JD.com earnings and update

A year ago, I published my review and thesis of JD.com, a Chinese e-commerce company and Challenger to Alibaba and PDD.

It follows the Amazon business model, even though the founder claims that they don’t and that they have a unique philosophy. Sure, the competitive environment in China is more difficult than the Amazon competition in the west.

Nevertheless, the valuation was ridiculous and the company remains impossible to displace.

The stock is slightly down over the period. It is fair that I review the company results and developments.

As a reminder, JD is a Chinese e-commerce company that is not number one in the market (Alibaba and PDD plus Tiktok shop), but has an integrated, high quality and fast delivery business model.

In my article, I argued that an older, richer China will eventually tend to favor this type of shopping experience over “the scrape for pennies” and gamified gaming of PDD and the less quality controlled Alibaba.

China still has a lower GDP per capita than Mexico and sits between Malaysia and Argentina.

Imagine the potential. Investors already tend to see China as a no growth developed country and this is a big misconception.

In Q2, JD grew revenues at a 12% CAGR in the past five years, and saw a decrease in 2026.

Net revenue was down -2.9% Yoy in Q2 2026.

• JD Retail is -5%, with a small decrease in operating income.

• JD Logistics is a good growth story, with 24% growth and a 16% increase in operating income (I reviewed JD Logistics last week).

• New business was down 45% but the loss, still important, is down 33% but remains substancial at 9,9 Billion RMB.

There was a reclassification of new business to JD logistics, therefore the decrease is lower in reality.

If we look at specifics, it is impacted by a subsegment: electronics and appliances.

The appliance revenues benefited from government subsidies in Q2 2025, therefore having revenues go down in this segment is normal, after the government subsidies.

New business:

When I reviewed JD, the new business of food delivery was not even really started. It had a dramatic rise but created huge losses due to competition in food delivery. I did not like it, but it does not affect the long term of the company.

The food delivery is JD entering not only into food delivery but instant commerce, with orders delivered within 30 minutes. This creates huge losses in the short term but also brings new active users to the ecosystem.

In Q2, New business had a more than 50% reduction in losses in food delivery. The company is “confident that the food delivery business will continue to see meaningful year-on-year loss reduction throughout the rest of the year.”

Joybuy, the competitor to Amazon in western Europe, “delivered encouraging sequential revenue growth in Q2 as our overseas supply chain strength and differentiated service offerings continue to gain traction among European consumers. While absolute operating loss expanded as Joybuy entered a rapid scaling phase, its loss margin narrowed sequentially”.

Joybuy is probably going to be loss making for several years but is building an exciting business. Unfortunately I cannot test it in my country of residence.

Jingxi group buying platform is in its infancy but experiencing strong growth.

Profitability

Recent investments in new businesses reduced the profitability of the group from a peak 4.1% in 2024 to 2.1% in 2025. The profitability is recovering to 2.6% as of Q2 2026, and we expect it to continue to grow in 2026.

“On JD Group’s profitability, Q2 marked a clear inflection in its trajectory, returning to healthy year-on-year expansion. Looking ahead to the second half of the year, supported by core business health and investment discipline, we are confident in driving accelerated profit growth at the group level.”

Investing in a long term growth company like JD is not an investment in quarters. It is an investment in decades. This is similar to an investment in Walmart or Amazon. I don’t want to predict that JD will be as successful as Amazon, but it is a similar investment, with a strong core retail business and many start up businesses that are starting now, with aims to become profitable in 5, in 3 or even 10 years only.

Shareholder returns:

On buybacks, we have repurchased around 17% of our outstanding shares since 2023.

Conclusion and investor psychology

When investing like this, you need to remember to have infinite patience and a cool head.

In the mean time, enjoy the shareholder returns in terms of dividends, and benefit from the buybacks.

The valuation is at 7 times forward earnings, despite losses in new initiatives. 4.3 times EV/EBITDA A complete bargain for a great business.

I heard many people saying “BUT.. BUT”. I hear these people all the time.

There is always a “BUT” when people are not value investors but trend followers.

The value investor buys when it is cheap. Holds, and has a large winner when the narratives turn from fear to apathy.

I have many such winners that were hated at the bottom. After they double or triple, they are not hated anymore but seen as regular stocks, and nobody talks about them anymore.

There are many other investments with similar risk rewards in my portfolio and premium section of the newsletter: it is available for upgrade below.

I don’t really have too much things to write about JD, the thesis was the same 5 years ago, 1 year ago and it will be the same in 5 years. Entry valuation matters as much as holding philosophy.

Disclaimer: This is not an investment recommendation. Please do your own due dilligence before taking any investment decision.