JD rallies 18% on surprising beat, capital return announcements
1min read JD.com, one of China's largest e-commerce companies, reported Q4 earnings that exceeded Wall Street's expectations, sending its stock soaring on Wednesday. The positive earnings report is seen as a significant achievement for JD.com, especially considering the challenges it has faced in recent years. Investors were particularly pleased with the improved capital return program. Companies expanding shareholder returns have been rewarded this earnings season.
The company's earnings came in at 5.30 Chinese yuan (74 cents) per share, surpassing analysts' expectations of 4.69 yuan per share. Revenue for the quarter reached 306 billion yuan ($42.5 billion), a 4% increase year-over-year.
In addition to the strong earnings, JD.com announced an annual dividend of 76 cents per U.S.-listed share, up from a payout of 62 cents a share a year ago. The company also unveiled a new share repurchase program, authorizing the purchase of up to $3 billion of its stock.
The rally in JD.com's stock is a welcome respite for investors who have endured relentless pressure in recent years due to Beijing's crackdown on the tech sector and the economic slowdown in China.
Shares in JD.com have tumbled more than 50% over the past year, losing more than 25% of their value in 2024 alone. Despite the challenging environment, JD.com has demonstrated remarkable resilience, focusing on keeping costs in check and attracting shoppers with lower prices. The company's strategy of improving user experience and expanding market share has begun to pay off, with deeper and more frequent user engagement and healthier user growth momentum.
JD.com's CEO, Sandy Xu, expressed confidence in the company's prospects, stating, With the two priorities of user experience improvement and market share expansion, we look forward to creating more value for our users, business partners and shareholders in 2024.
Investors welcomed the news, sending JD.com's stock surging more than 10% in premarket trading.
The company's success in navigating the challenging environment in China bodes well for its future prospects, as it competes with other e-commerce giants like Alibaba and PDD Holdings.
Overall, JD.com's Q4 earnings report and the announcement of the new share repurchase program and increased dividend are positive indicators of the company's strength and resilience. As the company continues to focus on improving user experience and expanding its market share, it is well-positioned to capitalize on the opportunities in the Chinese e-commerce market.