JD.com Inc. posted its fastest revenue growth in almost three years after Beijing policies helped shore up consumer spending across the world’s No. 2 economy.
The company’s shares rose more than 4 percent in pre-market trading after reporting a much better-than-projected 13 percent rise in sales to 347 billion yuan ($47.9 billion) for the December quarter. Net income also more than doubled to 9.9 billion yuan.
JD’s strong results follow Alibaba’s better-than-anticipated numbers last month, underpinning a more buoyant mood among Chinese tech companies after Beijing signalled renewed support for the private sector.
Longer-term, JD is considered among the prime beneficiaries of Beijing’s shift to consumption-led growth, a major change in policy driven in part by global macroeconomic uncertainty. The Chinese government introduced incentives for purchasing or replacing home appliances and electronic devices around the second half of 2024. JD should also have benefited from a longer November Singles’ Day shopping season last year.
Executives noted China’s economy — still recovering from a Covid trough — remain challenged. But they sounded an upbeat note for the commerce business.
Beijing will “soon” publish its action plan for a special program to boost consumption, said Zheng Shanjie, chairman of the National Financial Regulatory Administration, China’s top economic-planning agency. A state fund will be set up to guide investment in startups, he said Thursday, as the country doubles down on promoting technological innovation.
“The momentum was broad-based across multiple categories and revenue streams, reflecting positive macro consumption trends and JD’s expanding market share,” Chief Financial Officer Ian Su Shan said in a statement.
JD’s return to solid growth is boosting its ability to pursue new initiatives.
This year, the company launched JD Takeaway — entering a food delivery arena dominated for years by Meituan. Some investors have raised concerns about the impact on profitability, already dented by an ongoing price war with PDD Holdings Inc. and Alibaba.
On Thursday, executives declined to shed light on the capital investments involved, except to say they will remain strategic, maintain cost discipline and adjust the pace of expansion as needed.
By Bloomberg News
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