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<Research>Daiwa Cuts JD-SW's TP to HKD176, Predicts Retail Biz to Face High Base Challenges
Recommend 11 Positive 13 Negative 14 |
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According to a report from Daiwa, JD-SW (09618.HK) offered a positive surprise of a 5.9% operating profit margin in its 3Q25 retail business, while the losses from its new businesses were in line with the broker's forecast. In Daiwa's estimate, however, revenue from JD-SW's retail business will face high base challenges, particularly in the home appliance category, owing to last year's government subsidy policy and strong performance in December. Accordingly, the broker expects JD-SW's direct sales revenue to rise by only 3% YoY in 4Q25, while its operating profit margin will decline by 0.7 ppts YoY to 2.6%, as it will need to actively run promotion campaigns and bear the subsidy costs itself. Daiwa cut its 2025-26 EPS forecasts for JD-SW by 4-6% to reflect JD LOGISTICS (02618.HK)'s worse-than-expected operating income. JD-SW's target price was reduced from HKD205 to HKD176, with a Buy rating reiterated. AAStocks Financial News |
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