Blue Whale News, November 15th (Reporter Wu Jingjing) On the afternoon of November 14th Beijing time, JD.com released its Q3 2024 financial report. Although the data showed that JD's revenue and profit performance during the reporting period were higher than analysts' predictions, the company's stock price still fell after the opening of the US stock market, with a drop of 6.57% and a closing price of $33.35. Some analysts say that it is mainly affected by the US dollar exchange rate.
According to the financial report, in the third quarter of 2024, JD Group's revenue reached 260.4 billion yuan, an increase of 5.1% compared to the same period last year; The operating profit is 12 billion yuan, an increase of 29.5% compared to the third quarter of 2023; The net profit attributable to the common shareholders of our company was RMB 11.7 billion, an increase of 47.8% compared to the same period last year.
In terms of revenue performance, the growth rate of 5.1% in the third quarter was higher than the growth rate of 1.2% in the previous quarter, while the growth rate of net profit slowed down compared to the previous quarter.
Data from Futu NiuNiu
Data from Futu NiuNiu
The 'national subsidy' promotes the increase of household appliance business revenue and drives the growth rate of JD's retail business to improve
JD's core business mainly consists of three major segments: JD Retail (including JD Health, JD Industry, etc.), JD Logistics, and new businesses such as Dada and Jingxi.
Retail is the cash cow business that supports JD's revenue, and its growth rate in this quarter is better than before. According to the financial report, the retail sector still contributed the majority of revenue in the third quarter, reaching 224.99 billion yuan, a year-on-year increase of 6.1%. This is not only a significant improvement from the 1.5% growth rate in the second quarter, but also better than the overall growth rate in 2023.
The increase in revenue from electronic products and household appliances has driven the sustained growth of JD's retail business. This sector has always been the foundation of JD's retail business, and this advantage has continued to amplify in this quarter with the promotion of national subsidy policies. During the performance conference call, JD.com CEO Xu Ran mentioned, "The demand for home appliances and computers in September also showed a significant increase compared to July and August. The overall sales growth rate for the entire third quarter showed a trend of increasing month by month
According to the financial report, electronic products and household appliances regained their growth momentum in the third quarter, with revenue reaching 122.56 billion yuan, a year-on-year increase of 2.7%, while the revenue of this sector decreased by 4.6% year-on-year in the previous quarter.
Xu Ran mentioned in the conference call that due to the time required for consumers to understand policies and the insufficient production capacity of brands, the effect of the "national subsidy" in the third quarter has not been fully released. Next, consumer confidence is expected to continue to strengthen, benefiting the retail and manufacturing industries.
It can be foreseen from the just passed Double Eleven that in the fourth quarter of 2024, the business advantages of JD's retail home appliance sector are expected to continue to expand. On Double 11 in 2024, the government will launch subsidy policies that can be combined with platform Double 11 discounts for the first time, with a subsidy amount of up to 20%, stimulating residents' consumption power in household appliances. Compared with other platforms, JD and local governments' deeper cooperation and different preferential combinations are expected to further amplify this advantage.
JD released Double Eleven data showing that during the shopping festival, the transaction volume of 519 home appliance categories, including energy-saving air conditioners, floor cleaning robots, dryers, and zero water pressure smart toilets, increased by over 200% year-on-year. More than 90% of rural areas in counties have participated in the trade in program, with large screen TVs being the preferred option. From this perspective, the home appliance sector is also expected to drive the company's annual performance improvement.
In addition to household appliances, daily necessities are also further supporting the growth of JD's retail industry. In the third quarter of 2024, the revenue from daily necessities reached 82.05 billion yuan, a year-on-year increase of 8%. JD.com stated that the revenue of daily necessities has maintained high single digit year-on-year growth for three consecutive quarters, exceeding the industry average growth rate. Supermarkets and clothing categories have achieved double-digit year-on-year growth.
JD Logistics' profitability continues to rise, creating the best level since its listing
JD Logistics is the second largest core business unit of JD Group. In the third quarter of 2024, JD Logistics' revenue grew to 44.4 billion yuan, a year-on-year increase of 6.6%, slightly lower than the 7.7% growth rate in the previous quarter. From the perspective of revenue composition, in the third quarter of 2024, JD Logistics' external customer revenue reached 31.6 billion yuan, accounting for over 70% of the total revenue. Currently, it has served nearly 60000 external integrated supply chain customers.
JD Logistics' profitability is continuously strengthening. In the third quarter of 2024, its adjusted net profit reached 2.57 billion yuan, a year-on-year increase of 205.1%, and the gross profit margin increased from 7.9% to 11.7%, creating a new high after going public.
JD Logistics CEO Hu Wei stated that since the beginning of this year, JD Logistics has continuously achieved a significant year-on-year increase in profits in each quarter, fully reflecting the company's continuous promotion of network product technology upgrades, continuous improvement of core resource utilization efficiency, and further significant results in promoting economies of scale.
The management stated that in the next step, JD Logistics will focus more on growth, seize more market opportunities, and also hope to support profits through cost reduction measures to increase resource investment in growth.
Interconnection is also expected to further expand the revenue level of JD Logistics. JD has fully integrated into the Taobao Tmall platform, and many Taobao Tmall merchants have chosen JD Logistics as their service provider.
At the performance briefing, the management responded that they are confident in achieving a substantial increase in JD Logistics' market share on the Taobao platform. Previously, JD Logistics had a relatively low base in Taotian. Currently, JD Logistics' first wave of growth in Taotian is not due to an increase in the number of shipping customers, but rather to the improvement of some existing customers, that is, many merchants who hope to entrust Taotian business to JD Logistics but were previously constrained. The second wave is new incremental users
In addition to retail and logistics business, JD's new business segments, including Dada, JD Production and Development, Jingxi, and overseas business, had a revenue of 4.97 billion yuan, a year-on-year decrease of 25.7%.
In terms of user growth data, JD.com only revealed a vague set of numbers: the number of quarterly active users and the frequency of user shopping have maintained double-digit growth year-on-year for three consecutive quarters. Thanks to the increase in user activity, third-party merchants saw a year-on-year growth of over 20% in transaction users and over 30% in order volume.
For the annual performance, JD.com has also released an optimistic signal. JD CFO Dan Su stated that the overall performance of Double Eleven in 2024 exceeded expectations. The user traffic of JD.com and the growth rate of users accessing the JD.com app have significantly increased, with the number of active users achieving double-digit growth throughout the entire promotion period, and the average daily purchase user growth rate exceeding 20%
From a full year perspective, we are very confident that the group's profits will exceed double-digit growth, "said Dan Su.
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