CICC has published a research report expressing optimism about JD Logistics (02618) earnings improvement in 2026. The firm maintains an outperform rating with a HK$19.40 target price, which corresponds to 12.6 times and 10.8 times the 2026 and 2027 non-IFRS price-to-earnings ratios. This target suggests a 36.9% upside from the current share price, which trades at 9.2 times and 7.9 times the 2026 and 2027 non-IFRS P/E ratios.

The bank's primary observations are as follows: Second-quarter 2026 results aligned with expectations. The company reported revenue of RMB 64.10 billion, a 24.3% increase year-over-year, slightly surpassing market consensus. This was driven by a dual improvement in the volume and quality of external customers, rapid growth in international business, and high-speed revenue expansion in express delivery. Net profit attributable to shareholders stood at RMB 2.41 billion, up 13.3% year-over-year, while non-IFRS net profit reached RMB 2.64 billion, a 2.2% increase. Overall, second-quarter profitability met the bank's forecasts.

AI and automation are deepening the moat of integrated supply chain services, alongside a rise in the volume and quality of external customers. In the first half of 2026, JD Logistics increased its investment in logistics technology and its application. The company has continuously upgraded its self-developed equipment across the entire operational process, including warehousing, sorting, and transportation. These improvements in operational efficiency and service competitiveness have led to a higher quantity and quality of customers. In the second quarter of 2026, the company served 70,000 external integrated supply chain customers, a 7.0% increase, with average revenue per customer reaching RMB 146,000, up 5.2%.

Overseas warehousing and distribution demand remains highly robust, prompting JD Logistics to expand its international network. The company is capitalizing on the synergy between its own JoyExpress delivery service and the Joybuy commerce platform. Its overseas business has rapidly established its network, operating over 200 overseas warehouses across 26 countries by the end of the first half of 2026. Considering the upcoming EU tax reform for small cross-border e-commerce parcels in July, which may accelerate the industry's shift toward overseas warehouse stocking and local fulfillment, the bank expects that as JD Logistics deepens its overseas fulfillment capabilities, its international business could see significant growth and become a new growth driver.

The company is advancing a multi-brand synergy strategy, though network integration in the first half of the year is at a critical and challenging stage. CICC sees potential for improved long-term profitability. The integration of Deppon's dual networks remains in a deep phase. The bank estimates that with product structure optimization and internal management improvements, there is considerable room for profit recovery in this segment. Since 2026, the on-demand delivery business has expanded its service coverage to external customers, providing stable contributions to volume and revenue.