JD.com, Inc. Q4 FY2024 earnings call

• Strong Q4 and full year 2024 results: Net revenues up 13% y-o-y in Q4 to RMB347 billion, full year up 7% y-o-y to RMB1.2 trillion. Non-GAAP net margin hit 4.1%. • Category growth: Electronics and home appliances revenues up 16% y-o-y in Q4; general merchandise revenues up 11% y-o-y in Q4 and 9% for full year. Supermarket revenues in Q4 up double-digit y-o-y for four consecutive quarters. Fashion category showing better momentum. • User growth and engagement: Q4 marked fifth consecutive quarter of double-digit y-o-y growth in quarterly active customers, with shopping frequency up double-digit y-o-y for four quarters. JD PLUS members' shopping frequency grew faster. • Price competitiveness: Made headway in 2024 with improved price competitiveness for brand products and broader selection. • Platform ecosystem: 3P active users and order volumes maintained robust y-o-y increases, with marketplace and marketing revenues up 13% y-o-y in Q4. • AI and robotics adoption: Launched AI shopping assistant, deployed industrial robotics in fulfillment centers to improve efficiency and lower costs.

JD Retail: Q4 net revenues up 15% year-on-year to RMB347 billion, full year up 7% year-on-year to RMB1.2 trillion. Gross margin expanded, non-GAAP operating income increased in Q4 and full year 2024 with non-GAAP operating margin reaching 3.3% and 4%. JD Logistics: Q4 and full year revenues up 10% year-on-year. Non-GAAP operating income increased in Q4 and full year 2024, with non-GAAP operating margin at 3.5% for the quarter and full year. New Business: Q4 revenues down 31% year-on-year, full year down 28% year-on-year due to Jingxi business adjustments, resulting in widening non-GAAP operating loss.

• Expect better consumption trends in 2025 driven by domestic demand pickup and AI adoption. • Continue focus on lowering costs, increasing efficiency, and improving user experience for sustainable long-term growth. • Board approved annual cash dividend for 2024 of $0.5 per ordinary share or $1 per ADS (32% y-o-y increase). Repurchased 255 million Class A ordinary shares in 2024. • JD Logistics to further invest to handle increasing demand in 2025.

Q: How should we think about JD growth drivers over this year and next year, especially beyond near-term strength in electronics and appliances, and investment priorities for supermarket category?

A: Sandy Xu mentioned growth drivers center around user experience, cost, and efficiency. In 2025, continue proactive investment in general merchandise, user experience, and platform ecosystem. For supermarket, focus on enhancing procurement, sales, and category operation capabilities to provide more value-for-money products.

Q: Congrats on strong results. Can management share strategy and scale of investment in new initiatives like fashion, infant retail, and on food delivery?

A: Ian Shan said investments focus on supply chain capabilities and user experience. For new initiatives, on-demand retail is extension of core retail business, with focus on exploring differentiated models and enriching supplies. Food delivery is in early exploration stage with strategic and disciplined investments.

Q: What is JD's strategy on AI and deployment of large language models?

A: Sandy Xu said JD has widely adopted AI across business scenarios. Leveraging supply chain know-how and data, AI is used in search/recommendation, shopping assistant, merchant tools, and supply chain management to enhance user experience and merchant efficiency.

Q: How to think about year-over-year growth rate for electronics vs general merchandise in 2025, and shareholder return progress?

A: Ian Shan said electronics/home appliances will leverage supply chain strength to gain market share despite high base impact. General merchandise, especially supermarkets, expected to sustain robust growth. JD increased 2024 dividend by 32% y-o-y to ~$1.5 billion and repurchased shares in 2024, with ongoing $5 billion share buyback program.

Q: Thoughts on Trade-in program, subsidies, consumer sentiment, and 2025 earnings outlook?

A: Sandy Xu said government policies boost consumption, with consumer market showing steady growth. For earnings, will continue to improve supply chain efficiency in core categories, with long-term margin target at high single-digit level. 1P business model and 3P growth will contribute to margin expansion.