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/Voting power FY1
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BR 7.6 7.6 7.0 6.3 5.2 (x)
/
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大股东 ADR %
US Price 目标价
Guotai Junan International Junan Guotai $)
index 价：
DP 每股股息 /
投票权 ( ( RMB :
/ADR 0.000 0.000 0.000 0.000 0.000 0.000 %
) (15.39) (21.65)
28.15 1
)
个月
1 M
Richard Liu Liu Richard 2015 September 1 [email protected] 股息率 Ray Zhao Ray +86 755 23976755 (18.94) (25.55) 32.29 Yield 3 .
(%) 个月 0.0 0.0 0.0 0.0 0.0 0.0 3 M 中性
US
US 1 Neutral 净资产收益率
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29
Company Report JD.com Inc.京东（JD US） GTJA Research 国泰君安研究
Se Statements Financial Valuation Financial Analysis Development JD Diversified JD B2CRetail Ecommerce Company Profile e Shareholder Structure Shareholder Quarter Expansion Category Finance JD Competition Ecommerce Retail Management Net Profit Net Profit Operating Profit Gross Revenue JD Home Ecommerce B2C Retail Milestones th e las t page
...... ly ......
...... Result fo
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Page 26 24 19 14 17 23 22 22 27 13 28 22 4 9 4 5 3 3 5
2 of of 29
Company Report JD.com Inc.京东（JD US） 1 September 2015
just startedjust business in 1 Through according to iResearch, a third- n strategy to has executed diversification strategy on of newlymilli issued ordinary shares from Bitauto. Bitauto's newly issued ordin ary shares agreements definitive into entered have they that a Internet contentInternet and services marketingChina's for fast authentic products at competitive prices which are delivered in a speedy and reliable manner. manner. reliable and speedy a in delivered are which prices competitive at products authentic Se Yonghui Supermarket. 10% around have will JD investment (601933.CH) to explore O2O fresh market nationwide. Currently, Yonghui Supermarket has 430 stores in China. After the JD hasunced anno to RMB4.3bninvest in Yonghui Supermarket. largest shareholder. Following the transaction, JD.com Tuniu of price trading approximate average closing US$16.00 per ADS, or the equivalent of approximately US$5.33 per Class A ordinary share, which represents the US$100 inmillion resources part as of the two companies’ announced jointly strategic agreement. The purchase price will be of US$350total newlymillion issued Class A ordinary shares Tuniu of through a combination US$250of inmillion cash and the for investors US$500 of sale of in million newly issued a group Class A ordinary shares with aggregate. in agreements definitive into entered has it that announced China, in company JD has become the largest shareholder of Tuniu. for channels on JD.com's e US expandsJD categories M& through a.m provide low price quality products to customer distributor Jingdong (JD US) ( Company Profile of of the agreements. In addition, JD.com and Tencent wi represen price purchase correspondingshare, US to Bitauto, JD.com and Tencent a 2Q14 Korea and in ensure customer satisfaction, satisfaction, customer ensure delivered in the the in delivered “ transaction services to car buyers across China. across buyers car to services transaction Upon completion of the transactions, the three companies will work together to provide enhance ("YiXin Capital"), a subsidiary of Bitauto primarily engaged in e approximately US Capital. YiXin of s share preferred A series issued selection, speed, quality, value nnounced Milestones e
D
a total of approximately US . th , , the package could be delivered in the evening; if 400 milli 400 . e n
- ptions and comprehensive customer services. In order to have better control over fulfillment and to to and fulfillment over control better have to order In services. customer comprehensive and options payment person las
SK Group
JD t s page
i Be in to inject its QQ Wanggou and Paipai.com ’ s on in cash and approximately US approximately and cash in on
content fo next r jing Zhongguancunjing (
D disclaimer and 1.3 billion in cash and resources, and investments totali investments and resources, and cash in billion 1.3
“JD
day. day.
-
began to expand to cloth to expand to began rich andrich user -
ts the average closing trading price Bitauto'sof ADSs for the twenty trading days prior to the signing commerce sites including mobile apps andadditional support from its key platforms, ) is t ”) is st
tier cities. JD Finance and JD Home will be JD be will Home JD and Finance JD cities. tier
I n terms of transaction volume transactionterms of n
D
73.31 per American Depositary Share of Bitauto, each representing one ordinary share. The JD he largest online direct sales company in China in company sales direct online largest he D party market research firm. research market party ” . In 3M10, JD began to provid to began JD 3M10, In . 1.15 billion of newly issued ordinary shares from Bitauto from shares ordinary issued newly of billion 1.15
has builthas nnounce might
in interest - friendly website www.jd.com and mobile applications, JD 中 A and cooperation with strategic partners.
JD Finance and JD H 关村 hold approximately 27.5%of
up d ) and in 2006
their s D trategic trategic s Yonghui Supermarket and will appoint 2 directors into the board of directors in in directors of board the into 2 directors appoint will and Supermarket Yonghui es 750 million
with fast express express fast with
Under the terms of the agreements, JD.com agreements, the of terms the Under
and and own nationwide fulfillment infrastructure and last and infrastructure fulfillment nationwide own 's ADSs for the 20 trading days prior to the signing of the agreements.
In In .
in shoes - May2015 8, growing JD.com and Tencent p ll invest US invest ll
to to a artnership
,
JD
JD 350 for JD ha JD buyer places buyer of JD
category. In 11M14, JD began to sell books.
turned to online 3C product distributors. JD o e211 delivery d car use and new the to access exclusive including resources,
me. Currently, JD Finance has 6 channels and JD Home has provide automotive industry, JD.com, and Tencent jointly announced - commerce d
service % 23.5 D
– Tuniu in Jan 2015 100 million and US and 100 million
s mn shares, mn Tuniu (Nasdaq: TOUR), a leading online leisure travel travel leisure online a leading TOUR), (Nasdaq: Tuniu c
’ onsumers an s new growth
JD tried to cooperate with Yonghui Supermarket
ng US ng market share market ’s outstanding shares and become the Company’s and satisfy and -
services related automotive financing platform business. business. platform financing automotive related order before 11:00 p.m., the package could be As part of the agreements, JD.com agreements, the of part As has D
. 250 mi representing
.
