Analyst Note| Chelsey Tam |
We like JD’s existing and new users’ increasing stickiness to JD’s platform, the improving 3P platform performance and Jingxi’s business update and strategy. We have reduced this year’s net margin on a non-GAAP basis to eliminate the higher base last year due to the social insurance rebate and to a lesser extent the potential of higher losses from Jingxi and JD Logistics. Outer-year non-GAAP net margin remains unchanged. JD is a buy with a fair value estimate of USD 106 per ADS and HKD 411 per share, up 6% from before as we roll our model.