JD.com Inc. (JD-SW) has received a maintained "Recommended" rating. With the optimization of its revenue structure and reduced losses in new ventures, the company's FY2026-FY2028 operating revenue is projected to be 1,384.3 billion, 1,456.0 billion, and 1,522.3 billion yuan, representing year-over-year growth of 5.7%, 5.2%, and 4.6% respectively. Adjusted net profit attributable to the parent company (Non-GAAP) is forecasted to be 33.9 billion, 54.4 billion, and 67.6 billion yuan for the same periods. The current stock price corresponds to adjusted P/E ratios of approximately 9, 6, and 5 times for these years. Long-term fundamentals are supported by the resilience of its supply chain and daily necessities business. Reduced losses in food delivery and policy optimization provide flexibility for earnings, while synergies from new businesses are expected to enhance penetration across all product categories. Omnichannel integration may further drive margin recovery, supporting the "Recommended" rating.

Key financial highlights from the Q1 2026 report released on May 12, 2026, include operating revenue of 315.694 billion yuan, a 4.9% increase year-over-year. Product revenue reached 244.819 billion yuan, up 1.0%, while service revenue grew 20.6% to 70.875 billion yuan. Non-GAAP net profit attributable to the parent was 7.379 billion yuan, with a Non-GAAP net margin of 2.3%. The company announced that its 2026 "618" shopping festival would commence on May 30, marking the first participation of its European online retail brand, Joybuy.

JD Retail: Service Revenue Sustains High Growth, Retail Profitability Hits Record JD Retail's Q1 2026 revenue was 268.588 billion yuan, a 1.8% increase year-over-year. Operating profit rose 16.5% to 14.960 billion yuan, with the operating margin improving by 0.7 percentage points to 5.6%, a record high for the period. By category, electronics and home appliances revenue was 132.171 billion yuan, while daily necessities revenue grew 14.9% to 112.648 billion yuan. Penetration in categories such as supermarkets, health products, home goods, and apparel continues to increase. Service revenue growth of 20.6% significantly outpaced product revenue growth. Platform and advertising revenue increased by 18.8%, while logistics and other service revenue grew by 21.7%. The revenue structure is shifting towards higher-margin platform and ecosystem businesses, with the third-party (3P) ecosystem, advertising, and supply chain services continuing to leverage operational efficiencies. Annual active users reached a new high with strong growth in user scale and shopping frequency, and JD Plus membership saw double-digit year-over-year growth. The upcoming "618" festival will feature a "full-scenario, full-industry AI" upgrade, applying AI across operations, product management, marketing, live commerce, and after-sales service to enhance AI retail and merchant ecosystem synergy.

New Businesses: Rapid Expansion in Food Delivery with Improving Unit Economics Strategic investments in new businesses led to a 45.8% year-over-year increase in Q1 2026 marketing expenses to 15.372 billion yuan, raising the marketing expense ratio by 1.4 percentage points to 4.9%. Fulfillment, R&D, and administrative expenses grew by 18.5%, 48.6%, and 48.7%, respectively, primarily due to subsidies for food delivery, expansion of the instant delivery network, and AI technology investments. Management emphasized that JD's food delivery service is not a standalone operation but is designed to synergize with core retail through instant retail. The unit economics for food delivery have shown continuous improvement, with overall investment narrowing sequentially. The service is beginning to contribute to core retail by driving user growth, increasing shopping frequency, and stimulating cross-category consumption, potentially boosting demand in supermarkets, daily necessities, pharmaceuticals, and instant delivery. Internationally, Joybuy will participate in its first "618" festival, supported by JD's self-built logistics network covering the UK, Germany, the Netherlands, and France.

Shareholder Returns: Strong Cash Reserves Support Continued Buybacks In Q1 2026, the company repurchased approximately 44.5 million Class A ordinary shares for about $631 million, representing roughly 1.6% of the shares outstanding at the end of 2025. The company maintains a robust cash position, and near-term investments in areas like food delivery are not expected to significantly impact overall financial stability.

Risk factors include regulatory policy changes, intensifying competition in the e-commerce sector, and risks associated with overseas listing regulations.