Chinese online retailer JD.com posted on Monday robust top-line growth for the fourth quarter of 2019, sending shares up 12% by market close.
Why it matters: The Chinese e-commerce giant has gradually been winning back investor confidence. The company’s shares hit a historical low in late 2018 after founder Richard Liu faced rape allegations in the US, compounded by other factors including intensifying competition from rivals like Alibaba and Pinduoduo and a management reshuffle.
- JD.com’s share price more than doubled in 2019, up from a low point of around $20 in the beginning of 2019 to the $43.30 per share value as of market close on Monday.
Details: JD.com’s total net revenue rose 26.6% year on year to RMB 170.7 billion ($24.51 billion) in the December quarter from RMB 134.8 billion the same period a year earlier, the company said in a statement on Monday. The revenue beat the high end of analyst estimates compiled by Yahoo Finance.
- The company’s net income attributable to ordinary shareholders was RMB 3.6 billion in the quarter ended December compared with net losses of RMB 4.8 billion for the same period a year earlier.
- Cost of revenues rose in line with revenue growth, increasing 26.8% year on year to RMB 146.7 billion in Q4, driven by the company’s online direct sales business and third party logistics services.
- Liu attributed strong customer growth to ongoing penetration of lower-tier cities. Annual active customer accounts increased 18.6% to 362.0 million in 2019, while monthly active users on mobile soared 41% compared with December 2018.
- The company expects to record at least a 10% annual growth in net revenue for the first quarter of 2020, down from a 20.9% growth in the same period of last year.
- JD warned that the 2020 Q1 estimate is subject to change in light of uncertainties related to Covid-19.
- Separately, the company’s chief financial officer Sidney Huang will retire in September. JD Retail’s finance chief Sandy Xu will take over Huang’s role.
Context: Chinese tech firms like JD.com and Alibaba have been contributing to efforts to battle the epidemic by making donations and offering support to small and medium-sized companies.
- JD.com founder Richard Liu began handing over his management roles at a number of JD subsidiaries in 2019.