Earnings First Take: JD (9618 HK / JD US) – 1Q22 results above market expectations
- Revenue increased by 18% y-o-y to Rmb240bn
- Operating loss of Rmb2.4bn in new businesses was lower than expected, due to tightened control on investments
- Net-GAAP net profit increased by 1.6% to Rmb4bn, above market expectations
- Expect positive share price reaction
What’s New
– JD (9618 HK) announced its 1Q22 results on 17 May after HK market close.
– Revenue increased by 18% y-o-y to Rmb240bn, slightly above market expectations.
– Net product sales increased by 16% to Rmb204bn; net services (marketplace and logistics) grew by 26% to Rmb35bn.
– Segment-wise, JD retail, JD logistics and new businesses revenue increased by 17%, 22% and 12% respectively.
– Annual active customer accounts increased by 16% y-o-y to 580.5m by end of Mar 2022.
– Net-GAAP net profit increased by 1.6% to Rmb4bn, above market expectations of Rmb2bn, partly due to tightened control on expenses and investment in new initiatives. The operating loss in new businesses was Rmb2.4bn, vs. 4Q21’s Rmb3.2bn.
Our View:
– We expect share price to react positively.
– Given the lockdown in various cities in the past few months, we expect slower growth in 2Q22.
– Management shared that merchants are more aggressive towards 618 festival. We expect a stronger recovery in 2H22, when the supply chain and fulfillment capacity returning to normal.
– We currently rate BUY on the counter with TP of HK$419/ US$107.