JD.Com Shares Tumbled 10% after Posting Financial Results

JD.com today announced its unaudited financial results for the quarter and the full year ended December 31, 2021. JD.com Q4 net revenues were $143.3 billion, an increase of 23.0% from the fourth quarter of 2020. Q4 net loss attributable to ordinary shareholders was $0.8 billion, compared to a net income of RMB24.3 billion for the same period last year. JD.com shares tumbled 10% after posting financial results.

​Fourth Quarter and Full Year 2021 Highlights

• Net revenues for the fourth quarter of 2021 were RMB275.9 billion (US$143.3 billion), an increase of 23.0% from the fourth quarter of 2020. Net service revenues for the fourth quarter of 2021 were RMB41.2 billion (US$6.5 billion), an increase of 28.3% from the fourth quarter of 2020. Net revenues for the full year of 2021 were RMB951.6 billion (US$149.3 billion), an increase of 27.6% from the full year of 2020. Net service revenues for the full year of 2021 were RMB135.9 billion (US$21.3 billion), an increase of 44.7% from the full year of 2020.
• Loss from operations for the fourth quarter of 2021 was RMB392.0 million (US$61.5 million), compared to an income of RMB594.9 million for the same period last year.Non-GAAP2 income from operations for the fourth quarter of 2021 was RMB2.8 billion (US$0.4 billion), compared to RMB1.2 billion for the fourth quarter of 2020. Operating margin of JD Retail before unallocated items for the fourth quarter of 2021 was 2.1%, compared to 1.9% for the fourth quarter of 20203. Income from operations for the full year of 2021 was RMB4.1 billion (US$0.6 billion), compared to RMB12.3 billion for the full year of 2020. Non-GAAP income from operations for the full year of 2021 was RMB13.4 billion (US$2.1 billion), compared to RMB15.3 billion for the full year of 2020. Operating margin of JD Retail before unallocated items for the year of 2021 was 3.1%, compared to 3.0% for the year of 20203.
• Net loss attributable to ordinary shareholders for the fourth quarter of 2021 was RMB5.2 billion (US$0.8 billion), compared to a net income of RMB24.3 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholdersfor the fourth quarter of 2021 was RMB3.6 billion (US$0.6 billion), compared to RMB2.4 billion for the same period last year. Net loss attributable to ordinary shareholdersfor the full year of 2021 was RMB3.6 billion (US$0.6 billion), compared to a net income of RMB49.4 billion for the full year of 2020. Non-GAAP net income attributable to ordinary shareholdersfor the full year of 2021 was RMB17.2 billion (US$2.7 billion), compared to RMB16.8 billion for the full year of 2020.
• Diluted net loss per ADS for the fourth quarter of 2021 was RMB3.33 (US$0.52), compared to a diluted net income per ADS of RMB15.18 for the fourth quarter of 2020. Non-GAAP diluted net income per ADS for the fourth quarter of 2021 was RMB2.21 (US$0.35), compared to RMB1.49 for the same period last year. Diluted net loss per ADS for the full year of 2021 was RMB2.29 (US$0.36), compared to a diluted net income per ADS of RMB31.68 for the full year of 2020. Non-GAAP diluted net income per ADS for the full year of 2021 was RMB10.75 (US$1.69), compared to RMB10.56 for the full year of 2020.
• Operating cash flow for the full year of 2021 was RMB42.3 billion (US$6.6 billion), compared to RMB42.5 billion for the full year of 2020. Free cash flow, which excludes the impact from JD Baitiao receivables included in the operating cash flow, for the full year of 2021 was RMB26.2 billion (US$4.1 billion), compared to RMB34.9 billion for the full year of 2020.
• Annual active customer accounts4 increased by 20.7% to 569.7 million in 2021 from 471.9 million in 2020.

“JD.com maintained a healthy growth momentum and contributed to the high-quality expansion of China’s consumption amid a dynamic external environment. This was driven by our resilient business model as a new type of real economy based enterprise and persistent focus on serving users and supporting business partners,” said Lei Xu, President of JD.com. “JD’s open ecosystem and supply chain capabilities created exceptional value for business partners by enabling high-efficiency operations and continued growth. Looking ahead, our focus on bringing value to users and partners will continue to guide our long-term development and investment priorities.”

“We are pleased to finish the year with a set of strong results on both the top and bottom lines as we continued to execute and deliver on our strategic priorities,” said Sandy Xu, Chief Financial Officer of JD.com. “During the quarter, we further optimized our operational efficiency through technology and innovation, increasing our competitiveness as well as our ability to support our business partners. In 2022, we will continue to execute our business strategies and focus on sustainable high-quality growth across all of our business lines.”

Business Highlights

Environment, Social and Governance

• JD.com further enhanced its green construction standards for its recent office park expansion, receiving the Three-Star Green Building Certification, the highest such rating awarded in China. As a low-carbon model company, JD.com’s headquarter offices in each region are constructed with low-maintenance materials and employ eco-friendly facilities including energy-saving LED lights and micro-sprinkler irrigation systems. In addition, all of JD.com’s headquarter parks feature 2,700 cubic meter volume rainwater storage tanks which reduce municipal drainage pressure through reuse of rainwater, satisfying “Sponge City” standards for innovative water management strategies.
• Since late 2021, JD.com has proactively donated protection materials and daily necessities to support the fight against COVID-19 outbreaks in Hong Kong, Shaanxi provincial capital Xi’an and other regions. As part of its efforts, JD.com announced the donation of RMB100 million worth of anti-epidemic supplies to medical workers in Hong Kong. In Xi’an, JD.com further upgraded its disinfection measures to ensure product safety and increased employee protection, including purchasing COVID-19 health insurance for all local employees.

