Latest news with #JD.com's
Yahoo
23-05-2025
- Business
- Yahoo
Investors Will Want JD.com's (NASDAQ:JD) Growth In ROCE To Persist
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Speaking of which, we noticed some great changes in (NASDAQ:JD) returns on capital, so let's have a look. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.11 = CN¥42b ÷ (CN¥678b - CN¥284b) (Based on the trailing twelve months to March 2025). Thus, has an ROCE of 11%. By itself that's a normal return on capital and it's in line with the industry's average returns of 11%. See our latest analysis for Above you can see how the current ROCE for compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for . is displaying some positive trends. The data shows that returns on capital have increased substantially over the last five years to 11%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 205%. So we're very much inspired by what we're seeing at thanks to its ability to profitably reinvest capital. On a separate but related note, it's important to know that has a current liabilities to total assets ratio of 42%, which we'd consider pretty high. This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. All in all, it's terrific to see that is reaping the rewards from prior investments and is growing its capital base. And since the stock has fallen 27% over the last five years, there might be an opportunity here. So researching this company further and determining whether or not these trends will continue seems justified. Before jumping to any conclusions though, we need to know what value we're getting for the current share price. That's where you can check out our that compares the share price and estimated value. While isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
22-05-2025
- Business
- Business Times
How JD.com intends to unseat China's takeout king
WHEN a young Beijing resident opened his front door to grab his takeout meal in April, he was shocked to see a billionaire on his doorstep. Richard Liu, the founder of e-commerce giant had just scooted through the Chinese capital's streets to personally deliver the meal as well as a clear message to the country's dominant takeout platforms — is going to shake things up. In the cutthroat world of internet platforms, friends can quickly turn into rivals. During a dinner with other top tech CEOs, Liu said to Wang Xing of Meituan, the country's dominant food delivery platform: 'Retail doesn't belong just to me or – anyone can do it. I have no right to complain. The same goes for food delivery.' With those words, he directly challenged Meituan's grip on China's US$82 billion food delivery market. Both players now promise to deliver orders within 30 minutes for distances up to 5 km, taking instant retail competition to new levels. Liu's publicity stunt marked aggressive entry into the business. Since the launch of JD Takeaway in February, the e-commerce giant has been courting merchants with zero-commission deals, winning over delivery riders by offering a comprehensive social security package, and attracting consumers through discount vouchers. In April, it announced a 10 billion yuan (S$1.82 billion) campaign to subsidise consumers and merchants. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up JD Takeaway's orders have grown so rapidly that the app once collapsed during peak lunch hours. Forty days after launch, daily orders exceeded 1 million. A little more than two months later, orders exceeded 10 million. Meituan – which receives an estimated 60 million orders each day, over 60 per cent of market share – was forced to respond. The same day announced it would make social security payments for its riders, Meituan also promised similar benefits for its full-time and regular part-time delivery riders starting in the second quarter. It also followed by promising 10 billion yuan to help restaurants. To gain public support, targeted two major issues that have long plagued the industry: violations of delivery riders' labour rights and the controversial 'choose one of two' practice, where platforms force merchants to exclusively use their services. In 2021, Meituan was fined 3.4 billion yuan for implementing such exclusivity requirements. Tensions between the two rivals intensified in April. Without specifically naming competitors, condemned the imposition of 'choose one of two' on delivery riders. On the same day, Meituan fired back with a statement accusing a rival of 'spreading rumors to attract online attention', without naming In the same month, Liu also criticised Meituan's high commission rates, claiming that food delivery 'net profit will not exceed 5 per cent', compared to Meituan's current rates of 6 per cent to 8 per cent. The heated rivalry between the duo – representing the most prominent head-to-head clash in China's tech sector in recent years – comes at a time when the whole industry is downsizing. It has sparked concerns about the companies' future growth and profitability, with both of their stock prices falling by about a quarter since mid-March. Seeking growth breakthroughs Market analysts saw move into takeout as a sign of its urgent search for new growth. The company's main e-commerce business weakened after becoming entangled in price wars during 2023. It has fallen to fourth place in China's domestic e-commerce market in terms of gross merchandise value, trailing Alibaba's Taobao and Tmall Group, discount platform Pinduoduo and ByteDance's Douyin. In 2023, revenue growth dropped to 3.7 per cent, from 9.9 per cent in the previous year. In 2024 annual revenue growth recovered to 6.8 per cent, benefiting from