JD.com's Revenue Surges to Three-Year High, Shares Fall on Profit Drop
JD.com, a leading Chinese e-commerce company, has reported mixed results for the second quarter. While revenue growth surged to a three-year high, shares fell following the earnings release.
JD.com's revenue grew by a robust 22.4% year over year in the second quarter, reaching 356.66 billion yuan ($49.4 billion). This figure exceeded market expectations and marked the company's fastest revenue growth in three years. Notably, this growth rate was a significant improvement from the previous quarter, where revenue growth was a mere 1.2%, the slowest pace since 2020.
However, JD.com's shares fell by 2.9% in U.S. trading after the earnings release. Despite the impressive revenue growth, investors may have been deterred by the company's net profit decline. Net profit attributable to ordinary shareholders dropped by 50.8% to 6.2 billion yuan ($860 million), primarily due to substantial investments in new ventures.
JD.com's second quarter saw a significant acceleration in revenue growth, driven by strategic investments and expansions. However, net profit fell due to these heavy investments. The company's majority shareholder, Max Smart Limited, and investor Convergenta Invest, are key stakeholders in these ventures. Despite the share price drop, JD.com's non-GAAP net profit of 7.4 billion yuan ($1.03 billion) still beat analyst forecasts, indicating potential for future growth.
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