China's JD.com wins big on strong Q2 earnings

2019-08-14 03:47:59 GMT2019-08-14 11:47:59(Beijing Time) Xinhua English

NEW YORK, Aug. 13 (Xinhua) -- Chinese e-commerce giant JD.com saw its stock on the rise throughout Tuesday, after the company posted stronger-than-expected corporate earnings for the second quarter (Q2).

Shares of JD.com surged 12.89 percent to close at 30.66 U.S. dollars. As of the closing bell, the online shopping platform has been valued at more than 51.4 billion dollars in market capitalization.

The rally made JD.com the best performer among the top 10 stocks by weight in the S&P U.S. Listed China 50 index on Tuesday, all of which rose with NetEase ranking the second by gaining 10.93 percent.

For Q2, the tech-driven e-commerce firm reported high growth in its net revenues, which rose 22.9 percent year on year to 21.9 billion dollars.

The quarterly profit also registered 33 cents per American Depositary Share (ADS), said its latest earnings report, beating Wall Street estimates.

The strong performance was attributed primarily to the company's highly profitable June 18 anniversary sales event, and the resilience of its business model in a highly competitive industry, according to Richard Liu, chairman and CEO of JD. com.

The Q2 revenue growth was made "despite market concerns about macroeconomic conditions and competitive dynamics," and was driven by "strong momentum from third-party logistics and advertising revenues," said the company's CFO Huang Xuande during a conference call on Tuesday.

More specifically, all major categories of electronics and home appliances saw a double-digit growth during Q2. The general merchandise categories grew by 34 percent led by FMCG (Fast-Moving Consumer Goods) products.

"Net service revenues grew by 42 percent year over year and contributed 11.2 percent of our overall revenues," Huang added.

The company was also encouraged by "a healthy growth of 11 million net additional customers," said the CFO. For the 12 months ending June 30, JD's annual active customer accounts increased to 321.3 million, a sharp rise from 310.5 million in the 12 months ended March 31.

As of June 30, the e-commerce site operated approximately 600 warehouses, covering an aggregate gross floor area of over 15 million square meters.

It also had over 220,000 merchants on its online marketplace, and over 179,000 full-time employees as of June 30.

Besides, the online retailer also built up cooperation with international merchants and brands to expand its business scope during Q2.

During the June 18 anniversary sale event, three major Italian fashion brands, Prada, Miu Miu and Car Shoe, opened first-party flagship stores on JD.com, adding to the 20 other fashion and luxury brands that have entered the e-commerce platform since April, including French apparel brands Sandro and Maje.

To enrich the platform's tailor products for specific consumers, the company established cooperation with TCL, China's leading appliance manufacturer, in April to launch three new customized smart appliances targeting the Chinese market.

Moreover, the company inked partnership with 19 international hotel brands to offer its premium members more benefits, including special discounts and room upgrades.

 

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