Bitauto with In 5M10,In JD acquired JD was one of the largest IT chain store : if ma ing ing driver
a de an enjoyable online retail experience. experience. retail online enjoyable an in Ch in
D llion in cash in YiXin Capital Limited Limited Capital YiXin in cash in llion d purchase also Tencent . buyer places buyer after sales service. JD service. sales after
150 million, respectively, in newly newly in respectively, million, 150 ( BITA investments in Bi in investments JD JD
in next 2~3 years. years. 2~3 next in
ina B2C ecommerce in 1Q15 in ecommerce B2C ina has were
- pre its of 15% also offer also
offer US - invest mile delivery network delivery mile priced at US at priced ), a ), leading provider of
s an donline automotive ’ ed a wide selection of of selection wide a s core strategy is to to is strategy core s Tencent Tencent s
order before11:00 Qianxun.com convenient online
a combination of of a combination as considerationas IPO shares IPO tauto totaling issuance and
purchase
’ D Page s slogan is is slogan s
( 00700.HK) 73.31
US 3 D
of of from from . 150
per per d JD 29
in in a ,
Company Report JD.com Inc.京东（JD US） 1 September 2015
Se respectively. 6.5% and 11.0%, 15.2%, 18.0%, shares, 19.4% of total shares, wit for ( Tencent isLiuthe Qiangdong largest shareholder. t from degree EMBA an and Beijing in China Europe International China of Business School. University People's from sociology in degree bachelor's a received Liu Mr. e CCTV, from Year" the of Person Economic China's largest nationwide China television "2011 network. Mr. Liuthe has award in received numerous other awards for his prestigious achievements the received Liu Mr. 2011, December In then. since launched his onlinefirst retail website. He founded JD business later that year and has guided JD development and growth own business Beijing,in which was mainly engaged in the distribution of magneto- inception. QiangdongRichard Liu Source: Table - Shareholder Structure Management commerce industry China,in such as "2011 Chinese Business Leader" and Fortune "2012 China's Chinese Businessman." e
a th
May May May May Aug Nov Nov Nov Dec - Feb Mar Feb - Feb Feb Mar - Jan - Jun consideration of 175.8 Jan Jan Jan - Jun - Jun Jun Jun Jan Jun Jun Oct Apr Apr Apr Apl Date Date e Jul Jul Jul
1 the las ------Milestones JD : 14 15 15 12 09 08 13 07 15 13 13 12 09 11 10 05 10 15 15 14 12 11 11 10 09 07 04 01 98 11 14 10 11 07 07 Company, Guotai Junan International. International. Junan Company, Guotai t
00700. HK) has become akey strategic shareholder of JD. Tencent injected QQ andWanggou Paipai.com
page Mr. Liu has over 15 years of experience in the retail and e- and retail the in experience of years 15 over has Liu Mr. Launch Cash on Delivery (COD) mode. (COD) onDelivery Cash Launch Gain USD21mn VC investment from Capital Today Group, Bull Capital, and Francis Leung. Francis and Capital, Bull Group, Today Capital from investment VC USD21mn Gain Goods. White to category Expanded Establish Establish JD listed in NYSE. Kingdee Announces Strategic Investment from JD.com from Investment Strategic Announces Kingdee Guangzhou and Shanghai, in Beijing, centers logistics up50k Built 300. reached processed order Daily Gained USD10mn VC investment from Capital Today Group. Today Capital from investment VC USD10mn Gained JD.com Launches JD Worldwide Cross Worldwide JD Launches JD.com JD Initiative Foods Imported Major Launches JD.com Bitauto, Tai Chow as such brands, fashion lots of Introduced openplatform. for jos.360buy.com Established ticket train and services Booking Hotel Provided wit Cooperated online service. music JD and reading JD Open Sales after 100Score Provided 20000. reached processed order Daily www.360buy.com Established www.jdlaser.com Established IT largest the oneof Became Dong. Jing Established Liu Qiangdong Event Registered user accounts reached 100mn. 100mn. reached accounts user Registered Alwaleed. Prince from Co. Holding Kingdom and Plan Pension Teachers’ Ontario from investment USD700mn Gained Licenses. Express Gained Suqian. in Jiangsu Call Center JD Established expand category to luxury goods. luxury to category expand to www.360top.com Established books. to category Expanded 500. reached processed order Daily Provided Open Platform to domestic brands. domestic to Platform Open Provided Open package GIS service. GIS package Open Tencent Tencent s service 211delivery Provided Gained 3rd around USD1.5bn V USD1.5bn around 3rd Gained
announced to invest in Tuniuwith USD250mn and gained 27.5% shares. shares. 27.5% gained and USD250mn in Tuniuwith invest to announced fo
r
JD.com and Tencent Announce Strategic Partnership Strategic Announce Tencent and JD.com a disclaimer Finance JD ced nnoun h Join Town Pharmaceutical G Pharmaceutical Town h Join
- its pre of 15% shares, 350mn for JD to Paipai.com and Wanggou QQ its inject to marketplace in JD sellers and platform sales in direct suppliers to finance chain supply provide to
is the founder of JD and has been JD been has and JD of founder the is
mn JD ADRsmn and
product agents in Zhongguancun ( in Zhongguancun agents product
. Acquire Qianxun.com f Qianxun.com Acquire . Service and mobile ecommerce in m.360buy.com. ecommerce mobile and Service C investment from DST, Tiger Funds, Robin Li, and other investors. other and Li, Robin Funds, Tiger DST, from investment C h 82.8% of total voting power. Tencent, Tiger Global, Hillhouse, and Capital Today held held Today Capital and Hillhouse, Global, Tiger Tencent, power. voting total of 82.8% h
-
Border E Border
roup
- booking services. booking - commerce Platform to Connect International Brands With Chinese Consumers Chinese With Brands International Connect to Platform commerce
(600998.CH), the 2nd largest medicine distributor in China, to expand category to medicines. to category expand to in China, distributor medicine largest 2nd the (600998.CH),
F Before IPO, JD ha JD IPO, Before RMB300 ook. ook. tegory ca expanding SK, Korea rom
中关村
mn cashmn . ).
d By the end 2014, Richard of Qiangdong Liu 537.1mnhas B
er structure. First, made2changes major sharehold in structure. itser
to cloth and shoes. and cloth to commerce commerce ’
s
chairman and chief executive officer since JD
IPO shares. IPO industries. In June 1998, Mr. Liu started his
opticalproducts.Mr. January 2004, Liu In
Change 360buy.com to jd.com. to 360buy.com Change platform.
Page in 4 to JD JD to of of 29 he
Company Report JD.com Inc.京东（JD US） 1 September 2015
GMV includes sales from JD direct sales, JD marketplace, and Paipai.com. ecommerce Low price and high efficiency is the core foundation of JD counties and districts. The Company's 211 same Se 1Q14) in (1.5mn endthe of warehouses for normal Chengdu in the southwest and Xi'an in the northwest. Each of these fulfillment 1Q14 in h JD Source: Figure 305.6 a JD Source: Figure JD has 3 B2C Retail JD B2C Retail Ecommerce s come driver main reached buyers increasedvery fast. e million th 100 120 140 as buyers ctive 20 40 60 80 mn, up up mn, e 0
the the Company the las
2 : Shenyang in the northeast, Beijing in t built 1 : 7 Company, Guotai Junan International. International. Junan Company, Guotai t 4Q13 :
.9, up up .9, 47.4 JD competitive page Core Philosophy Core 2
Ecommerce company Q1
up up % 86.7 AnnualCustomer Active Account(million) fo 1Q14 5 % 6.0 55.5 a nationwide fulfillment infrastructure. , Guotai Junan International. International. Junan Guotai , r , 2,045 , disclaimer Annual customerActive accounts JD.com operated 166 operated JD.com from active buyer growth. increased fast. YoY
YoY in China. For 3C standardized product 2Q14 65.5
- edges: items, and associated sorting centers and related and centers sorting associated and items, bulky for warehouse one items, sized .
(1,620 in 1Q14) 1Q14) in (1,620 . GMV per order order per . GMV Annual
In In 3Q14
78.4
2 Q1 l ow ow GMV per active buyer reached RMB 5 4Q14 96.6 , JD Tencent has shifted the traffic supports to Yixun.com to JD.com. As a result, JD active p rice
’ s
105.2 1Q15 warehouses
annual in 2Q15 2Q15 in ns. JD delivery JD deliverypickup stations and1,045 stations. & h
igh igh he north, 118.0 2Q15 - day andday activebuyers reached q reached RMB3 75, , uality (86 in 1Q14) 1Q14) in (86
Shanghai in the east, Wuhan in the center, Guangzhou in the south,
next JD
e s
’ fficient s ecommerce. Currently JD is is JD Currently ecommerce. s had established fulfillment centers in seven major cities in China China in cities major seven in centers fulfillment established had , Source: Source: Figure - economies day delivery program covered 13 covered program delivery day million 100.0 150.0 200.0 250.0 300.0 350.0 50.0 0.0 the Company the
3 l GFA GFA aggregate an with ogistics down 2.6%down YoY, : , up up , 3,012 1Q13 JD OrdersFullfilled (million) 57.6 118
of 2Q13
72.6 scale % upmn, 80.3 , Guotai Junan International. Junan Guotai , s
Orders fulfilled fulfilled Orders 3Q13 ystem 81.5 10.7%
effect is obvious in this niche market. market. niche this in obvious is effect
4Q13 111.7 centers consists of between 1and 10 down , and 124.5% 129.3 1Q14 YoY YoY . 163.7 % 1.0 2Q14
t the 125.5% Annual raffic raffic of 119.0% . And orders full orders And . 5
178.2 3Q14 (111 in 2Q14) and approximately 2.3 largest 3C product vertical qoq growth yoy
s
network covered 1,855 4Q14 217.8 95.0% upport Tencent. from Order Order per active buyer
.
