CICC has maintained its profit forecasts for JD LOGISTICS (02618) for 2026 and 2027, projecting non-IFRS net profits of RMB 9.74 billion and RMB 10.77 billion, respectively. The firm reiterated its "Outperform" rating but raised the target price by 22% to HK$19.4, reflecting confidence in future earnings growth, robust shareholder returns, and overall market risk appetite. JD Logistics' first-quarter results exceeded both CICC's and market expectations. Revenue grew 29% year-over-year to RMB 60.6 billion. Net profit surged 95% year-over-year to RMB 880 million, while non-IFRS net profit increased 40.1% to RMB 1.05 billion. The outperformance was primarily driven by accelerated overseas expansion, deeper customer collaboration in the supply chain business, and service optimizations in express delivery that boosted volume and revenue. Integrated supply chain client revenue rose 25.9% year-over-year to RMB 29.2 billion. Revenue from JD Group increased 32% to RMB 19.4 billion, benefiting from rapid overseas growth and steady expansion in key retail categories. Revenue from external integrated supply chain clients grew 15.5% to RMB 9.8 billion, as the company deepened strategic partnerships with leading clients across industries, achieving a 7% year-over-year increase in average revenue per client to RMB 144,000, with the total client base expanding 7.5% to 68,000. Revenue from other clients increased 32% to RMB 31.4 billion, attributed mainly to the consolidation of its instant delivery business and improvements in delivery speed and efficiency, leading to higher volumes and prices. The report noted that JD Logistics has initiated its first shareholder return program, establishing a trust and approving a share repurchase plan, demonstrating confidence in long-term development and shareholder returns. The company has set up a trust to purchase shares in the open market, aiming to offset the dilutive effect of its employee stock ownership plan (ESOP). Additionally, the board has approved a share buyback program of up to $1.2 billion over the next 48 months.
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