JD.com's stock jumps as Chinese e-commerce giant triumphs over low expectations

By Jules Rimmer

Investors will be hoping that a damaging price war in the food-delivery sector is subsiding

JD.com entered the food-delivery business in February, and margins suffered as management sought to establish a toehold in the brutally competitive market.

JD.com Inc.'s (JD) American depository receipts saw a welcome rebound in premarket trading Thursday after third-quarter results exceeded relatively downbeat analyst expectations. The stock was up more than 4.5% at one point as adjusted net income of approximately 5.8 billion yuan, or $815 million, showed a sharp fall of 56% from the same quarter a year earlier but comfortably surpassed the consensus analyst estimate of 4.3 billion yuan (about $605 million).

Citi analyst Alicia Yap said the release was "better than feared" as she reiterated her buy recommendation and a share-price target of $44 - roughly 40% above current levels. There have been concerns about the company's strategy in entering the fiercely competitive food-delivery sector, where margins are thinning and the Chinese government has expressed concerns about excessive competition among the country's corporations. The stock has declined around 10% so far in 2025.

A relatively low price-to-earnings ratio of 9 for a growing e-commerce company gives some indication of the lack of enthusiasm from investors over the initiative and the damage it could cause to profitability. Alibaba Group Holding Ltd. (BABA) and Meituan (HK:83690) have been engaged in a price war with JD.com since the latter entered the category in February, offering heavy discounts and promotions to build market share rapidly.

In the earnings call, Beijing-based JD.com's chief executive, Sandy Xu, commented that the company's food-delivery business "achieved sequential investment reduction in Q3," suggesting price competition may be less intense going forward.

Revenue beat analyst forecasts with growth of 15% to 299 billion yuan ($42 billion), with most business segments outstripping Yap's estimates. She noted that the 18.8% growth in general merchandise reflected market-share gains as well as effective cross-selling from JD.com's food-delivery initiatives.

Xu sounded a positive note on the earnings call, noting "healthy progress across our business lines" and highlighting that, as of October, the company boasts 700 million active users.

Key to a sustained rebound in JD.com's share price will be some guidance on how this year's Singles Day promotion fared on Tuesday, with media in China generally reporting a sluggish campaign that spanned several weeks rather than a one-day event. Investors will also be anxious for insight from management as to how it sees earnings panning out in 2026.

From the archives (November 2019): Singles Day - the Prime Day, or even Black Friday, of China - is driving billions in sales for Alibaba and JD.com

-Jules Rimmer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

11-13-25 0818ET