JD Retail

• During the fourth quarter, JD.com further promoted its omni-channel innovation project through its collaboration with over 600 stores of China Resources Vanguard (CR Vanguard), one of China’s largest retail chains. JD.com leveraged the on-demand delivery and retail platform of Dada Nexus Limited, or Dada Group, which was recently consolidated by JD.com, to help CR Vanguard achieve an increase of over 400% year-on-year in transaction volume during 2021’s Singles Day Grand Promotion. So far, JD.com has successfully established collaboration with more than 370 supermarkets including Walmart and Yonghui, covering over 34,000 stores with over three million SKUs, providing consumers with on-demand shopping options through JD.com’s app, including the recently launched in-app tab “Nearby”, the entrance to JD.com’s one-hour delivery service which covers nearly 400 cities in China.
• In the fourth quarter, JD.com established partnerships with Dior, LOEWE and Givenchy, three luxury brands under LVMH, through JD.com’s mini-app. This marks the first collaboration between Dior’s fashion and accessories category and an e-commerce retailer worldwide, as well as LOEWE and Givenchy’s first collaboration with a third-party e-commerce retailer in China. In addition, three watch brands TISSOT, Emporio Armani and MICHAEL KORS, and a high-end eyewear brand ZEISS opened flagship stores on JD.com. Several international designer brands also launched flagship stores on JD.com during the quarter, including Ami Paris, Neil Barrett, Yuzefi, TSUBO, Études and ZESPÀ.
• In January 2022, JD.com announced its strategic partnership with Shopify, becoming Shopify’s first strategic partner in China. Through this collaboration, JD.com will launch a fast-track channel for international merchants and emerging brands on Shopify to list their products on JD.com, offering more global products to Chinese consumers. Additionally, JD.com will support high-quality Chinese brands to set up Direct-to-Consumer channels through Shopify to reach consumers globally, and help international merchants on Shopify to access JD.com’s high-quality supplier network.
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JD Health

• In the fourth quarter, JD Health continued to innovate and bring quality healthcare services to all family members. As one of the first online pet hospitals launched in China, leveraging the technology and supply chain capabilities, JD Health partnered with veterinarians and offline specialist pet hospitals to provide intergraded online and offline services experience to users. By the end of 2021, JD Health had over 5,000 professional veterinarians, providing pet owners with 24/7 online healthcare consultation services including online video conferencing consultation, pet health advisory and interpretation of reports.
• In December 2021, JD Health led the establishment of the first “Internet Medical Expert Committee” with the participation of 27 academic leaders from JD Health specialist centers and more than 30 chief physicians and deputy chief physicians from multiple Grade “3A” hospitals in China. The Committee’s purpose is to promote the high-quality development of the internet medical industry, medical innovation and the application of transformative medical scientific research. In addition to supporting the standardization of internet diagnosis and treatments and providing guidance for internet medical services, the Committee will help to establish a range of mechanisms to further improve the quality of internet medical services.
• In the fourth quarter, JD Health continued to explore in-depth collaborations with leading pharmaceutical companies. JD Health partnered with Takeda China to debut Firazyr®, a new drug for the treatment of acute attacks of Hereditary Angioedema (HAE) through JD Pharmacy. JD Health and Sanofi, a global biopharmaceutical company, jointly launched the “Diabetes Online Diagnosis and Treatment Service Management Excellence Center”. JD Health also reached a strategic cooperation with BeiGene, a global science-driven biotechnology company, to jointly establish an innovative platform to provide professional management services for cancer patients.
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JD Logistics

• JD Logistics provided integrated supply chain logistics services for international sporting events covering multiple warehouse centers and competition and non-competition venues. Through the use of Automated Guided Vehicle (“AGV”) robots and intelligent distribution equipment, JD Logistics helped to ensure efficiency and safety of the events.
• JD.com entered into a strategic partnership with Tyson Foods China to facilitate the digital upgrade of its supply chain. JD Logistics will provide Tyson Foods China with customized and digitalized supply chain planning, as well as warehouse network planning and inventory distribution services. Leveraging JD Logistics’s cold chain warehouse and distribution network and system capabilities, the collaboration will provide Tyson Foods China with more efficient and reliable cold chain solutions.
• As of December 31, 2021, JD Logistics operated over 1,300 warehouses, which covered an aggregate gross floor area of over 24 million square meters, including space in cloud warehouses managed under the JD Logistics Open Warehouse Platform.
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JD Industry

• In the fourth quarter, JD Industry introduced a new generation of infrastructure for industrial supply chain management, including enterprise distribution centers, smart cabinets and mobile warehouses. More than 200 facilities have been deployed nationwide to address the pain points facing industrial enterprises, such as the fragmentation of package procurement due to multiple orders and channels, difficulty in providing on-time deliveries of material supplies for construction projects in remote areas, the low efficiency of on-site industrial material management and high inventory costs. JD Industry is committed to improving the efficiency of cross-industry collaboration and facilitating the digital transformation of the industrial supply chain.