First Read: JD.com "1Q26 beat; more margin upside at an attractive valuation"

研报英文原文证据摘录

First Read: JD.com "1Q26 beat; more margin upside at an attractive valuation"

27E 32.78 32.66 -0 28.63

solid momentum to continue with +13% growth for 2Q. 3) JDR margin (+ve): The key 12/28E 36.81 37.28 1 34.99

driver for the result beat was from JDR with margin at 5.6% in 1Q (+0.7pp YoY), thanks

to enhanced procurement strength, mix shift toward higher ASP categories and higher- Kenneth Fong

margin 3P businesses, and GPM improvement in GM categories. While JD would step up Analyst

R&D investments, these sustainable margin drivers should underpin JDR margin steady kenneth-kc.fong@ubs.com

+852-3712 3890

at 4.6% for 2Q/2026. 4) New businesses (+ve): 1Q26 saw meaningful loss reduction

of -30% QoQ to Rmb10.4bn as food delivery sector dials back competition. Looking Sardonna Fong

ahead, we expect new business loss at Rmb9.7bn/37bn for 2Q/2026E (-34%/-20% Analyst

YoY), with faster food delivery loss narrowing but partly offset by the stepped up sardonna.fong@ubs.com

+852-3712 3042

international investment (Joybuy's official launch in Europe in Mar) and Jingxi.

Wei Xiong

What to do with the stock? Analyst

S1460518100005

Net net, this set of results reflects JD's strong control over profitability with

wei.xiong@ubs.com

meaningful room for further margin upside from: 1) Sustained margin expansion in +86-21-3866 8883

JDR: In 1Q26, JDR achieved a consistent YoY +0.7% in OPM. We expect further upside

from the current level of c4.6% toward its long-term HSD target. Despite the slower

topline (macro headwind), management tone on profit margin is positive and continues

to see more margin levers ahead including supply chain optimization, operational

efficiency improvements, as well as its high-margin 3P business. 2) Reduction in losses