JD.com posts another loss, stock falls

By Charlene Zhang
Medill Reports

Shares of Chinese e-commerce giant JD.com Inc. (NYSC: JD) dropped 5 percent Monday after the release of continuing sluggish results on Friday.

The company reported a fourth quarter net loss of $139.7 million, or 10 cents per diluted share, down 27.9 percent compared to the same period year earlier. Technology-heavy investments in an artificial intelligence initiative with Stanford University and in big-data cloud-based solutions hiked expenses by 74.5 percent to $300 million.

But revenue jumped to $16.9 billion, up 38.7 percent.

Delivery technologies including drones, robots and automated warehouses will put JD Logistics at the forefront of “operational efficiency and technical sophistication,” said CEO Richard Liu in a conference call.

Chief Finance Officer Sidney Huang said in the press release, “In 2018, we will continue to prioritize investments in technology, user experience and expanding the JD ecosystem to bring more value to our customers and business partners.”

JD continued to expand its high-end fashion offering in 2017, including partnering with Yves Saint Laurent and Alexander McQueen, buying a significant stake in global luxury fashion site Farfetch, and jointly investing in leading online fashion retailer Vipshop Holdings with Tencent.

“We think sales and contributions from apparel will increase due to the return of some apparel customers, the tie-up with Vipshop and Meili, and the expansion in the luxury business,” Chelsey Tam, analyst at Morningstar Equity Research predicted in an email after the conference call.

Huang said in the conference call that he expects the non-GAAP net margin to be between 1 percent and 2 percent in 2018.

“This will come from increasing scale in the core e-commerce and third-party business, operating leverage of new businesses like JD Logistics third-party business,” Tam added.

JD reported its annual net revenue of $55.7 billion, up 40.3 percent year over year, and swung to net income of $18 million, or 1 cent per diluted share, in 2017.

The stock closed at $43.80, down $2.41.