Chinese e-commerce giant JD.com Inc (9618.HK), topped Wall Street estimates for quarterly revenue on Tuesday as lockdowns in China to curb the coronavirus increased online shopping and the company’s “618” shopping event.
The company posted second-quarter revenue of 267.6 billion yuan ($39.07 billion), a 5.4% rise year on year, beating analysts’ average estimate of 262.31 billion yuan, according to IBES data from Refinitiv. Revenue jumped 11% in the first six months to 507.3 billion yuan.
Sales in its product segment, which contains online retail sales, jumped 2.9% in the quarter, while those from services such as marketing and logistics rose 21.9%. Lenny Zephirin, Zephirin Group analyst, said JD.com is in a rank of its own as timely contractual agreements with luxury brands were crucial to its profit beat in the quarter.
“We expect management to continue to push further into the Luxury categories for the upcoming holiday quarters, (particularly) the fourth quarter. The logistics segment should show a gradual improvement this quarter despite COVID-19 lockdowns.”
Several Chinese cities including financial hub Shanghai encountered different levels of lockdowns in the second quarter which severely suspended transport.
“The second quarter is the most challenging quarter since we’re listed,” JD.com Chief Executive Xu Lei said on a call with analysts before the U.S. market opened. He said the challenges were largely caused by the pandemic.
JD.com said net income ascribable to ordinary shareholders climbed to 4.38 billion yuan, or 1.37 yuan per American Depository Share (ADS) for the three months ended June 30, compared with 794 million yuan, or 0.25 yuan per ADS, a year ago.
Excepting one-off items, the company reported a profit of 4.06 yuan per American ADS, against analysts’ expectations of 2.71 yuan.Buy Crypto Now
JD Logistics, which runs over 1,400 warehouses and hires more than 200,000 in-house delivery personnel, is also extending its footsteps overseas. Its first automated warehouse in the United States, “Los Angeles No. 2”, was set up in June.
Rival Alibaba (9988.HK), exceeded expectations at the start of this month, even as it posted slow quarterly revenue growth for the first time in its history. Morningstar said in a research note published earlier this month:
“We like JD the most amid the zero-COVID-19 policy. Its self-owned logistics gives it more control over delivery relative to competitors.”
($1 = 6.8495 Chinese yuan renminbi)