JP Morgan: Maintaining "overweight" rating on JD-SW (09618) with a target price of HK$200

JPMorgan Chase released a research report stating that they expect JD.com (09618) to outperform its peers in the next three to six months, and have included it in their list of positive catalyst observations. They believe that the company's performance in the fourth quarter of last year and this year's guidance pose an upward risk. They also believe that the impact of the trade-in policy on revenue growth will exceed expectations, and due to the company's disciplined investments, profit margins will be more resilient than expected. They maintain a target price of HK$200 and a rating of "buy". JPMorgan predicts that JD.com's revenue in the fourth quarter of last year will increase by 9.5% year-on-year, exceeding market expectations of 3%. The demand driven by the trade-in policy has eased JD.com's spending needs, and according to observations, the company's investments remain highly disciplined. Therefore, they estimate that its adjusted net profit will increase by 13% year-on-year, with an adjusted net profit margin of 2.8%. The bank forecasts that JD.com's revenue in the first three quarters of this year will increase by 6% to 7% year-on-year, and will slow down to 2% in the fourth quarter on a high base. They estimate that adjusted earnings per share will increase by double digits year-on-year. The bank believes that market forecasts have not yet reflected JD.com's policy dividend and disciplined investments.