JD-SW's Purchase of CECONOMY Under Investigation by German Authorities: Report

The analyst rating from Nomura is a Buy for JD-SW (09618.HK), despite the reduction in forecasts for revenue and EPS for FY25/26. The reasons for the rating include the acknowledgment of JD Retail's current challenges, such as a slowdown in revenue growth and declining profit margins, as well as headwinds like high base effects, reduced trade-in subsidies, and advanced consumption of electronic goods. The target price was lowered from HKD150 to HKD144 to reflect these challenges, but the overall rating remains positive, indicating confidence in the company's long-term potential despite short-term difficulties.

The analyst rating for JD-SW (09618.HK) was maintained as Overweight despite a deteriorating outlook for JD Retail's margins and a deeper-than-expected operating loss from new businesses. The broker lowered its non-GAAP net profit forecasts for FY2025 and FY2026 and reduced the target prices for both US and H-shares. However, the strong growth in daily necessities and ad services revenue, along with contributions from JD Food Delivery, contributed to the decision to keep the Overweight rating, indicating a belief in the company's long-term potential despite short-term challenges.

The analyst rating for JD-SW (09618.HK) is "Buy" based on several key factors highlighted in the report by Nomura. The reasons for this rating include: 1. Strong Revenue Growth: JD's 3Q25 results showed a revenue increase of 15% year-over-year to RMB299 billion, which exceeded market expectations by 2%. 2. Profit Performance: Despite increased investments in the food delivery business, JD's non-GAAP net profit significantly surpassed market expectations, primarily due to the robust performance of JD Retail. 3. Growth in New Business Segment: The new business segment, particularly JD Food Delivery, reported a revenue increase of 214% year-over-year, reaching RMB15.6 billion, indicating strong growth potential. 4. Target Price Maintenance: Nomura maintained its target price for JD-SW's US stock at US$43, reflecting confidence in the company's future performance. Overall, the combination of strong revenue growth, better-than-expected profit performance, and significant growth in new business segments contributed to the positive analyst rating.

The analyst rating from Citi Research appears to be influenced by the positive performance metrics reported by JD-SW during the 2025 Double 11 shopping festival. Key highlights include a record high GMV, a 40% increase in the number of buyers, and a 60% growth in order volume. Additionally, the strong sales performance of AI-related digital electronic products and a significant surge in food delivery service orders further support a favorable outlook. The anticipation of management's insights on these results and the 4Q25 outlook also contributes to the positive sentiment. However, it's important to note that M Stanley has downgraded JD.com to Underweight, citing concerns over the aftereffects of trade-in subsidies, which may reflect a more cautious view in the broader context.