TLDR
- JD.com stock increased approximately 7% in premarket trading after exceeding Q4 earnings expectations
- Q4 EPS was RMB7.42 versus RMB5.44 consensus estimate
- Revenue reached RMB347 billion, beating the expected RMB322.29 billion
- Adjusted EBITDA rose 30% year over year with improved margins
- Results suggest Chinese consumer spending is improving despite economic challenges
JD.com, one of China’s largest e-commerce companies, saw its U.S.-listed shares jump approximately 7% in premarket trading on Thursday. The surge followed the company’s impressive fourth-quarter financial results that beat analyst expectations on both profit and revenue.
The Beijing-based retail giant posted earnings per share (EPS) of RMB7.42 for the fourth quarter. This figure easily topped the consensus estimate of RMB5.44 that analysts had projected.
Revenue for the quarter reached RMB347 billion. This performance also exceeded market expectations, as analysts had forecast revenue of RMB322.29 billion.
The company reported a net profit of 9.9 billion yuan ($1.4 billion) for the quarter. This result was well above the 7.6 billion yuan that analysts had anticipated.
JD.com’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) showed remarkable growth. It increased by 30% year over year to reach 12.53 billion yuan, surpassing the estimated 11.17 billion yuan.
Profit margins also improved across key metrics. The adjusted EBITDA margin rose to 3.6% from 3.2% a year earlier, exceeding the 3.41% forecast.
The adjusted operating margin increased to 3% from 2.5% in the prior year. This result beat the 2.68% estimate that analysts had projected.
Fulfillment expenses, a key cost factor for e-commerce businesses, increased by 16% year over year to 20.1 billion yuan. This figure was slightly above the estimated 19.33 billion yuan.
Sandy Xu, CEO of JD.com, expressed optimism about the company’s performance. “We are pleased to report a strong quarter to close out 2024 amidst rebounding consumption. Our topline growth returned to double digits year-on-year, and bottom line also achieved healthy expansion,” Xu stated.
The CEO has a positive outlook for 2025
The CEO also shared an upbeat outlook for the current year. “We head into 2025 with more optimism, as consumption sentiment steadily picks up, and we continue to unlock high-quality growth potentials with our strong execution of strategic priorities.”
JD.com’s strong results come at a crucial time for the Chinese economy. Officials at this week’s National People’s Congress have been urging local governments to encourage consumption.
The Chinese government has set a growth target of 5% for 2025, matching last year’s goal which the economy barely achieved while struggling with various challenges. The country’s economic growth has traditionally relied heavily on exports, but that sector has faced difficulties since the COVID-19 pandemic.
The bursting of China’s property bubble has further damaged consumer confidence in recent years. However, JD.com’s results suggest that consumer spending in China may be rebounding.
This positive signal extended beyond just JD.com. Other major Chinese stocks also saw gains following the news. E-commerce competitor Alibaba’s ADRs rose 2.8% in premarket trading. Technology firm Tencent increased more than 6% on Wednesday, while Baidu added 1.8% in the premarket.
The broader Chinese market reflected this optimism. The Hang Seng index in Hong Kong closed 3.3% higher on Thursday, while the Shanghai Composite rose 1.2%.
JD.com’s results may indicate that government efforts to stimulate the economy and move past the property market slump are beginning to yield results. This could be particularly important as the Chinese economy potentially faces headwinds from President Donald Trump’s latest tariffs.
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