20230717-招银国际-Driving_for_quality_growth_remains_key_theme_5页_1mb

JD.com, Inc. (JD US) Report Summary

Analyst Recommendation

• Maintains BUY rating.
• Lifts target price to US$63.4 (previously US$62.8).

Price-to-Earnings (P/E) Ratio

• Estimated 2023E non-GAAP P/E ratio is 20.3x.

Key Points & Outlook

1. Revenue & Earnings Projections:

   • JDR (JD Retail) second-quarter 2023E revenue growth is expected to be 2% YoY (previously -1%), driven by better-than-expected GMV growth (7% YoY) from both first-party and third-party businesses.
   • Full-year 2023 revenue growth forecast is lifted to 2% YoY (previously 1%).
   • Non-GAAP net income for 2Q23E expected to be RMB8.2bn, likely 8% better than consensus estimates.
   • Non-GAAP net profit for 2023E forecast lifted by 4.9% to RMB34.4bn, resulting in a 3.1% non-GAAP net margin.

2. Growth Strategy:

   • Maintains focus on quality growth. Investment in supply chain is prioritized before significant spending on new user acquisition.
   • Strong performance observed in the 618 shopping festival and summer season.
   • Bolstered by the improving third-party business operating environment and material GMV growth from first-party segment.

3. Valuation:

   • New DCF-based Target Price is US$63.4.
   • Valuation uses a WACC of 11.8% and a terminal growth rate of 2.0%.
   • Compares the company's attractive 3.1% expected net margin to the group's average EV/LBEA ratio.

Stock Performance & Metrics (Relative)

• 1-month absolute return: -1.5%, relative return (vs. benchmark): -4.0%.
• Strong underperformance compared to its broad market benchmark this year.

Analyst Certification & Disclosure

As detailed in the main report.