Nomura: JD Logistics (2618.HK) Encouraging 1Q results
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Nomura highlights JD Logistics' first-quarter 2026 results as encouraging, with revenue rising 12.5% year-over-year to RMB 45 billion, exceeding estimates by 2%. Non-IFRS net profit surged 45% to RMB 1.5 billion, with margin expanding 0.7 percentage points to 3.3%, outpacing expectations. External customer revenue now accounts for 70% of total revenue, reflecting successful client diversification. Integrated supply chain revenue grew 10%, driven by fast-moving consumer goods and home appliances, while express delivery revenue increased 15% on volume growth and stable pricing. Gross margin improved 0.5 percentage points to 8.5% through scale efficiencies and cost optimization. Operating cash flow reached RMB 2.5 billion with free cash flow of RMB 1.5 billion, underscoring financial health. Management guided 10–12% revenue growth for full-year 2026 with continued margin improvement. Nomura maintains a Buy rating with a target price of HK$22, citing the attractive valuation at approximately 15 times 2026 price-to-earnings ratio. The firm revised earnings forecasts upward following the strong quarter, supported by external customer expansion, robust integrated supply chain demand, effective cost controls, and healthy cash generation providing ample capacity for capital expenditure.