A worker collects a package at a JD.com distribution center in Beijing.
GREG BAKER/AFP/Getty Images
JD.com stock edged higher on Thursday, as the Chinese e-commerce giant’s revenue jumped 31% in a better-than-expected fourth quarter.
The company’s earnings suggest the shift toward online shopping, initially driven by the Covid-19 pandemic, may be here to stay even as China has reopened and emerged from lockdown.
The U.S.-listed shares of the company made significant early gains before pulling back to trade around 1% higher into afternoon trading. China’s technology giants have had a volatile start to 2021 as Beijing has moved to curb anticompetitive behavior and issued new antimonopoly guidelines. The crackdown has increased pressure on some of the country’s leading online platforms, including Alibaba and Ant Group’s Alipay. JD.com’s U.S.-listed stock has fallen 13.5% since Feb. 16, as of Wednesday’s close, but surged in premarket trading on Thursday.
Read:Chinese Tech Stocks Are In Hot Water. It May Not Last.
China’s second-largest e-commerce company said net revenue for the final three months of the year jumped 31% to 224.3 billion yuan ($34.4 billion), beating the FactSet analyst consensus of 220.3 billion yuan. Net income attributable to ordinary shareholders rose to 24.33 billion yuan, from 3.63 billion yuan, while profit of 1.49 yuan per American depository share beat expectations.
Annual active customer accounts grew to 471.9 million at the end of 2020, compared with 362 million in 2019.
Chief Executive Richard Liu said the company was able to accelerate revenue and user growth “despite the ongoing market challenges.”
“During this quarter, JD continued its strategic transformation into a supply chain-based technology and service company with increasingly diverse sources of revenues,” he said, adding that with strong momentum into 2021 the company would continue to invest in “innovative, high potential businesses.”
Read:Emerging-Market Tech Stocks Are Getting Hammered. Why It Still May Not Be Time to Buy.
Following the successful initial public offering of its healthcare arm JD Health in December, the e-commerce giant is gearing up to list its Logistics unit in Hong Kong, submitting an application last month. It is also looking to list its fintech unit JD Digits.
Looking ahead. Chinese consumers are still flocking to popular e-commerce platforms despite the country’s businesses and shops reopening, suggesting the shift may be a permanent one. The spinoff of its logistics unit is another positive and will undoubtedly attract the interest of investors later this year.
However, with Beijing’s crackdown looming large, the volatility surrounding Chinese internet stocks may be set to continue. China’s market watchdog fined JD.com, Alibaba and Vipshop 500,000 yuan each at the end of last year for pricing irregularities. That might seem relatively small but the new rules have created uncertainty in the sector.
