JD.com’s impressive growth rate continued in 2018, with net revenues hitting RMB462bn ($67.2bn), up 27.5%, and net service revenues of RMB45.9bn ($6.7bn) rising 50.5% against one year earlier.
Most headline metrics of China’s second-largest online shopping services provider were in good order, and boosted its stock market value, which has risen well over 10% since the day its annuals were released at the end of February.
Chief financial officer Sidney Huang said in a conference call with analysts that total gross merchandise volumes (GMV) grew by 30%, as the group continued to gain market share, outperforming its rivals in all the sectors where it competes.
Net service revenues contributed nearly 10% to total revenues, up from 8.4% in 2017, “as we leveraged our retail infrastructure to expand into these segments”.
Propelling a solid group performance was the number of annual active customer accounts, which in the year ended December 31, increased to 305.3m from 292.5m in 2017.
Meanwhile, revenues from general merchandise grew over 42%, Mr. Huang noted, given a “more diversified, high-quality product selection and our superior customer experience”.
As far as quarterly trends and divisional break-down were concerned, latest trends were solid.
Gross margin in the fourth quarter was 14.2% against 13% in the fourth quarter of 2017, thanks to the continued margin improvement of both JD Mall and JD Logistics, while investments in third-party logistics service continued.
“JD Mall gross margin increased over 60 basis points, mainly driven by economies of scale from the 1P business, up 38 basis points in Q3 as well as solid advertising revenue growth,” Mr. Huang told analysts, adding that “JD Logistics’ third-party business also achieved significant gross margin improvement during the quarter, as they continue to grow to scale and optimize its operations”.
Net income margin improvement was marginal (20 basis points), supported by JD Mall’s operating margin expansion of 52 basis points during the quarter and the reduced losses at JD Logistics’ third-party business.
2018 net losses from continuing operations attributable to ordinary shareholders was RMB2.5 billion ($0.4bn), compared to RMB116.8m for 2017. However, non-GAAP annual net income from continuing operations stood at RMB3.5bn ($0.5bn), compared to RMB5bn one year earlier, while year-end cash and cash equivalents, restricted cash and short-term investments totaled RMB39.5bn (US$5.8bn), versus RMB38.4bn in the prior year.
In 2018, the group established a property management company (JDPM) in order to manage its expanding logistics facilities and other real estate properties, while last month JDPM launched JD Logistics Properties Core Fund together with GIC, Singapore’s sovereign wealth fund, for a total committed capital of over RMB4.8bn.
It emerged this week that it is now selling some 500 of its goods through Google Express in the US.
Source: Transport Intelligence, March 5, 2019
Author: Alessandro Pasetti