In conclusion,In GMV 1Q15 227.2 75.7% 2Q15 305.6 filled reached
facilities. facilities. Page 86.7%
20% 40% 60% 80% 100% 120% 140% 0% 951 mn sqm sqm mn 5 of of JD (622
29 At At ’ ’ s s
Company Report JD.com Inc.京东（JD US） 1 September 2015
25% From 201 From s save 2014 also strategy price Low market. niche this in further grow could GMV as price lower achieve could JD services. is the importantmost factor, sales theif distributors provide after quality products ande same th JD JD even they make no profit. profit. no make they even e categories, such ases cloth Se e 31.2 in FY15 GMV sales direct online expect We GMV. sales. direct Online direct sales. Source: POP Sales Direct %Growth Categories Other Electronics POP Sales Direct %Percentage Categories Other POP Sales Direct GMV JD PC mobile B2C C2C Retail Online Growth PC mobile B2C C2C Retail Online Proprotion% PC mobile B2C C2C Retail Online China 2Q14)in GMV of online direct sales reached RMB56.7bn, RMB93.7bn, online of GMV Table conomies conomies
Other Categories Other Electronics Electronics
e
Marketplace th %, and 23. , 38.8%
, 3C & white goods c YoY e
2 iResearch 7M14, Guotai Junan International. International. Junan Guotai 7M14, iResearch las : JD GMV Growth : JD Growth GMV %
counties and districts, respectively. t 2 page
of
to 201 to
of
3C 3C
of total GMV. We expect expect We GMV. total of scale
scale fo 4 bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB products represent
% r platform % % % % % % % % % % % % % %
disclaimer 4
YoY , GMV of mark of , GMV effect.
effect JD primarily sells 3C sells JD primarily
, accounting , for ategory GMV reachedRMB On
100.0%
(POP) Projection 75.3% 99.5% 13.7% 86.3% The 3C andwhite producers goods prefer
. 0.5%
2010
461 459 398
L and food, the contrary, small distributors distributors small contrary, the 63 ow ow 2
.
price and high quality JD.com had approximatelyonlineJD.com had merchantson its 60,000 marketplace etplace sales reached RMB16.6bn, RMB31.8bn,
Computer 426.0% 214.3% 100.0% 19.9% 80.1% 91.1% 68.5% 47.3% 70.2% 98.5% 25.3% 74.7% 3C 3C .5%, 55.5%, 8.9% 1.5% 2011 26.2 26.2 29.8 32.7 773 198 586 785 6.5 6.5 2.9 marketplace
12
& white good products
Telecommunication and electronics, Consumer ,
% 50.1 292.3% 472.4% 124.2% 106.9% 100.0% 490.3% - 82.4% 90.3% 65.2% 34.8% 77.4% 44.7% 32.5% 22.6% 51.3% 94.2% 34.6% 65.4%
1,187 1,187 17 reach RMB2to 52.0bn, RMB 1,118 5.8% and white are goods standardized all products, which exhibit obvious 2012 140.8 25.5 25.5 47.8 16.6 56.7 73.3 776 411 69 and sales GMV sales
3C products are JD
products ( products
bn, up up bn, % of total46.1 GMV. 3C might
and RMB159.3bn 297.4% 100.0% 86.1% 14.5% 66.9% 71.2% 63.6% 79.2% 91.6% 65.3% 36.4% 74.7% 44.7% 45.3% 25.3% 59.4% 85.5% 40.4% 59.6% 1,618 1,618 1,128 1,892 125.5 125.5 2013
45.7 45.7 79.8 31.8 93.7 274 765 not receive stable supply orders supply stable receive not % 76.4
electronics and and electronics in FY15 in
large large
YoY 239.3% 100.0% 107.3% 161.3% 217.3% - ’ 68.6% 33.0% 76.4% 54.1% 70.0% 45.9% 61.2% 16.5% 35.2% 38.8% 48.7% 67.0% 45.8% 54.2% 17 distributors and might give them profit rebates s most 1,885 1,885 1,289 1,525 2,815 140.8 140.8 100.9 159.3 260.2 119.4 , 2014 930 representing representing ,
accounting for to reach RMB reach to
home appliance products
& whi & popular and RMB100.9bn, accounting 23%,for 3 30.5 100.0% 100.2% 57.7% 45.7% 59.3% 74.5% 49.4% 94.5% 92.4% 58.2% 50.6% 55.5% 13.9% 26.0% 44.5% 40.5% 54.3% 51.4% 48.6% 2015E 2,146 2,146 1,809 2,033 1,922 3,955 229.7 229.7 224.3 202.0 252.0 454.0 bn, and RMB and bn, te JD lots of marketing expenses. In In expenses. marketing of lots JD
% of% itstotal54.1 GMV.
products. goods goods
products. products. 77%, 75% bn, 202.0bn, 100.0% . For c For . 42.4% 54.9% 31.5% 44.6% 44.9% 61.3% 56.8% 57.3% 31.2% 55.1% 50.4% 17.9% 49.6% 30.5% 45.1% 56.1% 43.9% 2016E 2,325 2,325 2,835 2,895 2,265 5,160 361.4 361.4 295.0 325.9 330.5 656.4 8.3% ecommerce
Compared with other other with Compared
407.7bn, up58
From 2012 to 2014, onsumer , at
RMB3
and 61.2% and
the end 1Q15. of ) 100.0%
29.6% 59.2% 19.8% 34.7% 40.0% 46.3% 31.5% 46.9% 23.4% 60.0% 46.1% 12.3% 10.4% 53.9% 22.0% 40.8% 59.6% 40.4% 2017E 2,567 2,567 3,728 3,752 2,543 6,295 531.1 531.1 353.4 476.8 407.7 884.5 through online 25.9 Page s, the price price the s,
has g has
bn, and
of total 6
100.0% 1,121.3 1,121.3 of of .2 14.1% 26.8% 36.0% 20.8% 61.7% reat 33.1% 20.8% 35.2% 19.4% 64.0% 43.4% 56.6% 16.0% 38.3% 62.1% 37.9% 2018E 717.9 717.9 403.4 634.5 486.8 2,796 4,504 4,533 2,767 7,300 8.8% 8.9% %, %, 29
Company Report JD.com Inc.京东（JD US） 1 September 2015
logistic dilemma is to separate its raise However, JD However, enjoy logistics service. We made very rough estimates estimates rough very made We service. logistics 4 USD maintain net margin of around 7% around of margin net maintain RMB2.5 at least invest to delivery demand, has it reached growth, ourto GMVorders N Aisa JD sorting center sorting JD Tencenthave Weixin together provided directly and highly automatic warehouse was put operation,into with daily package processing SOPL SOPL Fulfillment services. Se logistics investa lot in has toJD International. Junan Guotai Company, the Source: Watch Cosmetics Book Smartphone nourishment Parts Auto Outdoor Products Baby Instrument Music Luxury Jewelry Shoe & Cloth Beverage & Food Wine Fresh ware kitchen Products Pet Mats Housing Furniture Category orders, place sales and procurement the for responsible charged basically JD RMB4 including supplyincluding chain financing, an as additional value engageJD recentlybegun has addition, to modes. modes. JD online marketplace. online JD basic transaction processing and billing services including their choice Table e
th
e
. higher margin. Ou margin. higher
bn, up 100.2%, 61. up bn, 76.8 3 2 o.1 don't need to put goodsneede storag don't put in to sellers the mode, las : JD : JD
leverage
bn in in bn JD express logistics services are divided into four patterns: four into divided are services logistics express JD
RMB12,553 t
operates 18 hours at full capacity per day, its annual package processing capacity page
prepare Marketplace ’
s logistics logistics s revenue and netmight profit grow much faster than the 2014 fo r s bys 3
sellers could ratio disclaimer , 3%~5% 3%~5% 1%~5%
representing invoices to them. to invoices SOP
mn, mn,
5% 6% 6% 8% 5% 3% 8% 3% 8% 6% 9% 8% 8% 3% 8% 5% of eitherof delivery services or a combination of warehousing plus delivery services, in addition to the average JD provide (3x ~4x asset to equity).
rd
r conclusion is that even in FY18 JD which in suppliers, party Rates Fee RMB20,206
full
3
3%~5% 3%~5% 1%~8% filled, package per order assumption estimates deliver goodsJD sortingcenter to %, and 46 its JD logistics platform to to platform logistics JD its 6% of GMVas commission feesin marketplace FBP 5% 5% 5% 7% 3% 5% 2% 7% 8% 5% 9% 7% 7% 3% 7% Fee Rate Fee s 4. - 8% (7.9% in 2013),while8% in (7.9% Amazon ’
- value extra 7
% of its total revenue. In the future, we think JD could only maintain a very thin margin in in margin thin a very maintain only could JD think we future, the In revenue. total its of % to maintain competitive edges 2
) Ad services) mn, andRMB29,560mn,
3%~5% 1%~8% 3%~5% more social traffic to medium and small sellers small and medium to traffic social more . 3% 3% LBP . In LBPe mod In .
