JD.com Inc. (JD): Return to growth, dividend introduction and share buyback program worth billions!

JD.com Inc (JD) is a Chinese e-commerce company specializing in the sale of a wide range of products, including electronics, clothing, household goods, food and more. High inflation rates, consumer restraint among the Chinese population, growing competitive pressure and incalculable regulatory risks from the government in Beijing have been acting as negative factors for some time now.

On March 6, however, the group provided the basis for a potential turnaround. The company reported a year-on-year increase in turnover of 0.6% to $43.11 billion for the fourth quarter. The core categories of household appliances and electronics once again performed strongly. However, the company was also able to return to growth in the general merchandise segment, following setbacks in the third quarter. At the same time, EPS improved by 7.14% to $0.75. EPS of $3.12 per ADR was thus reported for the 2023 financial year. This puts the P/E ratio below 8! Investors are to share in these successes. Firstly, $0.76 per ADR is to be distributed as a dividend, which corresponds to a dividend yield of around 3.2%, and second, a new share buyback program of up to $3.0 billion is to be launched for the period up to March 2027. In retrospect, there was already approval for a share buyback program, which had been expanded to $3.0 billion by December 2021 and of which around $1.5 billion worth of shares were repurchased by 31 December 2023.

On the chart, ADRs consolidated between around $21 and $25 in the period between the end of January and the beginning of March 2024. The strong fundamental data could in turn contribute to a range breakout and initiate a medium-term recovery movement.

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