In this file:

 

·         JD.com Smashes Q1 Earnings Forecast, Renews Platform Agreement with Tencent

·         Media Release: JD.com Announces First Quarter 2019 Results

 

 

JD.com Smashes Q1 Earnings Forecast, Renews Platform Agreement with Tencent

JD.com posted stronger-than-expected first quarter earnings Friday as the China-focused online retailer backed by Walmart and Alphabet renewed an agreement with Tencent Holdings and booked solid e-commerce sales growth.

 

Martin Baccardax, TheStreet

May 10, 2019

 

JD.com (JD - Get Report) posted stronger-than-expected first quarter earnings Friday as the China-focused online retailer backed by Walmart (WMT - Get Report) and Alphabet (GOOGL - Get Report)  renewed an agreement with Tencent Holdings (TCEHY) and booked solid e-commerce sales growth.

 

JD said revenues for the three months ending in March rose 20.9% from the same period last year to 121.1 billion Chinese yuan ($18 billion), topping the consensus forecast of 120.1 billion yuan compiled by Refinitiv. The gains brought earnings to 4.96 yuan per share, or 33 cents per U.S. listed share, the company said, well ahead of the Street consensus forecast of 12 cents per share.

 

JD.com also said it has renewed a strategic tie-up with Tencent that will give it high-level access to its Weixin platform, which, along with WeChat, attracted nearly 1.1 billion users each month over the first quarter and grew 11% from the same period last year. JD.com will pay Tencent around $800 million for the three year deal, and the online giant will also take an $250 million in JD.com's class A shares.

 

"JD.com's focus on delivering the best and most trusted online retail experience to customers throughout China drove another strong performance for the first quarter," said CEO Richard Liu. "We will continue to invest in key technologies and top industry talent as we work to reach an even broader customer base through cutting edge innovation. With our growing scale and increasingly efficient operations, JD.com remains well positioned to deliver strong shareholder value for the long term."

 

JD.com's U.S.-listed shares were marked 9.05% higher in pre-market trading...

 

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https://www.thestreet.com/investing/earnings/jd-com-smashes-q1-earnings-forecast-renews-platform-agreement-with-tencent-14955783

 

 

JD.com Announces First Quarter 2019 Results

 

Source: JD.com

via GlobeNewswire/Yahoo Finance - May 10, 2019

 

BEIJING, May 10, 2019 (GLOBE NEWSWIRE) -- JD.com, Inc. (JD), China’s leading technology driven e-commerce company and retail infrastructure service provider, today announced its unaudited financial results for the quarter ended March 31, 2019.

 

First Quarter 2019 Highlights

 

    Net revenues for the first quarter of 2019 were RMB121.1 billion (US$118.0 billion), an increase of 20.9% from the first quarter of 2018. Net service revenues for the first quarter of 2019 were RMB12.4 billion (US$1.9 billion), an increase of 44.0% from the first quarter of 2018.

 

    Income from operations for the first quarter of 2019 was RMB1.2 billion (US$0.2 billion), compared to RMB4.4 million for the same period last year. Non-GAAP income from operations2 for the first quarter of 2019 was RMB2.0 billion (US$0.3 billion) with a non-GAAP operating margin of 1.6%, as compared to non-GAAP income from operations of RMB0.8 billion in the first quarter of 2018 with a non-GAAP operating margin of 0.8%. Operating margin of JD Retail (formerly known as JD Mall) before unallocated items3 for the first quarter of 2019 increased by 0.6 percentage point compared to the same period last year.

 

    Net income attributable to ordinary shareholders for the first quarter of 2019 was RMB7.3 billion (US$1.1 billion), compared to RMB1.5 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders4 increased by 215% to RMB3.3 billion (US$0.5 billion) in the first quarter of 2019 from RMB1.0 billion in the first quarter of 2018.

 

    Diluted EPS and Non-GAAP Diluted EPS. Diluted net income per ADS for the first quarter of 2019 was RMB4.96 (US$0.74), compared to RMB1.04 for the first quarter of 2018. Non-GAAP diluted net income per ADS for the first quarter of 2019 was RMB2.23 (US$0.33), compared to RMB0.71 for the same quarter last year.

