Key Takeaways
JD.com Inc. is expected to report a 56% drop in first-quarter adjusted net profit to a median of RMB 5.66 billion, according to a survey of 17 brokers, as heavy spending on new growth initiatives weighs on margins.
"CICC forecasts a 53% year-over-year decline in non-GAAP net profit to RMB 5.97 billion, with revenue rising 4.5%," the investment bank said in a note, reflecting the broad consensus ahead of the May 12 earnings release.
The survey projects first-quarter revenue between RMB 309.7 billion and RMB 315.1 billion, a median 3.4% increase from the prior year. The sharp profit decline reflects ongoing losses from new businesses, including an aggressive push into food delivery, which have offset faster growth in the company's general merchandise segment.
The results will test investor belief in JD.com's long-term growth story against near-term profitability pressures. While the forecast is bearish, some analysts see a path to a higher valuation, with one projection citing a potential fair value of $45.26 based on revenue reaching CN¥1,517.4 billion by 2028.
The market is intensely focused on the costs associated with JD.com's expansion into new, competitive sectors. Analysts at Citi estimate a 1Q26 operating loss of RMB 10.8 billion for new businesses, though they note this would be an improvement from the previous quarter. The performance of JD Retail is expected to be stable, but with a clear divergence between a 14% rise in general merchandise sales and a 9.5% decline in the electronics division, according to CICC estimates.
This dynamic highlights the core challenge for JD.com: funding its high-cost growth initiatives while its main e-commerce engine faces its own pressures. Recent bullish analyst revisions and increased hedge fund interest, as noted in market reports, suggest some investors believe the company's core logistics and e-commerce strengths can overcome the drag from these new ventures.
The sharp profit decline highlights the cost of competing in new sectors like food delivery. Investors will be watching the May 12 earnings call for management’s strategy on balancing these heavy investments with a return to margin growth and shareholder returns.
This article is for informational purposes only and does not constitute investment advice.
