To The Moon

$JD.com(JD)$ will be releasing their Q4 2024 quarterly earnings result on 06 March 2025 before the market open.

JD revenue have a revenue of $45.96 billion, indicating a 6.61% upward movement from the same quarter last year. The earnings per share is predicted to come in at 85 cents which indicate a 20% growth compared to the same period last year.

JD.com (JD) Last Positive Earnings Call Saw A 17.40% Change Since

JD.com investors saw a 17.40% change in the share price since the last positive earnings call on 14 Nov 2024.

JD.com showcased strong revenue growth across key segments, increased profitability, and successful user growth initiatives, despite challenges in new business revenue and matching supply with demand under the trade-in program. The company's strategic investments and share repurchase programs reflect a positive outlook.

JD.com (JD) Guidance On Continued Growth Momentum

During JD.com's Q3 2024 earnings call, the company provided positive guidance with several key metrics highlighting their growth trajectory. The top line growth for Q3 accelerated by 5% year-on-year, reaching RMB 260 billion. In particular, the general merchandise category saw an 8% revenue increase, while the supermarket category delivered double-digit growth. The electronics and home appliances category also rebounded with a 3% year-on-year growth, supported by China's national trade-in program. JD Logistics demonstrated significant efficiency improvements, resulting in a 624% year-on-year increase in non-GAAP operating income and a 400 bps increase in operating margin to 4.7%.

The company's non-GAAP net profit grew by 24% year-on-year, with a net margin of 5.1%, and they completed a USD 3.65 billion share repurchase program, reflecting their commitment to shareholder returns. Looking ahead, JD.com remains optimistic about continuing its growth momentum, focusing on enhancing user experience, optimizing costs, and expanding their product offerings to maintain a high-quality, sustainable growth path.

Areas To Watch For JD.com (JD) Q4 2024 Earnings

Core E-Commerce Performance

Singles’ Day Impact

Q4 includes China’s largest shopping festival (Singles’ Day on November 11). JD.com’s ability to monetize this event—through gross merchandise volume (GMV) growth and high-margin categories like electronics and home appliances—would be critical. Aggressive discounts might boost sales volume but pressure profitability.

Market Share vs. Competitors

Competition from Alibaba (Taobao/Tmall), Pinduoduo (leveraging budget-conscious shoppers), and live-streaming platforms (Douyin, Kuaishou) could affect JD’s growth. JD’s premium positioning and logistics edge (same-/next-day delivery) may help retain high-income consumers.

Macroeconomic Environment

Consumer Sentiment in China

A recovering Chinese economy (post-COVID, stimulus measures) could drive discretionary spending, benefiting JD’s high-ticket categories. Conversely, lingering economic uncertainty or deflationary pressures might suppress demand.

Regulatory Landscape

China’s tightened tech regulations (data security, antitrust) could influence operational costs. JD’s focus on compliance and its logistics-heavy model (less reliant on pure platform economics) may mitigate risks compared to peers.

Logistics & Cost Efficiency

Logistics Network Optimization

JD’s in-house logistics arm (JD Logistics) is a key differentiator. Improved automation, route optimization, and partnerships (e.g., with third-party merchants) could reduce delivery costs and enhance margins.

Rural Expansion

Penetration into lower-tier cities and rural areas—a growth frontier—may drive user acquisition but require heavy upfront investment, impacting short-term profitability.

Diversification Efforts

New Ventures

JD Health: Growth in online pharmacy and healthcare services amid post-pandemic demand.

JD Cloud & AI: Adoption by enterprises and government clients could diversify revenue streams.

International Markets: Expansion in Southeast Asia (e.g., Indonesia, Thailand) remains a long-term play but faces competition from Sea’s Shopee and Lazada.

Profitability vs. Investment

These segments may still be in investment mode, weighing on consolidated earnings despite revenue growth.

