than expected, and logistics and new business profits improved slowly.