Investment Rating - The report assigns a Neutral rating to JD (JD US) [2] Core Views - JD's Q4 2023 performance exceeded expectations, with revenue surpassing both the report's and Bloomberg consensus estimates by 2% and adjusted net profit exceeding expectations by 28%/16% [33] - Total revenue grew 4% YoY, with JD Retail revenue increasing by 3% [33] - Adjusted net profit reached RMB 8.4 billion, with a net profit margin of 2.7%, up 10 basis points YoY, driven by platform ecosystem development and supply chain advantages [33] - Retail operating profit margin declined by 40 basis points to 2.6% due to adjustments in free shipping thresholds [33] - For 2023, total revenue grew 4% YoY, with a net profit margin of 3.2%, up 50 basis points YoY [33] - Management reiterated the 2024 target of retail GMV and revenue growth exceeding the social retail growth rate (6%), with group profit and retail operating profit expected to at least remain flat [34] - The report expects high single-digit growth in the large supermarket category in 2024, following the completion of business adjustments [34] - Retail profit margin is expected to decline by 50 basis points to 3.75% due to lower shipping thresholds, employee salary increases, and Spring Festival Gala investments [34] - The report raised the 2024 revenue forecast by 2% and slightly adjusted group net profit, maintaining a 10x 2024 retail P/E valuation and adjusting the target price to USD 28/HKD 109 (JD US/9618 HK, previously USD 30/HKD 115) [34] - The stock price rose 16% post-earnings, reflecting better-than-expected results and shareholder returns, but the report maintains a Neutral rating due to long-term industry competition and limited retail profit growth potential [34] Financial Performance Q4 2023 Highlights - Low-tier city users accelerated growth, with order volume/consumption frequency growing at double-digit rates, faster than the overall user base [1] - Product revenue increased 4% YoY, with electronics and home appliances growing 6%, exceeding the expected 1%, and continuing to gain market share [1] - Non-electronics categories turned positive, with supermarket categories bottoming out and home decor, sports, and apparel achieving double-digit growth [1] - Advertising and commission revenue decreased 5% YoY (excluding Dada impact), with commission revenue declining double digits due to new merchant incentives and category-specific commission reductions [1] - The company distributed USD 1.2 billion in cash dividends (dividend yield of 3.6%) and approved a new USD 3 billion share repurchase plan [1] Financial Metrics - Revenue for 2023 reached RMB 1,084.7 billion, up 3.7% YoY, with net profit of RMB 40.4 billion, up 43.8% YoY [11] - EPS for 2023 was RMB 25.50, up 43.8% YoY [11] - Adjusted EBITDA margin for 2023 was 4.4%, with an adjusted net profit margin of 3.7% [11] - For 2024E, revenue is expected to grow 8.5% YoY to RMB 1,176.9 billion, with net profit expected to decline 9.6% YoY to RMB 36.5 billion [11] - The P/E ratio for 2024E is 7.8x, with a P/B ratio of 0.99x [11] Q4 2023 Detailed Performance - Total revenue grew 4% YoY to RMB 306.1 billion, exceeding the Bloomberg consensus estimate of RMB 299.9 billion [14] - Product revenue grew 4% YoY to RMB 246.5 billion, with electronics revenue up 6% YoY to RMB 150.4 billion [14] - Service revenue grew 3% YoY to RMB 59.6 billion, with advertising revenue declining 4% YoY to RMB 23.6 billion [14] - Adjusted operating profit declined 30% QoQ but grew 7% YoY to RMB 7.8 billion, with an adjusted operating profit margin of 2.5% [14] - Adjusted net profit attributable to ordinary shareholders grew 10% YoY to RMB 8.4 billion, exceeding the report's expectation by 27% [14] Industry and Competitive Landscape - The report highlights JD's focus on user growth and market share expansion in 2024, with potential fluctuations in profit margins [10] - The company's strategy revolves around enhancing user experience and increasing market share, which may lead to margin compression [34] - The report notes that JD's performance in low-tier cities and its ability to gain market share in electronics and home appliances are key strengths [1][14] - However, the competitive landscape remains intense, with long-term retail profit growth potential under scrutiny [34]
4季度业绩胜预期；2024年围绕用户增长和提升市占，利润率或有波动