JD.com stocks rise as online sales of Covid-Lockdown pumps in China

Updated 9:35 a.m. EST

JD.com (J.D.) – Get the report from JD.com Inc. reported better-than-expected first quarter results on Tuesday as active users approached 600 million amid a recovery in online retail activity following Covid-triggered shutdowns in some of the largest cities in China.

JD.com said non-GAAP diluted earnings for the three months ending March were 2.53 Chinese yuan per share, well ahead of consensus guidance of 1.62 yuan per share and an increase 2.5% compared to the same period last year. The group’s revenue rose 18% from a year ago to 239.7 billion yuan ($35.6 billion) and was also above Street’s consensus forecast of $35.1 billion.

Active customer accounts on its platform jumped 16.2% to 580.5 million in the 12 months to March, JD.com said, while marketing spend rose 24.4%. % to just over $1.4 billion following the addition of big names such as Starbucks. (SBUX) – Get the Starbucks Corporation report and Unilever (UL) – Get Unilever PLC report in the platform’s line-up last year.

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“JD.com’s strong supply chain capabilities and technology-driven operational efficiencies underpinned our strong performance in the quarter as we continued to generate healthy growth in a challenging external environment,” said said CEO Lei Xu. “Most importantly, we are actively leveraging our core competencies to support local communities and businesses in areas impacted by the latest Omicron outbreak.”

“All of our employees are committed to our social responsibilities and are encouraged by the growing trust placed in us by our customers and business partners,” he added. “We will continue to demonstrate our determination, resilience and commitment to contributing to society.”

U.S.-listed shares of JD.com rose 9.1% in early trading immediately after the earnings release to change hands at $56.32 apiece, a move that would pare the stock’s decline since the start of the year at around 17.7%.

Shares of JD.com, however, have been steadily falling since China-based gaming and social media group Tencent Holdings (TCHEY) sold $16.4 billion worth of shares in the e-commerce group amid Beijing’s sweeping crackdown on the country’s powerful tech sector late last year.

Tencent disclosed plans to transfer most of its stake in JD.com – approximately 457.3 million Class A shares – to existing shareholders in the form of a dividend on December 23, reducing its stake by 17% to about 2.3%, leaving Walmart (WMT) – Get the report from Walmart Inc.with a 9.3% stake, as JD.com’s lead investor.

A long-running dispute with the Securities and Exchange Commission over auditing standards also threatens to derail its U.S. listing, along with about 80 other China-based companies, amid a tougher compliance drive. by the US Public Company Accounting Oversight Board.

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David A. Albanese