8% 9% 7% 7% 3% 7% 5% 5% 5% 7% 3% 5% 2% 7% in internet financing activities and JD has developed various financial products,
,YoY accounting for 44.5%, 49. added fulfillment services to th to services fulfillment added
on on
the the that JD provide that bn annually in next 3 years. The logistics leader UPS (UPS US) could only 3%~5% 1%~5% 3%~5% the JD marketplacethe SOPL . sellers JD also JD 8% 9% 7% 7% 3% 7% 5% 5% 5% 7% 3% 5% 2% 7% - added service
introduce ,
e and, after buyers don't need buyers to put goods after sellers inthe e and, storag
and, after buyers place orders, prepare
mn in in mn
’ s logistics net profit could not not could profit net logistics s provide
s bys 3 Platform Fee Fee Platform s
to them at no e more strategicinvestors andborrow morefrom banks to FY1
s logistics the the FBP, LBP, SOPL, and SOP. In FBP mode In SOP. and SOPL, LBP, FBP, . s
6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 rd
In 10M14, JD announced JD provide online advertising services in various formats. formats. various in services advertising online
service which in suppliers, party 5 invoice - 1
7 that of that . , we estimate that package processing demand demand processing package that estimate we , 6 - e third
I % net loss increased every year, to reach to year, every increased loss net t sales package f JD has package to satisfy only direc sales t ’ s s. 100,000 100,000 100,000
and net margin net s
In 10,000 10,000 10,000 30,000 30,000 50,000 50,000 30,000 50,000 10,000 50,000 10,000 10,000 50,000 50,000 50,000 10,000 50,000 50,000 platform. platform. logistics investment. investment. logistics SOP xtra cost. xtra to JD suppliers and third- JD suppliers and to
capacity SOP SOP party sellers on JD online marketplace, marketplace, online JD on sellers party % of% total53.9 GMV.
mode, sellers ship goods to buyers buyers to goods ship sellers mode, through
the JD has 4 marketplace service
to be to offset could 4) Supply chain financing. of of 100,000 100,000 100,000
10,000 10,000 10,000 30,000 30,000 50,000 50,000 30,000 10,000 50,000 10,000 10,000 50,000 50,000 50,000 10,000 50,000 50,000 sellers could sellers
FBP 16 Cash Deposit Deposit Cash JD JD that
10%, as ad services could could services ad as 10%, ,000 the warehouse spending.
Moments reach 105
prepares
its Shanghai Asia N
One One s. package
100,000 100,000 1)Platform fees 10,000 10,000 10,000 30,000 30,000 50,000 50,000 30,000 10,000 50,000 10,000 10,000 50,000 50,000 50,000 10,000 50,000 50,000
way ( deliver goods to to goods deliver
LBP 微信朋友圈 party sellers on party
the the mn. Accordingmn. ,
to solveto the JD JD invoice Page
Assuming is is
JD and around 7 solely solely
100,000 100,000 of of 50,000 50,000 30,000 10,000 50,000 10,000 10,000 50,000 50,000 50,000 10,000 50,000 50,000 10,000 10,000 30,000 30,000 s. In ) SOPL . o.1
29 3 In In ) .
Company Report JD.com Inc.京东（JD US） 1 September 2015
buyers JD is its weak mobile traffic. JD should Se Te Source: Figure Source: Figure support. online shopping channels to JD. In e n
cent mobile traffic support for JD supportcent mobile for traffic th e
the the ’ las
4 behaviou 5 : JD :
Company, Guotai Junan International. International. Junan Company, Guotai International. Junan Company, Guotai t WeChat : JDEcosystem page ’ s Logistics System s Logistics fo r rs rs
disclaimer a on nd nd
QQ 1) High traffic social network media media network social traffic High 1) JD. for problem this solved almost has Tencent app. mobile JD
mobile have huge mobile traffic in China. Currently, Tencent interface 1 put has the Level
20 spend 14, according14, iResearch, to Tencent
is crucial is lots
of money of . Before Tencent became Tencent Before
buy ing
more downloads and lots of mobile ads to form the online
a strategic partner of JD, the biggest problem biggest the JD, of partner a strategic ’ s WeChat and QQ mobile MAU have reached reached have MAU mobile QQ and WeChat s Page access of 8 of of
for for 29
Company Report JD.com Inc.京东（JD US） 1 September 2015
could provide conversion and brand ad services for JD, especially in holiday promotion. great influences influences great Furthermore, JD andTencent developed have purchase and social fashion icon suggestion. Se 4) 3) 2) 1) flow.and freecash We the think Wal Amazon, Suning, Gome, Strong EcommerceRetail Competition monthly user time spent. Although the around 500 e th JD cash flows.Free operatingcashCash flow from flowchange. Negative cash recycling days. around 20%. and Suning might work together to improve its 3M13 3M14, itsto from i retailer Goods & White 3C largest the become 13.1%, and 6.8% respectively. 2014, In their sharsmarket become 13.7%, 10.6%, and 5.9%, respectively. And JD has above years. and JD logistics a result, As supplychain effective services financing tosupmore itspliers. providing by platform, ecommerce aB2C to mode sales direct from change did Amazon capital expenditu in re Service), Web AWS (Amazon and traffic Amazon), support by (Fulfillment FBA providing by platform ecommerce B2C a to sales 3 direct for from platform ecommerce and service, cloud streaming, video online electronics, consumer think we However, Amazon’ years 3 recent the in indicator worst the has Suning sales ratio of JD, Gome, Suning, Amazon, and Wal effect this 0.4 I use work future. the in stores department efficiency. We think JD could extend further as its GMV grows and it will attract more payables rely on financing through account AP respectively.days, days recycling cash Their in days. JD account payable turnover days. n 201 e las ’
%, %, respectively. and%, 0.4 We could conclude JD that could finance c s turnover days in 2014 supply chain competitive edges over traditional department stores. t market
page 4 designated
, the work the , mn andmn 600 s history,s 2007from 2010, to its indicators reached 8.0%, 7.1%, 11.9%, and 7.4% respectively, anamazing level. ’ ing s s AP turnoverdayless1/ is than does not fo r on
capital change/ sales ratio as ratio sales change/ capital
In 2015, we expect JD, Suning, Suning, JD, expect we 2015, In share disclaimer
social network. network. social ing
. Obviously, Amazon has to invest a lot in both logistics and cloud services. Thisservices.changeObviously, increaseand cloud . both logistics might in lot a invest Amazon to has size reached RMB1,029bn, up 14.5% yoy. We use free cash flow / sales ratio to reflect the 5 retailers 5 the reflect to ratio sales / flow cash free use We
relyon much
that in C in capital change/ sales ratio of JD,of Gome, Suning, Amazon, change/capital sales ratio and Wal mn, respectively. Total weekly user time spent reached around 600
coming
3C 3C - h mart, and JD and mart, Amazon’
reached only 38 ina
& White Goods White & 3indicator group
’
s years but wouldyears but its fuel long
3) 3) 3C & w & 3C
Retailers could generate positive cash from working capital, mainly by extending extending by mainly capital, working from cash positive generate could Retailers extending
s Other mediaincluding In China, JD, Gome, and Suning and Gome, JD, China, In conversion ratio is indicator , on their on hite hite 2
and
an
of Suning of different
its AP turnover days. JD has the best working capital operation efficiency. GMV only reached RMB62bn, less than half of of that JD. 2015, In Tmallas and it maintains very healthy relationship with suppliers, with amazing SCM
g s Grouppurchase mode is
and has indicator oods
could could 92 3C & 3C n China working capital turnover days, cash flow from operating cash flow change, 201 Almost allAlmost 5
’ Gome days ly rapid . 4
retail market. I White Goods retail, SuningGoods retail, White GMV kind of sales guid sales of kind In otherIn words, reflect
’
- s. And And s. reached low,high mobile trafficcould still stimulate GMVgrowth. Mart reached reached Mart . . Wal .
