Daiwa: Raised JD-SW (09618) target price to HKD 120, with Joybuy as a potential next phase growth driver.

Daiwa released a research report stating that JD-SW (09618) adjusted net profit for the second quarter was 12% higher than expected, maintaining a "Hold" rating. The target price has been raised from HK$108 to HK$120, primarily based on the sum-of-the-parts valuation method. In response to improved growth prospects, the target valuation multiple for JD Retail has been increased from 3 times to 3.5 times, factoring in the market capitalization of JD LOGISTICS (02618). The firm believes that improvement or deterioration in consumer spending is the key factor affecting the sales growth of the self-operated business, while new businesses are expected to become a long-term growth driver for the group. Management indicated that sales momentum showed improvement in June, and Daiwa anticipates that year-on-year revenue growth will significantly improve starting in the third quarter. Management expects that Joybuy's investments will be increasingly orderly over the next few quarters, and is hopeful for long-term growth contributions.