China’s JD.com posts higher Q3 profit as supply snarls ease

CHINESE e-commerce firm JD.com reported quarterly revenue below estimates on Wednesday (Nov 15), but posted a surge in profit as supply chain problems eased.

US-listed shares of the firm rose 5.6 per cent to around US$28 in premarket trading.

The company also said that CEO Xu Ran will take up the role of chief executive of JD Retail, its retail business.

The company has seen challenges in China’s rapidly changing e-commerce landscape, with the joining of livestream players and short video social networking service providers such as Douyin, which is China’s TikTok, and Xiaohongshu.

JD.com has fewer popular livestreamers than its competitors, such as Austin Li, who exclusively streams on Alibaba Group’s platform.

The company’s shares were trading at about US$60 at the beginning of this year but ended at US$26.71 on Tuesday. In October, several banks and brokers including Citi, Daiwa and Jefferies cut price targets and revenue growth forecasts for the firm.

JD.com and Alibaba both reported year-on-year sales growth for China’s largest shopping festival, Singles Day, which ended at midnight on Saturday.

However, according to third-party data provider Syntun, the cumulative gross merchandise volume (GMV) across major traditional e-commerce platforms – including Alibaba’s Tmall, JD.com and Pinduoduo of PDD Holdings – was 923.5 billion yuan (S$171.9 billion), a 1 per cent decline from the previous year.

The company reported net revenue of 247.7 billion yuan (S$46.1 billion) for the third quarter, missing analysts’ average estimate of 249.26 billion yuan according to LSEG data.

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But it posted net income attributable to shareholders of 7.94 billion yuan, up 33 per cent from 5.96 billion yuan a year earlier. REUTERS