JD.com stock rose Thursday after the Chinese e-commerce company beat earnings expectations despite muted revenue growth. It also said its chief executive is leaving.
JD
(ticker: JD) said its net revenue for the first quarter of 2023 was 242.96 billion yuan, (about $35.4 billion), up 1.4% from the same period a year earlier. It posted quarterly earnings of 57 cents per American depositary share.
Analysts had expected earnings of 51 cents per ADS on revenue of $34.79 billion, according to a FactSet poll.
JD shares jumped 6% to $37.22 in early trading on Thursday.
The company said CEO Lei Xu intends to retire in June due to personal reasons, when he will be replaced by Chief Financial Officer Sandy Ran Xu. After his retirement, Xu will serve as chairman of the advisory council.
CEO Xu is leaving after just over a year in charge of the company, having replaced JD’s founder Richard Liu in April 2022. Liu built up the company from an online sales platform for electronics into an e-commerce giant. However, it was hit hard in recent years by Covid-19 lockdowns in China.
JD said product revenue fell 4.3% during the period, compared with the 2022 first quarter, while service revenue increased by nearly 35%.
“During the first quarter, we were pleased to see service revenues grow to account for 20% of our total revenues, helping deliver strong margins and reflecting our success in attracting a record number of third-party merchants to the JD.com platform,” Xu said in the company’s earnings report.
The company said in March that it plans to spin off its JD Property and JD Industrials businesses in separate Hong Kong listings, although it intends to indirectly own more than 50% of the shares in both units.
“The major restructuring process that JD has been undergoing could be largely behind and we expect possible more disciplined balance between growth and profit,”
Citi
analysts wrote in a research note on Thursday.
Citi has a Buy rating and $68 target price on JD shares.
Write to Adam Clark at [email protected]
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