1Q26 Financial Performance: JD.com reported revenue of RMB315.7bn for the first quarter of 2026, representing a 4.9% YoY increase, slightly above the Bloomberg consensus. Non-GAAP net profit was RMB7.4bn, a 42% YoY decline due to continued investment in food delivery (FD), but still ahead of the forecast. JD Retail (JDR) contributed significantly, with a 17% YoY increase in operating profit and an expanded operating margin to 5.6%.
Marketplace and Advertising Growth: Marketplace and advertising revenue rose 18.8% YoY, driven by improved advertising efficiency and increased ad load. General merchandise revenue increased 14.9% YoY, while E&HA revenue declined 8.4% YoY.
FD Business Progress: The operating loss from new businesses, primarily FD, narrowed to RMB10.4bn in 1Q26 from RMB14.8bn in 4Q25, with FD losses expected to halve in 2Q26E to RMB6.6bn.
Share Repurchases: JD repurchased approximately 44.5mn Class A ordinary shares in 1Q26 for US$631mn, with US$1.4bn remaining under its share repurchase program valid through Aug 2027.
Forecasts and Outlook
Revenue Growth: JD's revenue is forecasted to grow 6.6% in 2026, with a 14.9% YoY increase in general merchandise and 20.6% in marketplace and advertising. However, price hikes in 3C and home appliance categories could create short-term revenue headwinds.
Earnings Growth: JD Retail is expected to show strong earnings growth, with non-GAAP operating profit projected to increase by 4%–5% in 1H26/2026E. The company maintains its revenue and earnings forecasts for 2026–2028 largely unchanged.
Valuation: The DCF-based target price remains at US$47.5, based on a WACC of 11.8% and a terminal growth rate of 1.0%. This valuation reflects the company's expected future cash flows and growth potential.
Financial Metrics
Revenue: RMB1,395.9bn in 2026E, with a YoY growth of 6.6%.
Gross Profit: RMB236.7bn in 2026E, growing at 12.7% YoY.
Non-GAAP Net Profit: RMB30.8bn in 2026E, with a 14.0% YoY growth.
Operating Margin: JD Retail's operating margin expanded to 5.6% in 1Q26, up 0.7ppt YoY.
Adjusted Net Profit Margin: Increased to 2.2% in 2026E, up 0.6ppt YoY.
Return on Equity (ROE): Expected to reach 10.1% in 2026E, up from 8.4% in 2025A.
Shareholder Returns and Market Performance
Share Repurchase: JD repurchased 44.5mn shares in 1Q26, with a total consideration of US$631mn.
Share Performance: Over the past 12 months, JD US has delivered an absolute return of 2.5% and a relative return of -10.1%.
Current Price: US$31.49, with a target price of US$47.50 and a potential upside of 50.8%.
Risk Factors
Consumption Recovery: Slower-than-expected recovery may impact growth.
Competition: Increased competition could pressure margins and revenue.
FD Investment: More aggressive investment in FD may weigh on earnings growth.
Analyst Recommendations
Rating: Maintain BUY.
Target Price: US$47.50.
Outlook: The company's strong core earnings growth, coupled with improved efficiency in FD, supports the BUY rating despite short-term challenges from price hikes.