Financial Health & Margins

Gross Margin Pressure

Intense competition may force JD to sustain discounts, particularly in electronics. Higher-margin categories (fashion, groceries) and advertising/services revenue could offset this.

Operating Leverage

Cost discipline (e.g., reduced sales/marketing spend, layoffs in 2023) might improve operating margins if revenue growth accelerates.

Key Metrics to Watch

Revenue Growth: Consensus estimates likely hinge on mid-single-digit YoY growth (aligning with China’s cautious consumption rebound).

In Q3 2024, JD.com reported a 5% year-on-year increase in net revenues to RMB 260 billion in Q3 2024, outpacing domestic total retail sales growth.

Active Customers: Stabilization or growth after periods of stagnation. In Q3 2024, the number of quarterly active customers grew at a double-digit rate year-on-year for the fourth consecutive quarter.

General merchandise revenues increased by 8% year-on-year, with supermarket categories achieving double-digit growth.

Non-GAAP Net Income: Progress toward sustained profitability amid investments. Previous quarter saw gross profit grew by 16% year-on-year, with a gross margin expansion of 165 bps to 17.3%. Non-GAAP net profit increased by 24% year-on-year.

Free Cash Flow: Liquidity position to fund expansion and share buybacks ($1.5B program announced in 2023). JD.com completed a USD 3 billion share repurchase program and launched a new USD 5 billion program extending through 2027.

Risks & Catalysts

Upside Catalysts:

Stronger-than-expected consumer spending during Singles’ Day.

Margin expansion from logistics efficiency and higher-margin services.

Regulatory easing or stimulus boosts confidence.

Downside Risks:

Prolonged deflationary environment hurting big-ticket sales. Some products under the trade-in program experienced high demand that could not be fully matched due to limited production capacity.

Price wars with Pinduoduo/Alibaba eroding margins. Revenue from new business was down 26% year-on-year, primarily due to adjustments in the Jingxi business.

Geopolitical tensions impacting cross-border operations. Non-GAAP operating loss in new business was RMB 615 million, compared to a RMB 192 million loss a year ago.

JD.com (JD) Price Target

Based on 9 Wall Street analysts offering 12 month price targets for JD in the last 3 months. The average price target is $50.13 with a high forecast of $60.00 and a low forecast of $41.00. The average price target represents a 19.64% change from the last price of $41.90.

With the Chinese economy making another recovery stimulus, we could be seeing JD.com benefitting from it, but if JD wanted to have a continued growth momentum, it will need to boost its new business as well as international ecommerce.

The U.S. tariffs might have little impact on JD.com as the active customers are mostly from domestic market.

Technical Analysis - Exponential Moving Average (EMA)

From the technicals, we can see that JD have been trying to make a breakthrough in the daily uptrend, and it is currently defending the 26-EMA while trading close to 12-EMA.

We need JD to show more momentum as seen in RSI it is in a wait-and-see attitude to make a move towards the overbought region. We need investors conviction and also the buying sentiment to show with their domestic market consumer spending poised to increase.

So I will be watching the trading for JD on 05 March and see if there is an opportunity presented.

Summary

JD.com’s Q4 2024 earnings will likely reflect a balancing act between growth and profitability in a challenging macro environment. While its logistics infrastructure and premium customer base provide resilience, competition and economic fragility in China remain headwinds.

Here are some of the factors that I would focus.

1. GMV and Margin Trends: Ability to monetize without excessive discounting.

2. Diversification Progress: Contributions from healthcare, cloud, and overseas markets.

3. Cost Management: Evidence of operating leverage from prior restructuring.

Long-Term Outlook: JD remains a leader in China’s high-end e-commerce segment, but its stock trajectory depends on executing diversification while navigating macroeconomic and competitive pressures. A beat on margins or guidance could reignite bullish sentiment, while weak consumption data or market share losses may trigger downside.

Appreciate if you could share your thoughts in the comment section whether you think JD.com would be able to show a strong momentum in its path to continued growth?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.