Investment Rating - The report maintains a "Buy" rating for JD Group-SW (09618) with a target price of 112.4 HKD [5] Core Views - JD Group's Q2 2024 performance showed significant improvement in profitability, with Non-GAAP net profit reaching 14.5 billion CNY, a 69% YoY increase, and Non-GAAP net profit margin reaching 5%, a 2.0pct YoY improvement [1] - The company's focus on user experience and supply chain capabilities is paying off, with active users and shopping frequency showing double-digit growth [1] - JD Retail's revenue grew 1.5% YoY to 257.1 billion CNY, exceeding market expectations, with daily necessities category growing 8.7% YoY, outperforming the industry average [2] - JD Logistics' revenue grew 7.7% YoY to 44.2 billion CNY, surpassing market expectations, with global supply chain infrastructure assets reaching 156 billion CNY, an 11% YoY increase [3] Financial Performance - Q2 2024 revenue reached 291.4 billion CNY, a 1.2% YoY increase, with service revenue growing 6.3% YoY to 57.5 billion CNY [1] - Operating profit for JD Retail reached 10.108 billion CNY, a 3.9% YoY increase, while JD Logistics' operating profit reached 2.183 billion CNY, significantly higher than the market expectation of 909 million CNY [2][3] - The company has been actively returning value to shareholders, repurchasing 68 million ADS shares worth 2.1 billion USD, representing 4.5% of outstanding shares as of March 31, 2024 [1] Business Segments - JD Retail's electronics and home appliances category revenue declined 4.6% YoY to 145.061 billion CNY, but the company is expected to regain market share through trade-in policies [2] - The daily necessities category grew 8.7% YoY to 88.8 billion CNY, with the supermarket category showing double-digit GMV growth, becoming a key growth driver [2] - JD Logistics maintains a global leading position in supply chain, with nearly 100 bonded, direct mail, and overseas warehouses worldwide, offering 3-day delivery to major European and American countries [3] Strategic Initiatives - JD is focusing on improving user experience through initiatives like "Everyday Low Prices" and investing over 3 billion CNY in beauty category subsidies [2] - The company is optimizing its merchant ecosystem, with a 46% QoQ increase in new third-party merchants in Q2 2024, supported by AI-powered tools that have improved operational efficiency by over 90% for 140,000 merchants [2] - JD is leveraging its global supply chain network to support Chinese brands' overseas expansion, with external integrated supply chain customers expected to grow steadily [3] Future Outlook - The report forecasts JD's 2024-2026 revenue at 1,151/1,254.9/1,318.3 billion CNY, with YoY growth rates of 6.1%/9.0%/5.1% [3] - Non-GAAP net profit attributable to shareholders is expected to be 47.5/50.6/51.9 billion CNY for 2024-2026, revised upwards from previous estimates [3] - The company's core electronics category is expected to continue gaining market share, while the supermarket category is expected to return to healthy growth [3]
京东集团-SW：24Q2业绩点评：盈利端改善明显，坚持用户体验后劲显现