 

    Annual active customer accounts5 increased to 310.5 million in the twelve months ended March 31, 2019 from 305.3 million in the twelve months ended December 31, 2018. Quarterly active customer accounts in the first quarter of 2019 increased by 15% as compared to the same period in 2018.

 

“JD.com’s focus on delivering the best and most trusted online retail experience to customers throughout China drove another strong performance for the first quarter,” said Richard Liu, Chairman and CEO of JD.com. “We will continue to invest in key technologies and top industry talent as we work to reach an even broader customer base through cutting edge innovation. With our growing scale and increasingly efficient operations, JD.com remains well positioned to deliver strong shareholder value for the long term.”

 

“The first quarter saw solid top line growth with record breaking profitability, further demonstrating the superiority of JD.com’s business model as compared to traditional retail formats,” said Sidney Huang, Chief Financial Officer of JD.com. “JD’s commitment to providing the best value to consumers while increasing economies of scale over time was again reflected in the improving margins in our core JD Retail business. We will remain focused on customer experience and technology innovation to support our long-term profitable growth.”

 

Business Highlights

 

    In the first quarter, JD.com continued to attract premium international brands to its e-commerce platform. AEG, a renowned German manufacturer of design-focused premium home appliances, signed a strategic partnership with JD and debuted certain of its high-tech products exclusively on JD. Brands which launched flagship stores on JD recently include Swiss independent luxury watch brands ORIS, Tissot and TITONI, Italian fashion house MOSCHINO and popular New Zealand fresh food brands, Rockit and Zespri, among others.

 

    In March, JD and Michelin China signed a strategic cooperation agreement, and JD became the first direct-supply e-commerce platform for Michelin in China. Consumers who buy Michelin tires on JD will be given priority to choose Michelin’s high-end service networks such as TYREPLUS to enjoy premium installation service.

 

    During the first quarter, JD.com continued its commitment to enhancing its Environmental, Social and Governance (ESG) program. In January, JD issued a corporate social responsibility report, highlighting its commitment to global sustainability and dedication to giving back to the community. In March, JD again partnered with the World Wide Fund for Nature (WWF) in support of the Earth Hour global campaign, launching a range of sustainability initiatives across its business, including enhancements to its Green Stream Initiative, giving customers in seven cities including Beijing, Shanghai and Guangzhou, the option to select reusable packaging for an expanded range of products when placing orders.

 

    In the first quarter, JD Logistics launched China’s first rotating package handling system designed for frozen storage at its Wuhan Asia No.1 warehouse. Featuring mobile shelves which convey frozen products to staff in a separate area, the system alleviates the need for frequent trips to the freezer area and significantly enhances working conditions and efficiency as compared to traditional approaches. In March, JD Logistics also launched its self-developed visual recognition batch scanning system at its Wuhan Asia No.1 warehouse, greatly improving efficiency and accuracy at the warehouse’s receiving station. 

 

    In January, JD Logistics became the exclusive logistics service provider for China CITIC Bank, responsible for delivering bonus gifts to bank customers as they redeem reward points online. JD’s parcel delivery service has continued to experience rapid growth since its official launch in October 2018, expanding its services to fifty major cities across China to date.

 

    As of April 30, 2019, JD.com’s joint venture, Dada-JD Daojia, had partnered with over 270 Walmart stores, over 700 Yonghui stores, over 180 Carrefour stores and over 1,000 CR Vanguard stores, among numerous other leading supermarket brands, to provide customers with an integrated omnichannel shopping experience through Dada’s crowd-sourcing delivery network. In addition, JD Daojia helped over 300 offline partners digitalize their operations, resulting in significant efficiency improvements. Dada-JD Daojia is China’s leading on-demand logistics and omnichannel e-commerce platform.

 

    During the first quarter, JD expanded its leadership position in fulfillment capabilities among China’s e-commerce companies. As of March 31, 2019, JD.com operated over 550 warehouses covering an aggregate gross floor area of over 12 million square meters in China.

 

    JD.com had over 220,000 merchants on its online marketplace, and over 179,000 full-time employees as of March 31, 2019.