and Suning retail growth was stagnant 2yearsin last Wehas foundhighest JD that the among indicatorall 5 retailers. s market shares to reach 16.3%, 9.5%, and 4.7%, respectively. respectively. 4.7%, and 9.5%, 16.3%, reach to shares market s
decline
-
Qzone, Tencent video the SCM efficiency of of efficiency SCM the term - their inventory turnover days in Mart hasMart the lowest I n 2011, JD, Suning and Gome market shares reached 6.4%, 6.4%, reached shares market Gome and Suning JD, 2011, n retailers could finance through working capital change. We - 31 ’
s indicator s or might shrink turn negative growth rate. We think JD is facing the same change as as change same the facing is JD think We rate. growth d ,
- ’ s A
95, and in recent years due to new busi n 2014, China 3C & Goods White retail by business it need it - %, %, 1.6
P ance agents for social fashion icons, which have have which icons, fashion social for agents ance a
turnoverdays in - eye more far onstantly through working capital change and s - 0.3 58 to borrowto more money.However, see we as ’
cash retu We have made detail made have We
%, %, days
indicating days, turnover AP retailers -
2.6%, 2.7%, and 2.1%, respectively 2.1%, and 2.7%, 2.6%, and Tencent
.
Global peer peer Global growth catching mode
- ratio rn. rn. Mart reached 0.0 201
. mn hours,mn or 2.4 I
rd 2014 n nal
4 might accelerate 2015tomight in party. Amazon was shifting was Amazon party. 201
reached suppliers from traditional traditional from suppliers
reached 4 News Amazon and WalAmazon , the flows / freecash , ed ness expansionness in on
, 13 59, . The. 3products
analysis among
mobile devices. devices. mobile %, 0. %,
in the next few few next the in 44 . bnhours for , 5 that For Taobao, Page 8 8 2) Group 8 , and and , %, %, , and and ,
it didn it 9 -
- 4.9 of of Mart Mart 1
29 6 32 %, %, 8 ’ t .
Company Report JD.com Inc.京东（JD US） 1 September 2015
Account Payable Days Payable Account Account Payable Days Payable Account Gome Working capital Change as % of sales of % as Change capital Working sales of % as FCF Cash recylcing days recylcing Cash Working capital Change as % of sales of % as Change capital Working sales of % as FCF Days Payable Account sales of % as Change capital Working Inventory Turnover Days Turnover Inventory Inventory Turnover Days Turnover Inventory JD Suning Suning Gome Market Share% Market Inventory Turnover Days Turnover Inventory Working Working Days Payable Account Gome Se Source: JD Growth% Suning JD size designated above businesses by Retail Goods White & 3C Table the Source: sales of % as FCF Sales JD sales of % as FCF Days Payable Account Sales Year) Fiscal (Jan Walmart sales of % as FCF sales of % as Change capital Working Sales Amazon Days Turnover Inventory days recylcing Cash Sales Suning Cash Sales Gome Walmart) (Except Year Fiscal Dec Table Cash recylcing days recylcing Cash Cash recylcing days recylcing Cash
e
recylcing days recylcing
th
capital Change as % of sales of % as Change capital
e Inventory Turnover Days Turnover Inventory
4 ies Compan the las 5 : Supply Chain Competitiveness Comparison Comparison Competitiveness Chain Supply : : JD, Suning, and Gome market share in China 3C& White goods retail market goods 3C&White share China andin market Gome JD, Suning, :
t
Compan,ies Guotai Junan International. page
fo
r
disclaimer , Guotai Junan International. International. Junan Guotai
mn RMB mn mn RMB mn RMB mn mn USD mn USD mn Page Page Day Day Day Day Day Day Day Day Day Day Day Day Day Day Day % % % % % % % % % %
308,945 308,945 17,959 17,959 15,913 15,913
12.6% - 8,490 8,490 FY04 1.1% 1.3% 2.9% 0.4% 0.8% 1.9% 6.2% 2005 2005 (82) (10) (64) 112 (3) 71 47 30 32 36 35 47 % % % % % mn RMB mn
mn RMB mn % B RM mn RMB mn
344,992 344,992 10,711 10,711 24,729 24,729 26,042 26,042 17.5% - FY05 (117) 1.1% 0.1% 3.3% 0.4% 1.3% 2.7% 4.5% 2006 2006 (16)
(58) 158 13.8% 14.9% (4) 70 63 32 38 37 44 45 2008 333
46 50
373,821 373,821
11.2% 15.3% 14,835 14,835 42,479 42,479 39,998 39,998 16.8% 14.0% - 7.0% 2009 FY06 5.3% 2.5% 3.1% 9.6% 0.1% 5.6% 1.2% 8.0% 2007 2007
379 (95) (52) (35) 124 43 58 (6) 73 78 33 36 38 42 44
10.5% 15.5% 29.7% 27.8% 19.3% 2010 401,087 401,087 485 49,693 49,693 45,889 19,166 19,166 51 75 - FY07 2.4% 2.4% 6.7% 1.1% 0.3% 3.7% 2.5% 7.1% 2008 2008
(88) (56) (48) 117
(7) 78 90 32 35 36 42 42
14.5% 24.3% 32.9% 17.5% 9.3% 4.1% 2011 644
60 94 26 405,046 405,046
58,029 58,029 42,668 24,509 24,509
11.6% 11.9% - FY08 (101) 5.0% 7.5% 1.2% 1.1% 6.6% 3.4% 2009 2009 (10) (68) (66) 113 137
- 88 34 35 36 43 41 13.1% 16.0% 14.6% 82.4% 6.8% 4.8% 6.4% 2012
748
51 98 48
418,952 418,952
11.7% 20.1% 10.4% 66.9% 75,237 75,237 50,910 34,204 34,204 6.3% - - - - 7.1% 8.9% 2013 FY09 1.2% 1.1% 6.3% 2.2% 0.4% 4.6% 2.6% 7.4% 2010 2010 105 898 (11) (71) (94) (56) 118 133 56 80 94 37 38 37 46 40
443,854 443,854 10.6% 14.5% 76.4% 13.7% 1,029 1,029 93,519 93,519 59,821 21,129 21,129 48,077 48,077 5.9% 3.4% 7.0% 2014 - - - FY10 2.7% 0.5% 0.7% 3.5% 0.6% 3.0% 3.4% 5.1% 2.4% 4.4% 109 141 2011 2011 (68) (75) (33) 60 120 119 (9) 94 40 45 38 55 42
2015E 34.0% 59.3% 16.3% 20.0% 1,378 1,378 4.7% 9.5% 7.0%
130 224 65 466,114 466,114
41,381 41,381 98,044 98,044 51,097 61,093 61,093 - -
FY11 5.7% 6.3% 0.8% 2.6% 0.4% 6.6% 2.5% 0.6% 2.7% 0.6% 2012 2012 (73) (95) (41) (42) 144 145 (7) 97 44 57 39 69 78 46 44
2016E 15.0% 31.5% 18.6% 15.0%
1,585 1,585 4.4% 9.5% 7.0% 150 295 69
473,076 473,076 104,962 104,962
56,401 56,401 69,340 69,340 74,452 74,452 - - - FY12 0.2% 2.6% 2.8% 0.6% 0.3% 1.0% 3.3% 2.1% 4.5% 1.0% 2013 2013 (72) (99) (39) (51)
144 138 2017E 14.5% 19.8% 19.5% 12.0% (6) 96 45 62 38 73 64 37 45 1,815 1,815 4.1% 9.2% 7.0% 168 353
74
10
482,229 482,229 108,568 108,568 115,002 115,002
of of 60,360 60,360 88,988 88,988 2018E 14.0% 14.1% 19.5% 10.0% - - - - 2,069 2,069 FY13 3.8% 8.9% 4.9% 0.8% 1.5% 0.3% 0.4% 7.0% 1.6% 3.4% 1.1% 0.0% 0.8% 2014 2014 (73) (95) (31) (53) 132 138 185 403 29 (5) 92 46 58 38 68 79 59 44 45
Company Report JD.com Inc.京东（JD US） 1 September 2015
Se Source: GMV% Mobile ARPU GMV per order buyer per Order Revenue Orders Buyer Active Annual GMV VIPshop GMV% Mobile ARPU GMV per order buyer per Order Revenue Orders Buyer Active Annual GMV JD GMV% Mobile ARPU GMV per order buyer per Order Revenue Orders Buyer Active Annual GMV Table order might decline due to higher percentage of mobile GMV in the future. iResearch, JD GMV per order reached RMB377.6, while Taobao & Tmall GMV per order only reached RMB123.6 per order. According to per order is much higher than annual active buyersFY12 in of Tabao that ’ 367mn of buyers active YoY expect Taobao Yixun.com.to JD Yixun.comas madegreat lossin 2012- JD has completed a transition along with Tencent.Paipai.com JD acquired has Tencent from didn’ but market share increased has from 17.9% 1Q13in to 23.5% in However, 1Q15. Yixun.com share, but the fact is that Yixun.com and other and Yixun.com that is fact the but share, market players major other Furthermore, 2Q. in Promotion 618 has JD while 4Q, in Double 11 Promotion Promotion and Double 12 58.6% and 4Q14 in 64.9% to increased 1Q13 but declined 19.5% to in 4Q14 and add we If 1Q15. in 0.4% to 1Q13 in 6.8%
