EUR 273.51 For Business Accounts Only

JD: Expect Better Growth In 2H2023 Due To Better Housing Growth And Better Economic Recovery

We are neutral on JD’s 1Q23 performance with inline topline as China’s retail did not experience pent-up demands. Consumers are cautious about their spending, as slower than expected economic recovery presents some level of uncertainty. Particularly, housing related categories such as home appliance did not pick up growth as recovery in the housing market was not exciting. However, we believe JD is likely to see better growth in 2Q23 due to its 20-year anniversary in June and better 2H23 benefiting from potential improved housing market. The weaker economic growth is calling for more direct policies to be in the system, which is clearly indicated in the recent highest government meeting. On April 28th, the Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation. This meeting plays a crucial role in the economic direction in the following months. It is calling internet platform companies to continue its important role in innovation and development. As such, leading e-commerce companies are going to benefit from upcoming new policies.