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Tencent Technology News, August 15, JD.com released its unaudited financial report for the second quarter and interim period of 2024 ending June 30 on Thursday. The financial report shows that JD.com's second quarter revenue was 291.4 billion yuan, a year-on-year increase of 1.2%; diluted earnings per share was 8.19 yuan, a year-on-year increase of 97.3%. After the financial report was released, JD.com's US stock rose by more than 6% before the market opened.

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In the second quarter, net profit attributable to ordinary shareholders was RMB 12.6 billion, compared with RMB 6.6 billion in the same period of 2023. Non-GAAP net profit attributable to ordinary shareholders was RMB 14.5 billion (up 69.0% year-on-year), with a net profit margin of 5.0% for the first time, compared with RMB 8.6 billion in the same period of 2023.

In the second quarter, JD.com's retail revenue was 257.072 billion yuan, compared with 253.280 billion yuan in the same period of 2023. JD.com's logistics revenue was 44.207 billion yuan, compared with 41.038 billion yuan in the same period of 2023. New business revenue was 4.630 billion yuan, compared with 7.127 billion yuan in the same period of 2023.

Cash flow and working capital

Cash flow from operating activities for the twelve months ended June 30, 2024 was RMB 74.0 billion, an increase of 40.9% from RMB 52.5 billion for the twelve months ended June 30, 2023.

Excluding the impact of consumer credit receivables included in cash flows from operating activities, free cash flow for the twelve months ended June 30, 2024 was RMB55.6 billion, an increase of 66.2% from RMB33.5 billion for the twelve months ended June 30, 2023.

Stock Buyback Program

During the three months ended June 30, 2024, the Company repurchased a total of 136.8 million Class A ordinary shares (equivalent to 68.4 million ADSs) for a total of $2.1 billion. During the six months ended June 30, 2024, the Company repurchased a total of 224.3 million Class A ordinary shares (equivalent to 112.2 million ADSs) for a total of $3.3 billion. All of these ordinary shares were repurchased from Nasdaq and the Hong Kong Stock Exchange pursuant to the Company's announced share repurchase program.

As of June 30, 2024, under the US$3 billion share repurchase plan approved by JD.com in March 2024, the company repurchased a total of approximately US$2.6 billion, with a remaining amount of approximately US$400 million.

Costs and Expenses

JD.com's second-quarter operating costs decreased by 0.4% from 246.5 billion yuan in the second quarter of 2023 to 245.5 billion yuan (approximately US$33.8 billion) in the second quarter of 2024.

In the second quarter, JD.com's fulfillment expenses (mainly including procurement, warehousing, distribution, customer service and payment processing expenses) were 17.2 billion yuan (about US$2.4 billion), an increase of 3.2% from 16.7 billion yuan in the second quarter of 2023. Fulfillment expenses as a percentage of revenue were 5.9% in the second quarter of 2024 and 5.8% in the second quarter of 2023.

JD.com's marketing expenses in the second quarter were 11.9 billion yuan (about 1.6 billion U.S. dollars), an increase of 7.3% from 11.1 billion yuan in the second quarter of 2023. Marketing expenses as a percentage of revenue increased from 3.8% in the second quarter of 2023 to 4.1% in the second quarter of 2024, mainly due to increased spending on promotional activities.

JD.com's R&D expenses in the second quarter were RMB 4.2 billion (approximately US$600 million), an increase of 3.6% from RMB 4.1 billion in the second quarter of 2023. R&D expenses as a percentage of revenue remained stable in the second quarters of 2024 and 2023, both at 1.4%.

In the second quarter, JD.com's general and administrative expenses reached 2.1 billion yuan (about US$300 million), a decrease of 9.6% from 2.4 billion yuan in the second quarter of 2023, mainly driven by a decrease in equity incentive expenses. General and administrative expenses as a percentage of revenue were 0.7% in the second quarter of 2024 and 0.8% in the second quarter of 2023.

Executive Comments

Ms. Ran Xu, CEO of JD Group, said: "In the second quarter, we continued to focus on the sustainable and high-quality development of our business. We continued to strengthen our supply chain capabilities and user experience, helping JD establish differentiated capabilities in China's e-commerce industry. Through the continuous improvement of scale effects and procurement efficiency, we provide users with everyday low prices while ensuring quality. Combined with the increasingly prosperous platform ecosystem, these developments have been recognized by users. The number of users grew steadily in the second quarter, and user engagement continued to improve. In the future, we will continue to focus on our own advantages, focusing on user experience, price competitiveness and platform ecology, laying the foundation for sustainable business growth. "

JD Group Chief Financial Officer Shan Su said: "In the second quarter, we achieved a year-on-year revenue growth of 1.2%, among which the performance of electronic products and home appliances categories was affected by the high base of the same period last year, while the daily necessities category, especially the large supermarket category, maintained strong growth. During the big promotion season, we continued to improve our price competitiveness through supply chain capabilities and disciplined investment, rather than relying on subsidies. Thanks to this, JD's gross profit margin in the second quarter increased significantly by 137 basis points year-on-year to 15.8%, helping this quarter's non-GAAP operating profit and net profit to reach historical highs. High-quality performance, coupled with the acceleration of share repurchases, highlights JD's firm commitment to creating long-term value for shareholders." (Translated by Jinlu)