In "Major Banks," China International Capital Corporation (CICC) lowered JD.com's target price to $33 and maintained an "Outperform" rating

CICC published a report stating that JD.com (09618.HK) had revenue in the fourth quarter of last year that was basically in line with market expectations, while profits exceeded market expectations. Revenue increased by 1.5% year-on-year to RMB 352.3 billion, which was basically in line with market expectations; adjusted net profit was RMB 1.1 billion, exceeding market expectations by RMB 500 million, mainly driven by better-than-expected retail profit margins, with an adjusted net profit margin of 0.3%. In the fourth quarter, the company executed a buyback of USD 1.5 billion, with a total buyback amount of approximately USD 3 billion planned for 2025, leaving a remaining buyback quota of USD 2 billion; the company announced a cash dividend of approximately USD 1.4 billion for 2025.

The firm expects JD.com's retail operating profit margin to remain stable in 2026, with food delivery expected to continue reducing losses. In the fourth quarter, JD.com's retail operating profit margin (OPM) slightly decreased to 3.2% compared to the same period last year, which was better than market expectations, mainly because the company leveraged its supply chain capabilities to continuously improve retail gross margins. The firm expects JD.com's retail OPM to remain stable year-on-year at 4.8% in the first quarter of this year. The operating losses of new businesses in the fourth quarter narrowed slightly quarter-on-quarter, with increased investments in Jingxi and international business, while losses in food delivery improved. Considering the company's expected total investment in food delivery in 2026 will be lower than in 2025, and the firm expects Jingxi and internationalization to expand investments under controllable conditions, it is estimated that new business losses will reach RMB 44.4 billion in 2026, with the group's overall adjusted net profit margin at 2.4%.

Taking into account the investment situation of new businesses in 2026, the firm has lowered its adjusted net profit forecast for 2026 by 7.5% to RMB 33.4 billion. However, looking ahead, new businesses may gradually reduce losses, and the forecast for 2027 has been raised by 12% to RMB 42.7 billion; the "outperform industry" rating is maintained, and considering the overall sentiment in the sector, the target price for JD.com (JD.US) in the US stock market has been lowered by 19.5% to USD 33. The "outperform industry" rating is maintained