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Shares of the Chinese e-commerce giant experienced a rise despite reporting that its profits more than halved in the first quarter, primarily due to increased losses in its newer business segments, particularly its food delivery division.
The company’s stock on the Hong Kong exchange surged 6.7 percent to HKD 126.30 (approximately USD 16.13) per share by midday. Its U.S. traded shares on the NASDAQ also closed 3.1 percent higher at USD 31.49 yesterday.
Net income for the quarter fell 53 percent year-over-year to CNY 5.1 billion (around USD 750.9 million), according to its latest earnings report. Revenue increased by 4.9 percent, reaching CNY 315.7 billion (about USD 45.8 billion). Service revenue jumped 21 percent to CNY 70.9 billion (roughly USD 10.4 billion), while product sales grew by 1 percent to fill out the rest of the revenue.
New business operations—including international and food delivery services—generated CNY 6.3 billion but reported losses that widened eightfold to CNY 10.4 billion, mainly driven by investments in JD Food Delivery. Additionally, the company was fined CNY 635 million (approximately USD 93.5 million) by the State Administration for Market Regulation due to compliance issues concerning third-party bakery vendors and order transfer service providers.
In the first quarter, the company bought back roughly 44.5 million Class A ordinary shares (equivalent to about 22.3 million American depositary shares) at a cost of around USD 631 million. It also distributed approximately USD 1.4 billion in annual dividends last month, reaffirming its commitment to returning value to shareholders, according to the CFO.
The share repurchase initiative still has USD 1.4 billion remaining and is set to conclude in August of next year. The CFO emphasized that the company remains dedicated to delivering long-term value through dividends and buybacks.
The company’s overall profit sharply declined 64 percent to CNY 3.8 billion during the quarter.
Recently, JD launched its European retail platform, Joybuy, across the UK, Germany, the Netherlands, France, Belgium, and Luxembourg. As of the end of last quarter, the platform’s same-day and next-day delivery services covered over 30 key European cities, reaching more than 40 million residents.
JD Retail’s profits grew 17 percent, reaching CNY 15 billion on a 1.8 percent increase in revenue to CNY 268.6 billion, resulting in an improved operating margin of 5.6 percent from 4.9 percent.
Sales of general merchandise saw a 15 percent increase to CNY 112.6 billion, marking six consecutive quarters of double-digit growth. Conversely, electronics and home appliance sales declined by 8.4 percent to CNY 132.2 billion due to a high base effect from last year’s trade-in subsidy program. Revenue from marketplace marketing increased by 19 percent, reaching CNY 26.5 billion.
JD Logistics experienced a nearly sevenfold rise in profit, reaching CNY 1 billion, while revenue grew 29 percent to CNY 60.6 billion.
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