 

First Quarter 2019 Financial Results

 

Net Revenues.  For the first quarter of 2019, JD.com reported net revenues of RMB121.1 billion (US$18.0 billion), representing a 20.9% increase from the same period in 2018. Net product revenues increased by 18.7%, while net service revenues increased by 44.0% in the first quarter of 2019, as compared to the first quarter of 2018.

 

Cost of Revenues.  Cost of revenues increased by 19.7% to RMB102.9 billion (US$15.3 billion) in the first quarter of 2019 from RMB86.0 billion in the first quarter of 2018. This increase was primarily due to the growth of the company’s online direct sales business and costs related to the logistics services provided to merchants and other partners.

 

Fulfillment Expenses. Fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and payment processing expenses, increased by 12.4% to RMB8.1 billion (US$1.2 billion) in the first quarter of 2019 from RMB7.2 billion in the first quarter of 2018. Fulfillment expenses as a percentage of net revenues decreased to 6.7% in the first quarter of 2019, compared to 7.2% in the same period last year, mainly due to economies of scale from enhanced logistics capacity utilization and staff productivity.

 

Marketing Expenses.  Marketing expenses increased by 12.9% to RMB3.9 billion (US$0.6 billion) in the first quarter of 2019 from RMB3.5 billion in the first quarter of 2018.

 

Technology and Content Expenses.  Technology and content expenses increased by 54.0% to RMB3.7 billion (US$0.6 billion) in the first quarter of 2019 from RMB2.4 billion in the first quarter of 2018 as a result of the company’s continued investment in top R&D talent and technology infrastructure.

 

General and Administrative Expenses.  General and administrative expenses increased by 22.8% to RMB1.3 billion (US$0.2 billion) in the first quarter of 2019 from RMB1.1 billion in the first quarter of 2018.

 

Income from operations and Non-GAAP income from operations.  Income from operations for the first quarter of 2019 was RMB1.2 billion (US$0.2 billion), compared to RMB4.4 million for the same period last year. Non-GAAP income from operations for the first quarter of 2019 was RMB2.0 billion (US$0.3 billion) with a non-GAAP operating margin of 1.6%, as compared to non-GAAP income from operations of RMB0.8 billion in the first quarter of 2018 with a non-GAAP operating margin of 0.8%. Operating margin of JD Retail before unallocated items for the first quarter of 2019 increased by 0.6 percentage point compared to the first quarter of 2018.

 

Non-GAAP EBITDA6 for the first quarter of 2019 was RMB3.2 billion (US$0.5 billion) with a non-GAAP EBITDA margin of 2.6%, as compared to RMB1.6 billion with a non-GAAP EBITDA margin of 1.6% for the first quarter of 2018.

 

Others, net.  Others, net for the first quarter of 2019 was an income of RMB6.9 billion (US$1.0 billion), compared with an income of RMB1.8 billion in the first quarter of 2018. The substantial increase was primarily due to the increase of the fair value change of long-term investments of RMB4.1 billion (US$0.6 billion) compared with same period of last year.

 

Net income attributable to ordinary shareholders and Non-GAAP net income attributable to ordinary shareholders.  Net income attributable to ordinary shareholders for the first quarter of 2019 was RMB7.3 billion (US$1.1 billion), compared to RMB1.5 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders for the first quarter of 2019 was RMB3.3 billion (US$0.5 billion), compared to RMB1.0 billion for the same period last year.

 

Diluted EPS and Non-GAAP Diluted EPS.  Diluted net income per ADS for the first quarter of 2019 was RMB4.96 (US$0.74), compared to RMB1.04 for the first quarter of 2018. Non-GAAP diluted net income per ADS for the first quarter of 2019 was RMB2.23 (US$0.33), as compared to RMB0.71 for the first quarter of 2018.

 

Cash Flow and Working Capital

 

As of March 31, 2019, the company’s cash and cash equivalents, restricted cash and short-term investments totaled RMB40.9 billion (US$6.1 billion), compared to RMB39.5 billion as of December 31, 2018. For the first quarter of 2019, free cash flow of the company was as follows:

 

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https://finance.yahoo.com/news/jd-com-announces-first-quarter-104848011.html