JD Stock Rises 1% on Revenue Beat, JD Logistics Expansion

JD's stock inched higher on Friday morning on better-than-expected results in the fourth quarter.
Anthony RussoNov 15,2019,19:55

The stock in JD.com Inc. (Nasdaq: JD) rose 24 cents to $33.81 per American depositary share on Friday morning, after it announced it beat Wall Street’s revenue estimates by $800 million.

The online retailer, based in Beijing, said in a statement today that in three months through September revenue reached $18.9 billion, up 29% year-over-year. The results were driven by JD’s net service revenue, which grew to $2.2 billion, at an increase of 47% from the same period last year, the report said.

Net income in the third quarter was $77 million, or 6 cents per ADS, compared with $419 million, or 30 cents per ADS, a year ago.

 “We have two strong beliefs, Richard Liu, the chief executive officer of JD, said in a conference call following the results today.

He added, “No matter at our JD Retail, Logistics, and JD Digits, the technology is our key driving forces. Only through technology will bring us long-term core competitiveness. Technology will always help us to bring up our users' experience, lower the costs, and improve our operating efficiency.

JD said its smart supply chain business, JD Logistics, “improved its efficiency” in the lower tier cities in China, by further expanding its 24-hour delivery services in those areas. JD Logistics, which accounted for almost 40% of JD’s revenue, can deliver 90% of its direct sales within 24 hours in China, according to the company’s statement.


Through September, JD Logistics operated over 650 warehouses, that covered an aggregate gross floor area of approximately 16 million square meters.


                                                                                (Source: JD.com)

China narrowed the large gap that once separated itself and the United States, in terms of the market size for retail. According to slides from JD’s conference call today, the market size in China for 2012 was 21 trillion, compared with the U.S. 30 trillion. China grew to 38 trillion in 2018, at compound annual growth rate (CAGR) of 10.1%, while the U.S. reached 41 trillion, according to JD.

 JD Slide 1.jpg

                                                                          (Source: JD.com)

Earlier this week, JD posted a gross merchandise volume (GMV) of $29.2 billion on Singles' Day, which exceeded last year’s totals. Its e-commerce rival, Alibaba Group Holding Ltd., (NYSE: BABA) set a new record on Singles' Day, with GMV reaching 38.4 billion.

Back in August, JD was considering a $500 million initial public offering for its joint venture (JV) Dada-JD Daojia, which provides online grocery and deliveries. The JV had more than 300 partnerships with prominent chain retailers and over 50 international and domestic Fast-Moving Consumer Goods (FMCG) brands, JD’s report said.

JD had over 250,000 merchants on its digital platform, with more than 200,000 employees, as of September. According to its website, JD is China’s largest retailer.

Going forward, the company expects to generate revenue in between the range of $23.3 billion and $24 billion in the 4th quarter, which would represent year-over-year growth of 21% and 25% respectively.

“We will continue to invest in technology and innovation to meet the growing needs of Chinese consumers and businesses for fast and reliable e-commerce and supply chain solutions,” Liu concluded in a statement today.