UBS: Raises JD.com H-share target price to HKD 250 Benefiting from macro stimulus factors

UBS released a research report, believing that JD.com is most capable of seizing potential macroeconomic stimulus factors in the short term, including the home appliance trade-in program, real estate market measures, and consumer vouchers. In the medium term, JD.com may benefit from continued profit margin expansion, including a more favorable product structure and scale improvement; better procurement efficiency; earning higher advertising and commission income from third-party businesses; and improving JD.com's delivery efficiency. UBS stated that JD.com's $5 billion share buyback plan may provide support for its shares, and believes that JD.com has the greatest upside potential in terms of profit surprises and revaluation multiples. UBS also pointed out that due to expectations of more macroeconomic stimulus, the market may overlook JD.com's performance in the third quarter of the 2024 fiscal year, but may focus on management prospects, including the recovery of transaction volume for 3C electronics and home appliances, competitive landscape, speed and space for profit margin improvement, and updated buyback plans. Taking into account the above factors, UBS raised JD.com's target price for its US-listed shares from $43 to $64; and for its H shares from HKD 168 to HKD 250, reiterating a "buy" rating