the government's trade-in policy for household appliances. ' benefited from home appliance subsidies in the second half of 2024, but this boost is not sustainable,' a senior executive from a non-e-commerce division told Caixin. sees food delivery as a strategic opportunity that meets Liu's internal criteria for new ventures: clear market pain points, operational feasibility, and financial sustainability. A person close to investor relations department said Liu emphasized these three points during internal training sessions. The company believes the food delivery sector has relatively fewer competitors and high commissions, making the opportunity attractive. It also views the move as feasible given its decade-long experience in instant retail. Lastly, the investment is seen as financially manageable, supporting the decision to expand into this space, according to the person's analysis. hopes to use high-frequency food delivery services to drive traffic to its lower-frequency e-commerce business. 'Instant retail is a natural extension of our core retail business, and food delivery is one of the high-frequency services within instant retail that can enrich user scenarios and enhance user stickiness and activity,' said Xu Ran, the CEO of and JD Retail, in a March conference call. Meanwhile, Meituan is attempting to expand from high-frequency food delivery traffic into non-food categories to squeeze more value out of its traffic. Competing on speed In April, Meituan responded to foray onto its turf with its instant retail brand 'Meituan Instashopping' that offers goods ranging from groceries and beverages to electronic and skincare products, with an official claim of an average 30-minute delivery time to directly challenge next-day delivery. In response, announced its instant delivery service for a wide range of goods including fashion items, cosmetics, electronic products and medicine, boasting delivery in less than 30 minutes. Meituan does not see JD Takeaway as a threat as its 'order volume isn't seen as large enough,' a source familiar with the food delivery giant told Caixin. 'The counterattack is focused on the instant shopping element.' Instant retail represents a larger market than food delivery. According to the Ministry of Commerce, the instant retail market will grow by 29 per cent annually to exceed 2 trillion yuan by 2030. The key to Meituan Instashopping's supply and order growth is its 'flash warehouses' – small storage spaces placed in neighbourhoods. The company plans to set up 100,000 of them by the end of 2027. This model cuts costs by choosing cheaper store locations and only stocking the best-selling items, according to TF Securities analysts. Wang Puzhong, the CEO of Meituan's core local commerce business, said in April that Meituan now receives over 18 million non-food delivery orders daily and vowed to 'sweep those oversized, inefficient warehouse-delivery systems into the dustbin of history'. ' faces challenges in all four aspects: more, faster, better, cheaper,' an internet industry insider told Caixin, explaining that it cannot match Taobao and Tmall in variety or Pinduoduo in pricing, while its logistics business is being challenged by Meituan's Instashopping in speed. High-risk move? China's food delivery market has stabilised following price wars. According to 2024 data from Bocom International, Meituan has a 65 per cent market share, while Alibaba's holds 33 per cent, leaving all other platforms combined with just 2 per cent of the market. Market penetration has largely plateaued, leaving limited room for further user growth. SDIC Securities reported in April that expansion has notably slowed, with food delivery consistently accounting for around 25 per cent of total restaurant sales over the past three years. An analyst from an international hedge fund emphasized that for to establish a sustainable food delivery business, it must achieve significant order volumes to be profitable, and delivery algorithms require substantial data to optimize effectively. 'Once subsidies end, companies compete on operations, supply, and fulfillment efficiency,' a mid-level executive at told Caixin. 'Currently, supply focuses on chain restaurants, making it difficult to expand into the small restaurant segment without dedicated field teams.' For however, profitability may not be the sole success metric for its food delivery venture. The executive noted that even if traffic and orders decline, an increase in app daily active users would justify the investment from a medium-to-long-term strategic perspective. There appears to be a boost in engagement on app since its food delivery launch. Daily active users rose from 115 million the day the service came online on Feb 11 to 151 million by April 26, peaking at 160 million on April 22 amid media attention and founder Liu's delivery stunt, according to data from QuestMobile. Average daily usage time and app opens per user also saw modest increases during the period. The person close to investor relations department similarly indicated that achieving tens of millions of daily food delivery orders would not, in isolation, constitute success. The more critical factor is whether the food delivery service generates spillover effects that boost sales on JD's main platform. 'Platform companies invariably maintain a portfolio that includes both profitable and unprofitable business lines, as well as high-traffic and low-traffic segments,' the person added. CAIXIN GLOBAL
Yahoo
19-05-2025
- Business
- Yahoo
Is Weakness In JD.com, Inc. (NASDAQ:JD) Stock A Sign That The Market Could be Wrong Given Its Strong Financial Prospects?
