Investment Rating - The report maintains a Buy rating for the company with a target price of $40/155 HKD, based on a 13x forward P/E multiple for JD Retail in 2024 [2][4] Core Views - The company's Q2 2024 revenue is expected to grow 1% YoY to RMB 291.4 billion, below the Bloomberg consensus of RMB 306 billion, with a downward revision of 5 percentage points in growth expectations [1] - Adjusted net profit is projected to increase 15% YoY to RMB 9.8 billion, 13% higher than previous expectations, driven by improved gross margins due to changes in product mix, lower procurement costs, and reduced air conditioner subsidies [1] - The adjusted net profit margin is expected to improve by 40 basis points YoY to 3.4% [1] - The company's active buyers and purchase frequency showed double-digit growth in Q2, partially offset by a decline in average order value due to changes in product mix and low-price strategies [2] - The company plans to continue investing in low-price strategies, with full-year revenue growth expectations unchanged, but may increase investments in the second half of the year to drive revenue growth while ensuring ROI [2] - The 2024 revenue forecast has been revised downward by 2%, primarily due to the impact of electronics categories, while the adjusted net profit is expected to grow 10% YoY [2] Operational Data - The company's user experience NPS continued to improve in Q2, supported by ecosystem development and low-price strategies [2] - During the 618 shopping festival, daily active buyers also showed double-digit growth [2] - The electronics category is expected to decline by 5% YoY in Q2, mainly due to a high base effect from air conditioner sales last year, weak PC industry demand, and growth in communication equipment [28] - The daily necessities category is expected to grow 9% YoY, driven by strong performance in supermarkets, partially offset by pressure in home and furniture categories [28] - The Q2 GMV is expected to grow at a low single-digit rate, with positive growth during the 618 period, slightly higher than retail revenue growth [28] Valuation and Financials - The company's 2024E revenue is projected at RMB 1.139 trillion, with a 5% YoY growth, while adjusted net profit is expected to reach RMB 38.6 billion, a 10.4% YoY increase [15] - The 2024E EPS is forecasted at RMB 24.56, with a P/E ratio of 8.5x [15] - The gross margin is expected to improve to 15.3% in 2024E, up from 14.7% in 2023, driven by better product mix and cost control [15] - The adjusted EBITDA margin is projected to increase to 4.4% in 2024E, up from 3.9% in 2023 [15] Industry and Market Context - The company's valuation is considered to be at the bottom, with potential for healthy profit growth, continued shareholder returns, and benefits from new advertising products like Quanzhan Tui [2] - The electronics category, which accounts for 10% of the electronics segment and 30% of the home appliance segment, is expected to see a double-digit decline in air conditioner sales in Q2 [28] - The company expects Q3 revenue growth to recover compared to Q2, as it returns to a normal comparable base [28]
京东：预计带电品类下滑导致2季度收入下调，但利润有望增双位数