京东集团：营收疲软但利润率拐点显现

BuyAsia Forecast Change China Retail/WholesaleTrade Is the worst behind us? Peter Milliken, CFA Research Analyst+852-2203 6190LeoChiang,CFA JDsaw2Q26revenuedecline2.9%toRMB346bn,inlinewithBloomberg consensus.Thatcompares withChina retailsales rising2.0%YoY(excludingauto)and online goods retail sales increasing 2.3%.Non-GAAP net income was,however,up21%YoYtoRMB8.9bn,beatingconsensusby13%.Thiswasachievedby:1)healthy retail margin expansion, with both gross and operating marginshitting recordhighsduringpromotionalseasons,and 2)JD fooddeliverynarrowinglossbymorethanhalfYoY.Orlookingatitanotherway,marketing expensefell25%YoYallowing aRMB5.4bn upturn inoperatingprofit. Research Analyst+852-220-36240 Looking ahead, we think it will be challengingforthe companytoreach its full-yearelectronics-and so dampeningdemand.Wehadalsoflagged this inourpreviewnoteandbelieveinvestorshavepricedthisin.Thesharpsell-offfollowingtheresultsseems tobe triggered bythe increased spend to build out European service,andfrom the slowdown in service revenue and subsequent concerns over theheadroom for further retail margin expansion, but we do not find these overlyconcerning. Thegrowth pressure should be less of a problemfor2H,as the highbase effectgradually fades.Management also noted better trends in July vs.June, andexpectedrevenuetoreturntogrowthin3Q.Meanwhile,supportedbyretailmargingainsandcontinued lossreductionatfooddelivery,groupprofitabilityhasreachedsomethingofaninflectionpointandshouldrecoverconsiderablyfasterthanthetopline.However,weforecast that the group will reach its ex-food delivery profitabilitylevel onlyby2030,giventhe company'songoing commitment inthefield andelevated investments inothernewinitiatives. The long-termtargetfor Retail's high single-digitmargin was reaffirmed during theearningscall,asthecompanyexpects enhanced supply-chain efficiencies,scalebenefits (especially in general merchandise),and expansion of high-margin 3Pservices. JDRetail2Qdrivers Electronicsandhomeappliances:2Qrevenuefell 11.7%YoY,duetothe Retail /Wholesale TradeJD.com price hikes, but it still outperformed wider industry which saw a 13%decline. JD believes its robust supply-chain capabilities help it navigatesuch cycles more effectively,and the same inflation is prompting a shifttohigh-end models, which plays to its strength.General merchandise: Revenue growth moderated to 5.5%, dragged by a newgoldtaximpactingfashionsales,aswellasahighbasefromtheprioryearwhen national subsidies boostedhomegoods sales and food deliveryservices drove additional traffic.Nonetheless,performance remainedstrong in key subcategories, with supermarket -the largest within thisdivision - delivering near-double-digit YoY growth, and healthcare andindustrialproductssustainingsoliddouble-digitgrowth.Robust user momentum:Both quarterly active customers and annual active customers grew at double digits YoY during the quarter, andpurchasing users reached a new high during"618". Since launching a yearago, JDhas graduallybuilt its presence in food delivery and improveduniteconomicsas scalingupallowedlowerfulfillment costsandbetteroperating efficiency.In2Q,the overall"New Businesses"unit narrowed operatinglosstoRMB9.9bn,andweestimatethelossfromfooddeliverywasRMB6.6bn.Theexpiration oftheprevious commission-free policy would have contributed to theimprovement,andJDplanstocontinueenhancingitsrevenueanduniteconomics.Managementhighlightedthisunit's synergieswith coreretail,onattractingtraffic,offering last-mile infrastructure. JD's Europeane-commerce platform,Joybuywas launched in March,and sawrevenue double in two quarters alongside rising user retention. It operates on asimilarbusinessmodeltoJD'scoreretail,offeringpremiumbrandedproductswithlocalized supply chain,door-to-door, same-dayand next-daydeliveryacrossmajorEuropean cities backed by a logistics build out.During the quarter, it launched"Summer Black Friday"campaign,which drove surging sales for quality homeappliancesandtechnologyproducts. Shareholderreturn JDrepurchasedatotalof69.9mnordinaryshares(equivalentto34.9mnADSs)forUSs1bnin1H26,representing2.5%ofsharesoutstandingasofyear-end2025.TheremainingbalanceunderthesharerepurchaseprogramisUss1.Obn,validthroughAugust2027. Valuationandrisks We have slightly adjusted ourestimates to reflectthe results and business trend.OurDCF-derivedTPremainsat USD40,representinga2026EP/Eof12x,whichisstill low vs. its history and vs.global comps (See Figure 13 for detailed DCF model).RetainBUY. Risks:(1)PressureontheeCommercebusinessfromweakdemandandstrongercompetition,(2)a slower-than-expected recovery of growth in user activity,(3)margin pressurefromahighermix oflow-tiermarkets andlow-ASP orders,and (4)a longer-than-expected investment period fornew initiatives. Retail/WholesaleTradeJD.com Figure1:JD2Q26resultstable Retail/WholesaleTradeJD.com Retail /Wholesale TradeJD.com Figure7:Nationaltrade-inscheme2025vs2026 The 2026 trade-in scheme is more restrictive than