Yamato: Raised target price on JD-SW (09618) to 205 Hong Kong dollars, maintains "buy" rating.

Daiwa released a research report stating that JD.com, Inc. Sponsored ADR Class A's investment in food delivery (FD) in the third quarter of this year may be more rational after the peak in the second quarter, and there is optimism about the operating profit margin of JD.com, Inc. Sponsored ADR Class A Retail and JD.com, Inc. Sponsored ADR Class A group in the third quarter of this year. Daiwa reiterated a "buy" rating for JD.com, Inc. Sponsored ADR Class A group and raised the 12-month target price from 191 Hong Kong dollars to 205 Hong Kong dollars. Daiwa expects that the operating profit margin of JD.com, Inc. Sponsored ADR Class A Retail will further improve in the third quarter of this year, while its revenue growth remains on track. Daiwa also expects that the revenue of JD.com, Inc. Sponsored ADR Class A Retail will increase by 10% year-on-year in the third quarter of this year. Specifically, it is expected that the growth of general merchandise categories will be faster than appliances and electronics, as the latter face the high base effect of the government subsidy program from July to September. Daiwa believes that revenue growth in general merchandise categories will accelerate from 16% in the second quarter of this year to the high teens level in the third quarter, and expects the revenue growth of JD.com, Inc. Sponsored ADR Class A group to be around 12% in the third quarter of this year, slightly better than JD.com, Inc. Sponsored ADR Class A Retail. Daiwa expects that the operating profit of JD.com, Inc. Sponsored ADR Class A Retail will increase by 17% year-on-year to 13.6 billion yuan in the third quarter of this year, continuing to exceed its revenue growth rate. Due to the improvement in JD.com, Inc. Sponsored ADR Class A Retail's operating profit margin (OPM), the group's net profit for the third quarter of this year is expected to be raised to 4.2 billion yuan.