With its stock down 14% over the past three months, it is easy to disregard (NASDAQ:JD). However, stock prices are usually driven by a company's financial performance over the long term, which in this case looks quite promising. Particularly, we will be paying attention to ROE today. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Put another way, it reveals the company's success at turning shareholder investments into profits. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for is: 16% = CN¥49b ÷ CN¥309b (Based on the trailing twelve months to March 2025). The 'return' refers to a company's earnings over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.16. See our latest analysis for So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. To start with, ROE looks acceptable. Even when compared to the industry average of 17% the company's ROE looks quite decent. Consequently, this likely laid the ground for the decent growth of 8.6% seen over the past five years by We then compared net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 19% in the same 5-year period, which is a bit concerning. Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if is trading on a high P/E or a low P/E, relative to its industry. has a healthy combination of a moderate three-year median payout ratio of 31% (or a retention ratio of 69%) and a respectable amount of growth in earnings as we saw above, meaning that the company has been making efficient use of its profits. Along with seeing a growth in earnings, only recently started paying dividends. Its quite possible that the company was looking to impress its shareholders. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 21% over the next three years. However, the company's ROE is not expected to change by much despite the lower expected payout ratio. On the whole, we feel that performance has been quite good. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a respectable growth in its earnings. That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
15-05-2025
- Business
- Yahoo
Why JD.com Stock Slumped on Thursday
An analyst reduced his price target on the Chinese e-commerce company. This was despite his clear admiration for its first-quarter performance. 10 stocks we like better than › Although (NASDAQ: JD) recently released first-quarter results pleased many investors and analysts, not everyone has been overly bullish on the company. Early Thursday morning, an analyst made a relatively assertive price target cut on the stock, and the market reacted by trading it down by almost 4% on the day. Well before market open that session, Susquehanna International's Shyam Patil reduced his price target by more than 10%, cutting it to $40 per share from his previous $45. That didn't change his overall estimation of the stock, as he maintained his neutral recommendation. According to reports, Patil expressed admiration for the company's first-quarter performance, writing that user experience improvements were catalyzing growth in the user count. He feels that the Chinese e-commerce giant is also well positioned in its market, and could benefit from ventures into new segments such as food delivery. That said, however, the relatively shaky Chinese economy could limit potential, in his view. Patil also believes that this state of affairs could persist; hence the price target reduction and neutral outlook. Getting slightly more bearish on is a somewhat counterintuitive move these days. That's because the company posted quite encouraging year-over-year growth, especially on the bottom line, in the aforementioned quarter. It also notched rather convincing beats on the consensus analyst estimates. This indicates that the Chinese macroeconomy might be in better shape than many believe. I wouldn't count out quite yet, especially if it continues to improve its fundamentals so impressively. Before you buy stock in consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $620,719!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,511!* Now, it's worth noting Stock Advisor's total average return is 959% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends The Motley Fool has a disclosure policy. Why Stock Slumped on Thursday was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
JD.com Inc (JD) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic Investments
