20230310-招银国际-Driving_for_long-term_healthy_growth_7页_1mb

JD.com (JD US) Summary

Core Content

JD.com (JD US) recently reported its 4Q22 financial results, revealing revenue of RMB295.4bn, a 7% year-over-year (YoY) increase, matching both the analyst's forecast and Bloomberg consensus. The non-GAAP net income reached RMB7.7bn, surpassing the estimated RMB5.6/5.5bn, and the non-GAAP net margin increased to 2.6%, up 0.7 percentage points (pp) from the previous quarter. For the full year of 2022, total revenue grew by 10% YoY to RMB1.0tn, with the non-GAAP net margin expanding by 0.9pp to 2.7%.

Main Points

• Revenue Growth:
  • 4Q22: RMB295.4bn (+7% YoY)
  • 2022: RMB1.0tn (+10% YoY)
• Non-GAAP Net Income:
  • 4Q22: RMB7.7bn (+114.8% YoY)
  • 2022: RMB10,380.0mn (+100.8% YoY)
• Non-GAAP Net Margin:
  • 4Q22: 2.6% (up 0.7pp YoY)
  • 2023E: 2.8% (up 0.1pp YoY)
• Subsidy Program Impact:
  • The RMB10bn subsidy program is expected to have a controllable impact on margins.
  • The program aims to enhance user experience by working with suppliers and merchants to offer attractive prices and monitor ROI.
• Proactive Business Adjustments:
  • JD has made proactive adjustments to enhance user experience, which may slow revenue recovery in the short term but support long-term development.
• Forecasted Revenue Trajectory:
  • 1Q23E: Retail revenue is expected to decline by 4.7% YoY, and group revenue to remain flat YoY.

Key Information

• Target Price: US$74.30 (down 5.5% from previous target of US$78.60)
• Analyst Rating: BUY (maintain)
• Current Price: US$46.57
• Market Cap: US$74,069.6mn
• Shareholding Structure:
  • Richard Qiangdong Liu: 13.8%
  • Max Smart Limited: 13.3%
• Share Performance:
  • 1-mth: -15.9%
  • 3-mth: -22.9%
  • 6-mth: -22.3%
• Earnings Summary:
  • Revenue (2023E): RMB1,179.5bn
  • Non-GAAP net profit (2023E): RMB32.4bn
  • Adjusted net profit (2023E): RMB32.4bn
  • EPS (Adjusted) (2023E): RMB20.38
  • P/E (non-GAAP) (2023E): 20.3x

Valuation and Forecasts

• DCF Valuation:
  • Based on a WACC of 11.8% and terminal growth of 2.0%, the target price is US$74.30.
• Revenue Growth Forecasts:
  • 2023E: RMB1,179.5bn (+12.7% YoY)
  • 2024E: RMB1,299.6bn (+10.2% YoY)
  • 2025E: RMB1,410.6bn (+8.5% YoY)
• Gross Margin:
  • 2023E: 14.6%
  • 2024E: 15.0%
  • 2025E: 15.4%
• Non-GAAP Net Margin:
  • 2023E: 2.7%
  • 2024E: 3.3%
  • 2025E: 3.8%

Analyst Certification

• The primary analyst certifies that the views expressed in the report reflect personal opinions and that there is no direct or indirect compensation linked to the views.
• No transactions were made in the stock covered in the report within 30 days prior to its issue, and no such transactions will be made within 3 business days after the issue.

CMBIGM Ratings

• BUY: Potential return of over 15% over next 12 months
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark

Disclaimer

• This report is for informational purposes only and should not be considered as investment advice.
• The information may be subject to change and is not guaranteed for accuracy or completeness.
• CMBIGM is not liable for any loss, damage, or expense incurred from reliance on this information.