FAST NEWS: JD.com Swings to Red as Revenue Growth Slows
The latest: E-commerce giant JD.com Inc. (JD.US; 9618.HK) reported a net loss of 3 billion yuan ($4.44 billion) for the first quarter, reversing a 3.6 billion yuan profit in the same period a year earlier. The company’s revenue rose 18 % to 239.7 billion yuan for the period, according to its announcement on Tuesday.
Looking up: The company’s non-GAAP net income for the period was 4 billion yuan, flat compared to the same period last year and better than the 24% to 31% decline expected by major investment banks, mainly due to revenue growth in its logistics and retail businesses.
Take Note: Looking ahead to the second quarter, CEO Xu Lei revealed that the Covid-19 Omicron variant outbreak is affecting both online and offline consumption, resulting in a significant increase in order cancellations in April. But he said the situation was improving in May.
Digging Deeper: JD’s retail revenue grew 24.6% last year to 866.3 billion yuan, accounting for 91% of its total revenue. The growth rate slowed to 17% in the first quarter of this year to reach 217.5 billion yuan, accounting for 90.8% of the total. With the prolonged lockdown of Shanghai, one of China’s largest and wealthiest cities, the company’s retail performance is likely to be affected in the second quarter. Additionally, new businesses are expected to show growing losses in the second quarter. Facing such challenges, Xu, who replaced founder Richard Liu as JD.com’s CEO in April, said he will try his best to improve the company’s results in the second quarter.
Market Reaction: JD.com’s New York-listed shares rose 4.2% on Tuesday after the results were announced. But its Hong Kong shares didn’t follow suit on Wednesday, closing down 2.5% at HK$209.4 at the midday break, at the lower end of their 52-week price range.
Translation by Jony Ho
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