Total Revenue Growth: Up 16% year on year to RMB301 billion in Q1 2025. Non-GAAP Net Profit: Increased by 43% year on year to RMB13 billion. Net Margin: Expanded by 82 basis points to 4.2%. Gross Margin: Improved by 60 basis points to 15.9%. Electronics and Home Appliances Revenue Growth: Up 17% year on year. General Merchandise Revenue Growth: Up 15% year on year. Service Revenues Growth: Accelerated to 14% year on year. Marketplace and Marketing Revenues: Increased by 16% year on year. JD Retail Non-GAAP Operating Income: Up 38% year on year to RMB13 billion. JD Logistics Revenue Growth: Up 11% year on year. New Business Revenue Growth: Positive growth of 18% year on year. Free Cash Flow: RMB38 billion as of the end of Q1 2025. Cash and Cash Equivalents: Totaled RMB203 billion at the end of Q1 2025. Warning! GuruFocus has detected 2 Warning Sign with JD. Release Date: May 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Inc (NASDAQ:JD) reported a 16% year-on-year increase in total revenues for Q1 2025, showcasing robust growth across all major categories. The company achieved a 43% year-on-year increase in non-GAAP net profit, with net margin expanding to 4.2%, driven by improvements in gross margin. Inc (NASDAQ:JD) saw double-digit growth in its quarterly active customer numbers, with increased shopping frequency and notable acceleration. The company's food delivery business is rapidly growing, with daily order volumes nearing 20 million, indicating strong market demand and potential synergies with JD's core retail operations. Inc (NASDAQ:JD) is actively leveraging AI and automation technologies to enhance operational efficiency, improve user experience, and drive long-term growth across its ecosystem. Despite the positive growth, Inc (NASDAQ:JD) faces challenges in maintaining its momentum in the highly competitive food delivery market, which requires significant investment and operational enhancements. The company's new business segment reported a widened non-GAAP operating loss of RMB1.3 billion, primarily due to investments in expanding its presence in lower-tier markets. Inc (NASDAQ:JD) is still in the early stages of optimizing its food delivery operations, with ongoing system enhancements needed to improve user experience and operational efficiency. The company's free cash flow decreased to RMB38 billion from RMB61 billion in the same period last year, primarily due to cash outflows associated with the trading program and efforts to secure product supplies. Inc (NASDAQ:JD) faces pressure to balance short-term financial targets with long-term strategic investments, particularly in its food delivery and AI initiatives. Q: What is strategy for the food delivery business in the medium term, and how does it fit into the overall business ecosystem? A: Sandy Xu, CEO, explained that food delivery is a natural extension of its core retail business, aiming to provide diverse shopping experiences. The food delivery business is integrated into JD's ecosystem, creating synergies in user engagement, supply chain, and fulfillment. The focus is on enhancing user and merchant experience, scaling the business, and achieving investment ROI. aims to leverage its brand strength and logistics capabilities to address market demands effectively. Q: How has achieved growth in the general merchandise and fashion categories, and what are the plans to sustain this momentum? A: Sandy Xu, CEO, highlighted that has seen double-digit growth in general merchandise, with supermarkets and fashion categories accelerating. The company has focused on enhancing operational capabilities and user experience. For fashion, plans to expand brand selection and leverage supply chain advantages. In supermarkets, aims to utilize its efficient business model and supply chain to meet diverse user needs, driving sustainable growth. Q: Can you provide insights into AI adoption and its impact on advertising and other business segments? A: Sean Zhang, Director of Investor Relations, stated that is actively integrating AI across its operations to enhance efficiency and user experience. AI is being used to improve demand-supply matching, optimize advertising algorithms, and enhance fulfillment processes. The company is developing AI-powered tools for merchants and leveraging AI in logistics to reduce costs and improve productivity. Q: What are the key metrics and financial impacts of food delivery business? A: Sean Zhang, Director of Investor Relations, noted that food delivery business has seen rapid growth in order volume and user engagement. The company is focusing on building fundamental capabilities and enhancing user experience. While still in the early stages, the business is expected to generate synergies with JD's core retail operations, driving incremental growth and efficiency improvements. Q: How does plan to enhance shareholder returns, and what are the recent updates on share buybacks and dividends? A: Sandy Xu, CEO, reported that has repurchased approximately 80.7 million ordinary shares in 2025, representing 2.8% of outstanding shares. The company also completed a $1.44 billion dividend payout. remains committed to returning value to shareholders through dividends and buybacks while focusing on long-term growth in business scale, profitability, and cash flow. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
