Key Takeaways
JD Logistics Inc., the delivery arm of e-commerce giant JD.com, reported a 29 percent year-over-year revenue increase for the first quarter, fueled by efficiency gains and a surge in demand from external clients.
"This performance was anchored by the steady progress of JD Retail... alongside a substantial narrowing of sequential losses in our New Businesses," Ian Su Shan, Chief Financial Officer of parent company JD.com, said in the earnings release.
Revenue for the logistics segment rose to RMB 60.6 billion ($8.8 billion), according to the company's first-quarter results filed on May 12. The growth led to a more than 600 percent surge in operating income to RMB 1.02 billion, up from RMB 145 million in the same period last year. Operating margin expanded to 1.7 percent from 0.3 percent.
The results reflect the company's push to serve more customers outside of the JD.com ecosystem, with revenue from integrated supply chain customers showing significant growth. The board also approved its first-ever share repurchase plan, authorizing up to $1.2 billion in buybacks over the next 48 months, a move Daiwa analysts called a "strong catalyst for the share price."
Following the results, Daiwa reiterated its Buy rating on the stock and lifted its 12-month price target to HKD 20 from HKD 19.5, describing the company as a "hidden gem." The broker noted that while the chance of a dividend in 2026 is slim, the share repurchase program is a positive step to enhance shareholder returns.
Parent company JD.com also reported its own results, with total revenues climbing 4.9% to RMB 315.7 billion. The group's core retail operating margin reached a record 5.6%, showing resilience despite a slowdown in its electronics and home appliances division.
The strong earnings from JD Logistics and its new buyback plan signal confidence from management that the stock is undervalued. Investors will watch for continued margin expansion and the execution pace of the repurchase program in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
