Good News From JD Leads to Lift in Fair Value

The no-moat firm is on track to achieve profitability this year.

Securities In This Article
JD.com Inc ADR
(JD)

Year-over-year direct sales growth of 39% was driven by home appliance, food and beverage, cosmetics, home furnishing, and baby products. Gross margin was 15.5%, an increase from 14.4% in the year-ago quarter, helped by economies of scale in procurement cost and improved monetization through better user and brand engagement. Fulfillment expenses were up 40% year over year, slightly more than net revenue of 39.2% as the group continued to expand its warehouse network. As of the end of September, JD boasted 405 warehouses comprising approximately 9 million square meters, up over 50% from a year ago. Net income from continuing operations in the quarter swung to the black at CNY 1 billion.

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About the Author

Chelsey Tam

Senior Equity Analyst
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Chelsey Tam is a senior equity analyst, Asia, for Morningstar*. She covers China e-commerce stocks and logistics names. She covers Alibaba, JD.com and Pinduoduo, SF Holding, ZTO Express and is experienced in covering retail companies.

Before joining Morningstar in 2013, Tam was a sell-side analyst at a securities firm in Hong Kong covering small to mid cap companies. Before that, she was a buy-side associate covering Macau gaming companies mainly.

Tam holds bachelor’s degrees in commerce (finance) and economics from the University of Toronto.

* Morningstar Asia Limited (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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