To The Moon

Just now, JD.com $JD.com(JD)$ $JD-SW(09618)$ released its first quarter results. After the financial results were released, the stock price of the US stock market rose immediately before the market:

There is no doubt that JD.com 's financial results exceeded expectations.

Compared with analysts' forecasts, JD.com's revenue in the first quarter was 243 billion yuan, exceeding analysts' consensus expectations of 240.5 billion yuan. First-quarter operating profit was $6.4 billion yuan, it also beat analysts' consensus of $4.8 billion yuan:

Much more than expected, could it be that 10 billion yuan subsidy working?

JD.com CFO seemed to confirm this when she said in the earnings statement:

During the first quarter, we were pleased to see service revenues grow to account for 20% of our total revenues, helping deliver strong margins and reflecting our success in attracting a record number of third-party merchants to the JD.com platform!

Before the release of the financial results, the market has been worried that the 10 billion subsidies would increase the investment of sales expenses, and then cause a decline in profits. But judging from the results, the subsidies did not erode profits.

Specifically, JD.com 's revenue in the current quarter was 243 billion yuan, up 1.4% over the same period last year, and the growth rate was the lowest in recent years:

In terms of business, JD.com Retail revenue in the first quarter was 212.4 billion yuan, down 2.4% from the same period last year. It was the main sector that dragged down the performance:

JD.com Logistics revenue in the first quarter was 36.7 billion yuan, up 34.3% year-on-year:

The revenues of Dada and New business is relatively low,It is not listed separately here. As can be seen from the following figure, Dada revenue has greatly increased, while New business has declined significantly.

Judging from the operating profits, JD.com Retail profitability has greatly increased, from 7.89 billion yuan in the same period last year to 9.8 billion in the first quarter of this year, while the operating losses of JD.com Logistics and Dada have expanded:

After talking about the revenue, we will look at the profits that exceed expectations.

JD.com 's net income in the first quarter was as high as 6.2 billion yuan, compared with a loss of 3.5 billion yuan last year. There are two main reasons for the sharp increase in net income. One is to reduce costs and increase efficiency, the other is the first quarter of last year before the completion of the acquisition of Dada stock price changes resulting in a loss of 3.6 billion yuan and the change in the fair value of investment securities.

The first reason is what JD.com has been doing for a long time, and the second is an one-off event that is not sustainable.

Take a specific look at how JD.com reduces costs and increases efficiency.

First, sales expenses: JD.com 's first quarter was 8 billion, compared with 8.7 billion in the same period last year; performance expenses were 15.4 billion in the first quarter, compared with 15.5 billion in the same period last year; General and Administrative Expenses were 2.5 billion yuan, the same as in the same period last year; and R&D expenses were 4.2 billion yuan, compared with 4.4 billion yuan a year earlier:

So, in order to reduce costs and increase efficiency, R&D costs can be saved. I don't know whether JD.com spent too much money in the good days in the past, or does it has to reduce R&D investment in order to lose future growth for the sake of profits?

In any case, JD.com 's operating income has greatly increased, and it has been achieved under the 10 billion subsidy line. If the three expenses can maintain the current situation and obtain income growth, then JD.com 's cost reduction and efficiency increase will undoubtedly be super successful!

The company didn't give guidance for the second quarter in its first-quarter report, but JD.com's CFO said the company saw 'more positive financial and operational trends in the second quarter', as it 'proactively adjusts its business, which' seems to bode well for better results in the second quarter. '

At present, analysts expect JD.com 's revenue growth to return to 5% in the second quarter, which is likely to be the lowest point in the first quarter.

JD.com 's current price-to-earnings ratio is not expensive, only 17 times. Can its future performance rebound out of the Davis double-click market? Wait and see!