【行业研究报告】京东-Focusing on driving healthy and quality growth

12May2023
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
JD.com(JDUS)
Focusingondrivinghealthyandqualitygrowth
JD.com(JD)reported(11May)1Q23results:revenuewasRMB243.0bn,up
1.4%YoY,1%higherthanbothourforecastandBloombergconsensus.Non-
GAAPnetincomewasRMB7.6bn,aheadofourestimates/consensusat
RMB5.4/5.3bn,andtranslatedintoanon-GAAPnetmarginof3.1%(1Q22:
1.7%),0.9ppaheadofourforecast,drivenbybetter-than-expectedgrossmargin
aidedbybusinesstransitionofsupermarketcategory,andmorecontrolledthan
expectedsalesandmarketingspending.JDannouncedthatcurrentCEOLeiXU
willretirefromhispositionsandCFOSandyXUwilltakeovertheCEOrole.We
expectJDtomaintainitsstrategyondrivinghealthyandqualitygrowth.Our
DCF-basedTPisliftedby3%toUS$62.8,toaccountforbetter-than-expected
marginperformance.Marginperformancein2023islikelybetterthanfeared
drivenbyJD’sstrategytomaintainefficientsalesandmarketingspending.
MaintainBUY.
ElectronicsandhomeapplianceisseeinggradualrecoveryinApril
2023.JD’snetproductrevenuewasRMB195.6bnin1Q23(80.5%oftotal
2023.JD’snetproductrevenuewasRMB195.6bnin1Q23(80.5%oftotal
revenue),down4.3%YoY(4Q22:+1.2%;1Q22:16.6%),amongwhich
generalmerchandiserevenuewasdown8.7%YoYduetobusiness
transition,andelectronicsandhomeappliancerevenuewasdown1.2%
YoY.Managementnotedaslowerthanindustryaverageconsumption
recoverytrendforlarge-ticketsizeitems,buthighlightedanimprovingtrend
inApril.WeforecastJDRetail(JDR)’srevenuetodecline0.6%YoYin2Q23
(improvedfrom-2.4%YoYin1Q23)toRMB240.2bn.
Userstickinessimprovedin1Q23.In1Q23,netservicesrevenuewas
RMB47.4bn,up34.5%YoY(4Q22:40.3%),amongwhichmarketplaceand
advertisingrevenuegrew7.8%YoY,andlogisticsandotherserviceswas
up61.3%YoY.Managementsharedearly-stageresultsofitsbusiness
transitiontoenhanceplatformbusiness:1)JDmainappsawhealthytraffic
growthwithDAUgrowingdoubledigitYoYinMarch;2)thenumberofthird-
partymerchantsrecordedtransactionsaw20%sequentialgrowthin1Q23.
Focusingmoreonqualitygrowthdroveabeatonmargin.GPMwas
14.8%for1Q23,up0.8ppYoY,drivenbymarginexpansionacrossproduct
categories,andincreaseinrevenuecontributionfromservicesbusiness.
JDR’sfulfilledGPM/OPMexpandedby0.95/1.0ppYoYto8.9/4.6%in1Q23.
Fulfilmentexpenseasapercentageofproductrevenueratiowas6.3%in
1Q23(1Q22:6.5%),andmarketingexpensetorevenueratiowas3.3%
(1Q22:3.6%),0.1ppbetterthanourestimates.Overallnon-GAAPOPMwas
3.2%in1Q23(1Q22:1.9%).WeforecastJD’snon-GAAPnetprofitmargin
toexpandto2.9%in2Q23E(2Q22:2.4%),drivenbyGPMexpansionof
JDR,andlossreductionfromnewbusinesses.
Managementchangedoesnotaffectexecutionofbusinessstrategy.
JDwillmaintainitsstrategyinbalancingprofitabilityandscaleexpansion.It
willcontinuouslyenhancesupplychaincapabilities,drivemoreengagement
fromthird-partymerchants,anddiversifyproductofferingstodrivefor
consumerandmerchantbaseexpansionandlong-termdevelopmentof
third-partybusiness.