The results may indicate that China’s consumers are bouncing back from economic challenges
U.S-listed shares of Chinese e-commerce company JD.com (NASDAQ:JD) fell 6% early Thursday morning despite positive signals from JD.com’s third-quarter 2024 financial results.
JD.com delivered 5.1% year-on-year revenue growth and 29.5% growth in the company’s income per American Depositary Share (ADS).
The big-picture takeaway from JD.com’s Street-beating results may be that China’s consumers are bouncing back from economic challenges.
In the immediate term, though, investors might not be convinced that China’s economy is out of the woods even though JD.com delivers better-than-anticipated quarterly data.
JD.com CEO touts “healthy profitability”
For the third quarter of 2024, JD.com CEO Sandy Xu noted an “uptick” in the company’s top-line growth as well as “healthy profitability.”
The quarterly data seems to support Xu’s confident assessment. For one thing, JD.com’s revenue grew 5.1% year over year to the equivalent of $37.1 billion, beating analysts’ consensus estimate of $36 billion.
Furthermore, JD.com reported adjusted (non-GAAP) diluted net income of $1.24 per ADS, easily surpassing Wall Street’s call for $1.05 per share. This result represents 29.5% year-on-year bottom-line growth for JD.com.
Xu claimed JD.com delivered these quarterly results “as overall consumer sentiment continued to brighten”.
Moreover, Xu observed an “enthusiastic user response to our Singles Day Grand Promotion this year”, referring to the important annual Chinese shopping event.
Analysis: Why JD.com stock fell despite positive results
Sometimes, respectable sales and income growth just aren’t enough to quell the market’s fears. In the case of JD.com, some investors may still be deeply concerned about China’s struggling housing market and wavering consumer sentiment.
Even while Xu spoke of China’s brightening consumer sentiment, JD.com didn’t provide formal fourth-quarter 2024 sales and income guidance. This likely prompted JD.com stock traders to question whether the company is as optimistic as Xu’s remarks would suggest.
Most of all, investors are probably seeking further confirmation that China’s economy and consumers are firmly on track to recovery. For the time being, then, JD.com and its stock remain a “show-me” story for some skittish traders.