e
. th
2) Taobao
e
6 Guotai Junan International. International. Junan Guotai Companies, the ed las
shares declined from 19.8% in 1Q13 to 10.8% in 4Q14. : Key Indicator Comparison of China Retail Ecommerce
& Tmall are Tmall &
t
Taobao & Tmall GMV to reach RMB
page
s. ’ s mobile GMV per order might be only half of that in PC ecommerce. It ecommerce. PC in that of half only be might order per GMV mobile s fo
r However, & Tmall Tmall &
’ s market share in total B2C ecommerce has increased greatly. It greatly. increased has ecommerce B2C total in share market s disclaimer
much largermuch than JD in ecommerce scale , up 31 up , ha
JD Page Page ve - 14 reached 29.3mn, 47.4mn, and 96.6mn, up 134.4%, 61.7%, and 103.8% YoY ’ .5 s online buyer
much more annual moremuch active JD than users
bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB % that of that
RMB RMB RMB RMB RMB RMB unit unit unit mn mn mn mn mn mn % % %
YoY
2013. However, Tencent has shifted the traffic support , while JD while ,
in 1Q15. Tmall GMVhas 1Q15. much more seasonalityfactorin JD than GMV,Tmallas has Taobao & Tmall Taobao
increased to to increased JDGMVandYixun.com GMVtogether, their GMV market share reached24.7% in
3,876.0 3,876.0 1,690.3 1,690.3 944.5 944.5 496.2 153.5 594.9 594.9 114.0 12.5 12.5 21.1 21.1 65.9 32.7 34.0 34.0
3.1 4.9 4.9 5.3 5.3 1.4 1.4 7.3 1.5 0.0 s ecommerce were losing losing were ecommerce
grewthan faster
’ s annual active buyers might reach 118 trillion, up up trillion,
1,044.1 1,044.1 6,720.0 6,720.0 1,412.3 1,412.3 23.9% in 1Q15. Tmall GMV market share reached 53.0% in 1Q13 and and 1Q13 in 53.0% reached share market GMV Tmall 1Q15. in 23.9% 378.2 378.2 143.0 160.0 193.8 193.8 264.6 264.6 126.4 961.0 961.0 5.7% 29.3 29.3 41.4 41.4 73.3 42.0 42.0 21.9 21.9 20.2 5.3 5.3 5.8 5.8 6.6 4.3 4.3 4.1 , due to to due ,
37.2
11,504.7 11,504.7 % 1,462.9 1,462.9 1,541.7 1,541.7 1,114.0 1,114.0 15.0% 15.0% 11.3% 125.5 125.5 388.2 388.2 134.0 231.0 323.3 323.3 292.9 292.9 174.1
higher 47.4 47.4 69.3 69.3 49.2 49.2 40.2 49.8 49.8 14.4 14.4 10.5 10.5 those of 6.8 6.8 5.2 5.2 9.4 9.4 YoY has larger Taobao. larger has
, while JD GMV GMV JD while , market
percentage of electronics and white goods.
18,400.7 18,400.7 1,009.5 1,009.5 1,190.5 1,190.5 2,273.8 2,273.8
35.6% 52.3% 15.0% has
260.2 260.2 377.6 377.6 123.6 334.0 689.0 689.0 265.7 265.7 167.8 115.0 118.9 96.6 96.6 56.1 56.1 31.6 31.6 55.1 55.1 23.1 23.1 22.9 22.9 Taobao & Tmall due Tencentto traffic. 7.1 7.1 5.2 5.2
shares
.
In In
seems that Tmall has l has Tmall that seems
, Taobao, 2Q15 expect 27,055.2 27,055.2 ’ 1, 3,121.7 3,121.7 1, s very rapidly 55.9% 67.0% 25.0% 125.3 215.1 925.1 925.1 162.2 182.6 245.5 245.5 454.0 373.6 438.4 243.5 243.5 168.7 115.4 74.0 74.0 59.8 59.8 43.7 43.7 61.7 61.7 47.2 47.2 might 7.5 7.5 5.2 5.2 mn, mn, GMV scale
GMV market share declined from from declined share market GMV
. In B2C re likely
to J to up 80.3% yoy, reach RMB
37,100.8 37,100.8 1, 1, 4,047.9 D.com 65.7% 72.0% 31.0%
175 835.6 841.1 841.1 221.4 458.2 101.5 357.6 274.3 233.4 656.4 196.9 109.1 106.4 540.3 that JD average GMV per per GMV average JD that 74.1 74.1 88.1 68.7 5.2 5.2 7.9 .2 .2
than JD. than
tail ecommerce, JD ecommerce, tail
t acquire Yixun.com, acquiret
which was originally bn, up 74.5 up bn, 454.0
ed ost lots of market 47,564.7 47,564.7
1, 2, 4,846.5 less than 1/3 of to haveto annual 71.9% 77.0% 37.0% 248 574.2 781.2 781.2 205.7 764.3 147.0 157.2 343.6 389.1 884.5 245.8 101.9 134.8 548.5 . 114.8 311.8
86.7 86.7 3) JD 3) 5.2 5.2 8.3
.1 .1 I n
2015
’
s GMV s GMV 11 58,457.1 58,457.1
1,123.5 1,123.5 1, 3, 1, 5,321.4 , JD of of 76.3% 82.0% 43.0% 325.7 396.7 .3 121 744.7 744.7 196.1 160.9 216.1 220.3 330.1 519.4 391.8 234.9 148.2 630.8 we we JD JD 91.0 91.0 92.7 29 % 5.2 5.2 8.7 ’ ’ s s ’
Company Report JD.com Inc.京东（JD US） 1 September 2015
JD Mobile GMV Mobile JD Tmall GMV Tmall Alibaba group GMV and JD GMV were from the companies the from were GMV andJD GMV group Alibaba . ecommerce mobile in as well as platforms, ecommerce Se Note: Compan the Source: Yixun.com Tencent + JD Other GMV JD B2C GMV Mobile Alibaba Mobile Ecommerce Total Table Tencent white goods and smartphones. I value high was GMV JD of order accounted for 42% of total order in 1Q15, the average mobile order value might be much smaller than PC order, as half iResearch, JD 1Q15, Taobao to 1Q13 GMV. & Tmall From GMV total of market share 4.2% reached 82.8% for in 1Q13, 86.0% in 4Q14, and accounted 83.9% in only 1Q15, while GMV according to JD mobile GMV, while total of 87% for accounted 2014 in Taobao & Tmall ha orders. has much more categories andSKU than YoY 4.5% up 7.1, to indicator placed around 49.8 orders while average JD buyer online p only reached 323mn. Taobao’ JD than online frequently much more shop Taobao & Tmall buyers have shoppingmore solid habit Alibaba Group GMV GMV Group Alibaba JD GMV GMV JD China Retail Ecommerce Retail China Breakdown: B2C Retail GMV GMV Retail B2C Breakdown: e Retail
major players'’ major th Alibaba + JD market share could exceed 100% as there are GMV of OTA (train tickets), virtual currencies in its GMV statistics. GMV in its of currencies virtual OTA GMV are there as tickets), (train 100% exceed could share market JD + Alibaba
Retail
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buyers Market growth projection and JD mobile GMV was from iResearch. iResearch. from was GMV mobile andJD projection growth Market
254.8% 74.1% 25.9% 12.0% 19.4% 59.2% 87.3% 82.5% 56.3% 71.4% 43.4% 21.5% 43.7% 118.0 118.0 521.5 521.5 135.0 135.0 227.9 135.1 430.0 1Q14 1.7% 1.4% 3.1% 2.1% 2.1% 5.4% 8.5% 1.6% 44.1 44.1 44.1 44.1 7.3 7.3
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Company Report JD.com Inc.京东（JD US） 1 September 2015
JD GMV JD Alibaba group GMV and JD GMV were from the companies the from were GMV andJD GMV group Alibaba Se International. Junan Company, the Guotai Source: Figure JD Note: Compan the Source: GMV Mobile JD GMV Mobile Alibaba Ecommerce Retail Mobile GMV Tmall Retail B2C Ecommerce Table JD GMV GMV JD Alibaba Group GMV GMV Group Alibaba GMV Retail B2C Breakdown: Ecommerce Retail China e
th Alibaba Diversified Development
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490.3% 106.9% 79.3% 17.8% 52.4% 81.0% 65.4% 34.6% 94.2% 51.3% 1,187 1,187 5.8% 6.2% 2012 2012 411 411 215 215 961 55 69 73 73
297.4% 14.5% 84.7% 16.4% 57.7% 81.5% 59.6% 40.4% 85.5% 86.1% 59.4% 1,542 1,542 1,892 6.6% 5.2% 2013 2013 232 232 274 126 441 765 126 14
239.3% 33.3% 66.7% 87.0% 20.5% 60.2% 81.5% 52.0% 45.5% 65.8% 47.4% 1,268 1,268 2,274 2,274 2,789 9.3% 4.2% 2014 2014 808 808 930 260 763 260 39
Market growth projection and JD mobile GMV was from iResearch. iResearch. from was GMV mobile andJD projection growth Market
