DBS analyst Sachin Mittal has maintained their bullish stance on 9618 stock, giving a Buy rating yesterday.
Sachin Mittal has given his Buy rating due to a combination of factors including JD.com’s strategic positioning and solid earnings growth projections. JD.com’s market share of approximately 18% positions it as the third-largest e-commerce player in China, and its self-developed fulfillment and logistics infrastructure substantially enhances its customer experience and supply chain efficiency. Furthermore, the company’s focus on expanding into high-growth categories like groceries and healthcare, alongside its strong presence in electronics and home appliances, is expected to drive revenue growth. With a forecasted compound annual growth rate (CAGR) of 5% from FY23 to FY26, Mittal’s outlook is optimistic based on the company’s strategic changes and a gradual recovery in demand for 3C products, supported by government trade-in policies.
Despite challenges such as a slowing macroeconomy and market competition, Mittal believes the company’s adjusted earnings will grow at an 11% CAGR from FY23 to FY26. The projection of stable adjusted net margins around 3.8% during the same period signals confidence in JD.com’s subsidy strategy and its ability to maintain a positive earnings trajectory. The Buy rating is reinforced by a target price increase to HKD224/USD57, up from the previous HKD156/USD39, due to an improved consumer sentiment and supportive government policies. This valuation is based on a 10.5x multiple on a 12-month forward core profit for the retail business and the fair value of other investees. Despite the higher target price, the stock’s valuation remains attractive at a forecasted 14x forward price-to-earnings (PE), which is still below the 5-year historical average.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a HK$210.00 price target.
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JD.com, Inc. Class A (9618) Company Description:
JD.com, Inc. is registered with the U.S. Security and Exchange Commission and incorporated in the state of Cayman Islands. JD.com, Inc is primarely in the business of retail-retail stores, nec. For financial reporting, their fiscal year ends on December 31st.
