20230512-招银国际-Focusing_on_driving_healthy_and_quality_growth_6页_1mb

JD.com (JD US) Financial Report Summary

Q1 2023 Performance

• Revenue: RMB 243.0 billion, up 1.4% YoY, exceeding both the analyst's and Bloomberg consensus forecasts.
• Non-GAAP Net Income: RMB 7.6 billion, better than estimates of RMB 5.4 billion, leading to a non-GAAP net margin of 3.1% (up 0.9pp YoY).
• Gross Margin: Improved to 14.8%, driven by better-than-expected contributions from services business and controlled spending.

Management Changes

• CEO Lei XU retiring, and CFO Sandy XU set to take over as CEO, with no expected impact on business strategy execution.

Business Updates

• Electronics and home appliance revenue declined 1.2% YoY, but overall product margin expansion contributed to stronger performance.
• User stickiness increased, with net services revenue up 34.5% YoY, supported by growth in marketplace and logistics services.
• JDR fulfilled GPM and OPM expanded by 0.95pp and 1.0pp respectively to 8.9% and 4.6% in Q1 2023.

Valuation

• Target Price: US$62.8, up 76.3% from current price of US$35.62, based on DCF model with WACC of 11.8% and terminal growth of 2.0%.
• Rating: BUY, reflecting potential for margin expansion and improved performance.

Outlook

• Forecasted revenue growth for 2023E at 10.0% YoY; non-GAAP net margin expected to expand to 2.9% in 2Q23E.
• Strategy emphasis on driving quality growth, maintaining balance between profitability and scale.