2015E 2015E 45.7% 54.3% 96.4% 22.2% 59.5% 78.9% 45.9% 51.4% 11.5% 94.5% 61.3% 41.8% 1,744 1,744 1,809 1,216 2,045 3,122 3,955 6.3% 454 454 454 114 114
2016E 2016E 54.9% 93.9% 23.7% 67.0% 78.4% 41.9% 56.1% 12.7% 45.1% 56.8% 35.6% 30.5% 2,773 2,773 2,661 2,661 2,835 1,858 4,048 5,160 7.2% 656 656 656 204 204
2017E 2017E 59.2% 93.4% 25.9% 78.7% 77.0% 39.5% 59.6% 14.1% 40.8% 31.5% 22.9% 22.0% 3,409 3,409 3,484 3,484 3,728 2,683 4,847 6,295 8.8% 884 884 884 327 327
13
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Company Report JD.com Inc.京东（JD US） 1 September 2015
s coupon services and commodity of ways withsolution big data. Online transaction & offline delivery can be divided CRMinto and SCM. In ecommerce,O2O there are 3 online transaction & offline delivery, and mobile payment. O2O ecommerce pro ecommerce O2O payment. mobile and delivery, & offline transaction online ’ service ecommerce O2O side. payment and users), (online C side sellers), provide comprehensive services for offline business. key 3 and the suburbanUser experiencetourism. will increases due to more categories and more choices. f the In 2) and vending machines. Life service formats include entertainment, beauty service, wedding service, flowers service, auto auto service, flowers service, wedding aftermarket,house decoration, service, massage, beauty entertainment, include formats service Life machines. vending stores, and convenience stores, discount stores, specialty store, department supermarket, include shopping mall,ermarket, hyp radius. decoration andhouse C has Home trillion in China. In the near future ecommerce companies may also expand also may companies ecommerce future near the In China. in trillion Combinedtrillion. with RMB300 billion entertainments and life service business, the target market might reach around RMB8 Meituan 1H15, Meituan had become new growth strengthen the last mile delivery. The complete O2O ecommerce service value chain includes five links: Mobile traffic in B2Cin online Medicine Platform, Tuniu in alleviates JD expand in supply chain finance, consumer credit, wealth management, payment, crowdfunding and insurance. JD Finance to reach full reach to Se 1H15, Meituan announced to cover all 1,111 county group buy and take cateringtheis leaderMeituan in the ecommerce market. into penetrate (classified information news flow) from different entrances: Alipay under Ant Financial (mobile payment), Meituan (O2O group buy), Baidu (mobile map), 58 com Fiercer CRM,Marketing, SCM, Mobile payment, and Consumer credit. market scale 2015in Supermarket, Catering, and Tourism. markets: target major three have companies ecommerce O2O characteristics: important three with business, offline traditional M Home JD JD a office and 60% of online ticket sales market. Meituan’s hotel reservation opened 1 in , which , Home 55%
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Company Report JD.com Inc.京东（JD US） 1 September 2015
improv think location requests are closely connect stores offline invite can Baidu 1H14. in times billion more than 60% market share, with MAU up to 370 million. Daily Daily million. 370 up to MAU with share, market 60% than more to invest RMB20 billion Nuomi.in its front page. Both Baidu map and Baidu life provide coupons of catering, group buy, travel, car service services, connectin services, Baiduto take service car buy, travel, group catering, of coupons provide life Baidu and map Baidu Both page. front its map provide map Baidu and Baidu Mobile ecommerce. 1) O2O for entrances important traffic mobile two are Baidu life and map Baidu over 600 scores. It’s easie ( sellers. offline word for coupons) and (members services CRM and marketing data big and provides users Alipay mobile in sellers. edges micro and competitive more has Alipay sellers. offline million 12 with rate, fee 1.2% of average ionpay Un eroding is share payment mobile Alipay’s Currently, cities. some in machines POS own their promote to began Alipay TPV (total payment value) might reach RMB 12 Alipaytrillion. now focuse features: which includes O2O ecommerce coupons, mainly catering, hotels, and suburban resorts. Alipay O2O ecommerce has 3 Hotel Card Credit Bank Baidu provides CRM management for enterprise Se enter credit consumption. Alipay began to convert traffic to O2O ecommerce. International. Junan Guotai China, of Association & Clearing Payment iResearch, Source: GMV Ecommerce O2O Total Office Box Online Tour Package tickets flight excluding OTA Take O2O other Commodity Entertainment Buy Group O2O Ecommerce O2O revenue industry Travel China Supermarket Catering Market Target Table 淘点 e Travel and Hotel and Travel Life service Life Catering
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Company Report JD.com Inc.京东（JD US） 1 September 2015
homesuburbanoutJD carry might travel channelwith Tuniu. has strategically invested in Elestrategically investedhas in Se Shanghai, Shenzhen, and Guangzhou and might expand afternoon and cook in the evening. system 2- logistic think We target. multilevel a the up achieve built to has Home JD slogan. amazing an 2hours, in order customers’ deliver to announced Home in square per revenue the improve could supermarkets Instacart’s business model buildto up local fresh ecommerce providing by delivery supports for supermarkets,local while onl for aproblem still is ecommerce fresh categories of services. Supermarket Source: Figure results. search in directly service online CRM realize could sellers and coupons their manage e
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Company Report JD.com Inc.京东（JD US） 1 September 2015
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Company Report JD.com Inc.京东（JD US） 1 September 2015
are Se International. Junan Guotai Insurance, Internet China iResearch, Source: Payment Internet excluding Finance Internet Total Sales Ecommerce Fund growth Sales Premium Insurance Internet growth Reward growth Balance P2P balance credit Consumption Ecommerce by Breakdown Balance Credit Bank Internet payment Online by Breakdown growth (TPV) Payment Internet Party 3rd Table Source: 1Q15Share in Figure the buyers don’ insurers. However, as there are only less than 30 banks working with JD payment, JD fund distribution might be constrained if products.Asan online financial wealth sell to insurers helps also (Public fund distribution), JD Note (Bank notes), JD Fixed Term financial products, and JD Fixed Time financial ecommerce financing. financing for sellers in the financial product Jing Baobei ( provides management companies, while JD act Fund ecommerce take might It on products financial creates JD as However, rate. zero 99bill.com *Wanda Fast Money) Fast *Wanda 99bill.com e
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ayment,
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more and more popular in 2015. 2015. inpopular more and more management
JD wealth management has 5 channels: JD Vault (Monetary Fund Products), JD Fund cluding Chinaexcluding Merchant 19.9% 30.0%
s the of International.
