JD.com Poised for Strong Revenue Growth in Q2, Says Citi Analyst
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Analyst Expects Solid Revenue Growth Despite Profit Pressure in Q2
The analyst expects JD.com to report strong second-quarter results, driven by continued growth in its core retail segments. The firm forecasts total revenue of RMB 336 billion for 2Q25, up 15.3% year-over-year, slightly ahead of the market consensus of RMB 335.1 billion.
Meanwhile, the analyst expects the company's electronics sales to grow 16.6% to RMB 169 billion and general merchandise sales to rise 15% to RMB 102.2 billion. Overall, direct sales are likely to go up by 16%, showing strong demand in JD's main markets.
However, on the profitability front, Citi expects JD.com's non-GAAP net profit to decline by 68% year-over-year to RMB 4.68 billion, resulting in a narrower margin of 1.39%. The analyst highlights that profit margins will likely remain under pressure due to ongoing subsidy spending and a competitive food delivery market. Also, gross margins are expected to drop slightly, reflecting these challenges.
Moderate Growth Expected in Q3
For the third quarter, Citi projects revenue growth of 10.7% year-over-year to RMB 288.1 billion and non-GAAP net profit of RMB 4.58 billion. The analyst expects JD.com's management to maintain a cautious tone, reflecting ongoing challenges in the market.
Long-Term Outlook Remains Positive
Despite short-term profit pressures, Citi remains optimistic about JD.com's long-term growth potential. The company's expanding retail footprint and efforts to diversify its business, including new ventures like the hotel sector, position it well for future success.
Is JD Stock a Buy or Sell?
JD stock price target of $42.13 implies 35.12% upside potential. JD stock is down 2.3% year-to-date.
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