JD's core competitiveness highlights and profitability remains robust

The demand, supply, and performance of the e-commerce platform were negatively impacted by the escalation of the epidemic in Shanghai and other places since April, and the static management of the sealed control area caused a total logistics shutdown. During the "618" period, the whole network sales +8.2% year-on-year, and June is likely to continue the recovery trend.

JD 22Q1 revenue is expected to be +2.9% year-on-year and Non-GAAP net margin 1.85%. CITIC Securities forecasts 22Q2 total revenue of RMB 261.1 billion, +2.9% year-on-year, of which product revenue is expected to be +1.8% year-on-year to RMB 223.6 billion and marketing service revenue +1.8% year-on-year to RMB 19.3 billion. On the profit side, despite the additional fulfillment cost due to Shanghai, the company took the initiative to reduce inefficient marketing, shrink the business of JingXiPinPin, optimize the personnel adjustment, and multiple channels to control expenses to ensure a solid profit level. 22Q2Non-GAAP net profit is expected to be 4.83 billion yuan, +4.4% year-on-year, corresponding to a profit margin of 1.85% (vs. 21Q2 1.82%).

Since July, the local epidemic repeated, it is expected that consumer demand, especially optional consumption demand recovery cycle will be further lengthened, there is uncertainty in the revenue growth rate. However, considering the company's JingXiPinPin business has been fully contracted to Beijing and Zhengzhou, new business loss reduction is expected, the main retail business marketing investment reduction, performance end of the operating leverage is steadily released, the company is expected to maintain a steady rise in the second half of the year-on-year earnings level. In the medium to long term, Jingdong's solid supply chain capabilities in extreme environments to show better than peers anti-risk ability and performance resilience, short-term protection recovery leading the industry, long-term to further strengthen the minds of users and enhance market share.