Slightly beat market expectation. In 3Q25, JD.com reported total revenues of RMB299.1bn, up 14.9% YoY, surpassing consensus estimates of RMB294.4bn by 1.6%. Non-GAAP net profit reached RMB5.8bn, 39.5% above the Street’s expectation of RMB4.15bn. GAAP gross profit grew 12.1% YoY to RMB50.5bn, with a gross margin of 16.9% (vs. 15.9% in 2Q25 and 17.3% in 3Q24). Non-GAAP operating profit came in at RMB211mn (0.1% margin), supported by higher revenue, improved gross profit, and lower G&A, partially offset by higher fulfillment, S&M, and R&D expenses.

Robust margin outlook for JD Retail; revenue growth driven by general merchandise and the 3P category. JD Retail delivered a record gross profit margin of 5.9% in 3Q25, driven by stronger 3P commission and advertising revenue, continued procurement optimization with scale efficiencies, and a favorable mix shift toward higher-margin categories. JD Retail revenue rose 11% YoY, supported by accelerating growth in general merchandise—particularly supermarkets and apparel, both achieving mid-teens growth—and strong performance in marketplace and marketing revenue, where advertising revenue grew over 20% YoY. Quarterly active users surged 40% YoY, extending the momentum accumulated in prior quarters.

Disciplined investment in food delivery, while increasing investment in Joybuy for global expansion. In 3Q25, operating loss in the New Businesses segment widened to RMB15.7bn QoQ, though the primary drag was not food delivery this quarter. Amid intensified industry competition, JD remains focused on balancing long-term expansion with group-level profit discipline. JD Food Delivery continues to optimize operational efficiency after surpassing its initial investment phase and is likely to narrow quarterly losses going forward. At the same time, JD is advancing multiple new business initiatives. Jingxi App is being revitalized to target white-label products and value-oriented consumers, while Joybuy continues its European expansion using a localized operating model. Joybuy is currently in test phases across the UK, France, Germany, and the Netherlands. The pending CECONOMY transaction remains subject to regulatory approval.

Application of AI adtech, AI agents, and automation across JD operations. Following the launch of new AI agentic products (e.g., JoyAgent 3.0 and Tatata) and industry-specific AI applications showcased at JDDiscovery 2025, JD further upgraded its retail technology infrastructure. JD Streamer supported 40K+ brands with reduced streaming costs and improved performance, while its 24/7 AI customer service system handled 4.2bn inquiries during the Singles’ Day festival. JD Logistics expanded deployment of automation robots and robovans across 20+ provinces, enhancing operational efficiency.

Valuation: Discount to Peers. Although the Trade-in program created a high revenue base—leading to a sharper-than-expected slowdown in 3C categories—JD Retail fundamentals remained resilient in 3Q25 thanks to strong general merchandise performance. JD Retail’s core business remains stable, but as trade-in benefits taper, profit growth is expected to moderate from 15–20% in prior quarters to roughly 10%. This may make sustained bottom-line outperformance more challenging versus the broader industry. Investors should also monitor losses from the New Businesses segment and assess whether investments in Jingxi and Joybuy can translate into meaningful growth. From a valuation perspective, e-commerce players are typically benchmarked using EV/EBITDA. JD trades at US$30.71 per ADS, with an enterprise value of US$32.55bn. Consensus forecasts CY2025 EBITDA at US$2.92bn (11.1x EV/EBITDA) and CY2026 EBITDA at US$5.57bn (5.8x). JD therefore trades at a sizable discount to peers, which are valued at 16x and 21x EV/EBITDA for CY2025 and CY2026, respectively.