Investment Rating - The report maintains a "Recommended" rating for JD Group with a target price of HKD 187 per share [1]. Core Views - JD Group's Q2 2024 results exceeded expectations, showcasing strong profitability with a significant year-on-year increase in Non-GAAP net profit by 69% to CNY 14.46 billion [1]. - The company is expected to benefit from the "trade-in" policy in the 3C electronics category, which has shown nearly 100% growth in order volume during the 618 shopping festival [1]. - Despite a slight adjustment in revenue forecasts due to weak consumer confidence, the profit outlook has been upgraded, reflecting improved cost management and profitability [1]. Summary by Sections Financial Performance - In Q2 2024, JD Group achieved revenue of CNY 291.4 billion, a year-on-year increase of 1.2%. Operating profit reached CNY 10.5 billion, up 27% year-on-year, with an operating margin of 3.6% [1]. - The Non-GAAP net profit for the quarter was CNY 14.46 billion, with a Non-GAAP net profit margin of 5.0%, reflecting a year-on-year increase of 2.0 percentage points [1]. - The retail segment reported an operating profit of CNY 10.11 billion, with a margin of 3.9%, while logistics achieved an operating profit of CNY 2.18 billion, with a margin of 4.9% [1]. Revenue Breakdown - JD Group's product revenue was CNY 233.91 billion, remaining flat year-on-year. The 3C electronics category saw a revenue decline of 4.6% to CNY 145.06 billion, attributed to high base effects and disciplined promotional spending [1]. - Daily necessities revenue grew by 8.7% to CNY 88.85 billion, with significant growth in the supermarket category [1]. - Service revenue increased by 6.3% to CNY 57.49 billion, with platform and advertising services growing by 4.1% and logistics services by 7.9% [1]. Shareholder Returns - JD Group has continued its share buyback program, repurchasing 220 million Class A ordinary shares, equivalent to 110 million American Depositary Shares, totaling USD 3.3 billion, representing 7.1% of its circulating shares as of June 30, 2024 [1]. Future Outlook - Revenue forecasts for 2024-2026 have been slightly adjusted to CNY 1.14 trillion, CNY 1.21 trillion, and CNY 1.28 trillion, respectively, while Non-GAAP net profit estimates have been raised to CNY 44.2 billion, CNY 45.5 billion, and CNY 51.5 billion for the same period [1].
京东集团-SW：2024年二季报点评：利润大超预期，盈利能力优异