【行业研究报告】京东-Escalating investment to drive for food delivery business expansion

14May2025CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateJD.com(JDUS)EscalatinginvestmenttodriveforfooddeliverybusinessexpansionJD.com(JD)reported(13May)1Q25results:revenuewasRMB301.1bn,up15.8%YoY(1Q24:7.0%；4Q24:13.4%),3/4%aheadofourforecast/Bloombergconsensusestimates.Non-GAAPnetprofitwasRMB12.8bn,up43%YoY,andwas18/23%aheadofourforecast/consensus,drivenbya20%beatonJDRetail’s(JDR)OPaidedbybothbetter-than-expectedrevenuegrowthandGPMexpansion,aswellasmoreoptimizedthanexpectedmarketingspendingamidthebackdropof“NationalSubsidy”.LeveragingsolidearningsgrowthofJDR,JDisescalatingitsinvestmentinthefooddelivery(FD)businesstodrivefornationalexpansion,andittargetsforbetteruserstickinessandmorecross-sellingopportunitiesamonghighqualityuserbaseinthelongtermthroughtheinvestment.WearemorepositiveonJDR’s2025Erevenueandearningsgrowthoutlookpostresults,butthisislikelytobeoutweighedbytheincrementalinvestmentinFDbusiness.Welift2025Erevenueforecastby2%butlowernon-GAAPNPforecastby10%toaccountfortheimpact.OurDCF-basedTPremainsunchangedatUS$55.0perADSasourlong-termforecastremainslargelyunchanged.MaintainBUY.BothvisibilityandsustainabilityofJDR’searningsgrowthwillserveaskeystockpricedriversduringtheinvestmentperiod,inourview.JDRdeliveredrobustrevenueandearningsgrowth.BoostedbyNationalSubsidyandJD’scompetitiveedgeinfirstpartybusinessfor3CNationalSubsidyandJD’scompetitiveedgeinfirstpartybusinessfor3Candhomeappliances,JDRetail(JDR)inkedrevenueofRMB263.8bnin1Q25,up16.3%YoY,5%betterthanconsensus,whileitsOPgrewby37.8%YoYtoRMB12.8bn.OPMofJDRwas4.9%,upby0.8pptsYoY,drivenbyongoingGPMexpansionacrossallofthekeycategories.Byrevenuestream,withinnetproductrevenue,electronicsandhomeappliances(E&HA)revenuewasup17.1%YoY(4Q24:15.8%),boostedbynationalsubsidyprogram.Generalmerchandiserevenueforthequarterwasup14.9%YoY(4Q24:11.1%),thankstosolidrevenuegrowthoffashionandsupermarketcategories.NetservicesrevenuealsosawaccelerationinYoYgrowthin1Q25,amongwhichmarketplaceandadsrevenuewasup15.7%YoY(4Q24:10.8%)drivenbysolidGMVgrowth.WearemorepositiveonJDR’sgrowthoutlookin2025E,withaforecastof11.6%/22.3%YoYgrowthinrevenue/OP(was9.7%/13.9%).StrategicallyalignFDbusinessexpansionwithinstantdelivery.JDpositioneditsFDbusinesstoaddressdemandinthreeaspects:1)users’demandforfoodsafetyandquality;2)merchants’demandforreasonablecommission;and3)riders’demandforbetterprotection.ManagementnotedthatdailyaverageFDordervolumehasalmostapproached20mnon13May,anditscurrentfocusesforFDbusinessare:1)improvinguserandmerchantexperience;2)drivingforbusinessscaleexpansion;and3)drivingforbetterinvestmentROI,whichincludesgrowingnewuserandcustomertraffic,andenhancinguserretentionrateandrepurchaserate,anditslong-termgoalistostrengthenthesynergyeffectandoperationalcapabilityacrossJDecosystem.Updateonshareholderreturn.JDhasrepurchasedatotalof40.4mnADSsforatotalofc.US$1.5bnYTD,whichamountedto2.8%ofshareoutstandingasofend-2024.TheremainingamountunderthesharerepurchaseprogramwasUS$3.5bnandwillbeeffectiveinAugust2027.