JD.com Rebounds on Q4 Earnings Beat, Economic Stimulus Hype

On Wednesday, JD.com Inc.’s shares bounced back after impressive fourth-quarter earnings, and founder Richard Liu hyped economic stimulus.

The Chinese e-commerce company’s stock recovered by 16.18% to $24.91 per share on March 06 following a 6.78% two-day slide. Moreover, analysts anticipate a 1.48% gain to $25.28 apiece in the coming trading day.

JD.com reported Q4 earnings per share of 5.30 yuan ($0.74), beating analyst projections of 4.51 yuan ($0.63) by 17.52%. The figure advanced 10.19% year-over-year (YoY) from 4.81 yuan ($0.67) in October-December 2022 but retreated 20.90% quarter-over-quarter (QoQ) from 6.70 yuan ($0.93) in Q3.

Similarly, the Beijing-headquartered firm’s December quarter revenue of 306.10 billion yuan ($42.53 billion) stood 2.14% above the market consensus of 299.70 billion yuan ($41.64). It represented growth of 3.62% YoY from 295.40 billion yuan ($41.04) in the same period last year and 23.58% QoQ from 247.70 billion yuan ($34.41) a quarter earlier.

In addition, JD.com posted a 2023 full-year EPS of 15.23 yuan ($2.12), a 137.23% YoY climb from 6.42 yuan ($0.89) in 2022. Likewise, its full-year revenue of 1.08 trillion yuan ($150.60 billion) was 2.86% higher than 1.05 trillion ($145.32 billion) yuan in the previous year.

Lastly, the Alibaba competitor announced a share buyback scheme worth $3.00 billion to exploit the low share price. Its shares have fallen 13.78% year-to-date amid China’s struggling economy and consumer pessimism.

Richard Liu Says JD.com Will Benefit from Stimulus

During the earnings call, JD.com founder Richard Liu mentioned that Beijing will likely release a considerable economic stimulus to boost consumer spending. China’s economy has yet to recover from the real property crisis triggered by the collapse of Evergrande, the Mainland’s second-largest real estate developer.

In line with predictions by financial experts, Evergrande’s creditors barely recovered any of the company’s $300.00 billion debt. The incident highlighted the world’s second-largest economy’s over-reliance on its real estate sector to drive economic growth.

As a result, consumers cut their spending, forcing e-commerce platforms like JD.com to implement aggressive price cuts to sustain demand. Nevertheless, Liu added that the company may begin easing its discounts once the economic stimulus reaches Chinese households.