JD.com: 2023 Is a Year of Restructuring, Which Will Pressure Sales Growth

We have cut our estimates for wide-moat JD.com’s first-quarter revenue and full-year revenue and non-GAAP net margin to account for a greater impact from the strategy to fulfill low-margin merchandise using third-party platforms instead of the company's own first-party business, the creation of a flatter organization, and integrating the first- and third-party businesses under the same merchandise category leader. Our fair value estimate is unchanged at USD 90 per ADS and HKD 349 per share, after we cut it on March 10 to reflect business performance uncertainty. In the China e-commerce space, we prefer Alibaba for its plan to unlock value and PDD Holdings for its higher take rate expansion.