as an online fund sales channel.
channel, JD has very limited risk as JD only cooperates with large public funds and 40.0% above banks
) 京保贝
50.0% products.
48.9% 60.0%
its its own, JD has to build a risk management model controlto credit risk. and Jing Small Loan (
. M
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bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB Share in 1Q15Share in Figure Source: % % % % % % % % % % %
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rd
te Ping'An payment
Lianlianpay.com
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185.7% 378.6% 204.0% 174.0% 6,587.6 6,587.6 goods and smartphone buyer Bank of Bank 30.8% 81.5% 69.2% 18.5% 73.0% 291.9 291.9 216.8 2013 Yeepay.com 29.1 29.1 26.8 19.0 ). ). 京小贷 0.2 0.2 JD Wallet JD
Bestpay Tenpay
Umpay Others Lakala Alipay
14,069.2 14,069.2 139.4% 137.2% 113.6% 120.0% 286.6% 26.0% 74.0% 91.6% 42.6% 52.2% 57.4%
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2014 Communication 44.3 44.3 36.4 rate to support its suppliers and POP red a bull a marketred 0.0% 0.4 0.4 . 3) Consumer credit. , Guotai Junan International. Junan Guotai ,
Furthermore, less than 30 banks
0.3% 0.3% 0.4% 0.5% 0.5% 0.6% 0.6% 3.0% 3.1%
20,114.3 20,114.3 250.0% 310.0% 1,133.4 1,133.4 13.5% 2015E 26.6% 62.2% 12.7% 73.4% 77.7% 41.6% 43.0% 43.2% 58.4% 579.3 579.3 424.8 63.5 63.5 64.7 1.1 1.1
50.0%
27,800.7 27,800.7 100.0% 1,708.9 1,708.9 2016E 50.8% 15.1% 71.8% 59.1% 40.8% 38.2% 25.0% 28.2% 36.9% 59.2% 666.7 666.7 849.5 103.0 s. 86.9 86.9 2.8 2.8
in 1H15 s, for 3 months at at 3 months for s, 2) Supply chain
77.2%
37,010.2 37,010.2
2,426.3 2,426.3 1,274.3 JD randomly 100.0% 2017E 50.0% 42.0% 30.0% 70.6% 58.4% 39.6% 33.1% products. 20.0% 29.4% 32.4% 60.4% 866.7 866.7 115.0 163.1 7.2 7.2 , demand ,
18
47,470.0 47,470.0 3,355.7 3,355.7 1,279.2 1,656.6
2018E of of 30.0% 38.3% 47.6% 70.1% 57.2% 38.5% 28.3% 15.0% 29.9% 60.0% 61.5% 148.4 148.4 256.5 15.0 15.0 JD JD 29
Company Report JD.com Inc.京东（JD US） 1 September 2015
licenses: A license (B2C medicine platform for C license players), B license (B2B medicine platform) online medicine (B2B B license players), C license for platform medicine (B2C A license licenses: B2C market wholesalers and delivery. We think JD might work with Shanghai Pharma, Bitauto, Tuniuand in JD B2C, JD Home, and ExpansionCategory auto credit. wit work to local services. 3) Onlinetravel. New sales car might be by driven online car news and discount promotion news auto aftermarkets but are entirely connected otherbusiness face financial might but accounts. than more RMB5,000 no forbe daily to consumption in consumption balance accounts and RMB200k account annual limit for money payment the of limit payment the for rules tight very set payment has account. PBoC three medicin three in China's share is about 6%, 6%, about is share China's in including consumptionincluding cr financial business to their banks, if they have private bank licenses. industry Se JD PBoC Source: Figure JD This means 3 means This We think it We think and manyventure totally different nature: Rewardin about RMB47mn in the week.first Dongjia 2) ( Technologyscale. JD, saveto costs financing and testto the potential demand. And new technology companies could easily thefind demand e retail C2B or presales Reward in regulated highly e
Reward and th e Demohour.com crowdfunding JD
the Compan the issued opinion draft on3 stores). In 2014, there were only 15 A licenses, 75 B 75 A 15 licenses, only were there 2014, In stores). las 11 -
h Tuniu in suburban travel and hotel hour room. Moreover, JD could work with the 3 partners in consumer credit and Shanghai crowdfunding : 1) PBoC might China forbid 3 in t
: Pharmacy delivery team should have Good Supply Practice (GSP). In JD B2C, JD could work with page Based on the Based ’ s more like marketing other more likes smallamount.financingdue than marketing the financing, to
Reward - Crowdf
penetration rate rate penetration rd According to our statistics, Shanghai Pharma e circulation Shanghai enterprises statistics, our to in China. According 39.10% fo
ies , r
party payment companies could not open any financial business only under 3
in JD Home JD in disclaimer , Guotai Junan International. Junan Guotai , products P capital - 2.20% unding supports new electronics sales crowdfundingshare market2014 in harmaB2C medical the Dreamore.com Zhongchou.com
7.20% has 31.6% has commerce, while Equity while commerce,
current opinion current US by SEC. edit, auto finance, andsupply chain finance. 3
funds have provided high quality funds with small financing amount
Page Page accounted for 60.8% of the markets. Meizu P Meizu markets. the of 60.8% for accounted 8.90% , JD in in in in which hospital which rd
of the of could work with pharmacies as pharmacies could deliver medicines.
11.00% p
- party payment regulation. The new regulation might change the whole 3 regulation. payment party JD B2C could work with Tuniu in flight tickets and outbound travel, while JD H crowdfunding andEquity 31.60% harmacy harmacy Others Taobao crowdfunding
. share market 1) JD is currently the reward ecommerce
obstacles toon. move draft, JD payment JD and onlinepublic would sales fund not be influenced rd
party payment companies to open accounts for any financial institutions. s’ market market
东家 - market crowd - Equity starts ) funding is a
wa
is still in preparation in still is JD JD share share % 1.9 only s
s help
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7%, and Pharmacy and 7%, small newtechnologycompanies crowd to make funding in
newof type
the Compan the funding. Reward- crowdfunding.
12 2) PBoC has constrained the usage of
in 2014 : Reward
ower Bank has created anew record by financing rd - crowdfunding leader in China. In 2014,
party payment companies have to move their their move to have companies payment party
ies Others including Agriculture, Film, Cartoon, and Art. and Cartoon, Film, Agriculture, including Others benefit Public Publishing Entertainment Technology stage. 1) Shanghai
3.50% angel investment financing products, which is . 4.80% , Guotai Junan International. Junan Guotai ,
There are 3 kinds of Medicine Ecommerce Ecommerce Medicine of kinds 3 are There - 25.80% 5.10% crowdfunding
market market JD has startedJD just Equity crowdfunding is a
share In 2014 In , RMB6.0mn for each project. project. each for RMB6.0mn , medicine circulation industry market share is is P transfer rd JD Financ and around harma is harma ,
party payment license, license, payment party Chinese medicine B2C B2C medicine Chinese
60.80% 2) Auto ecommerce.
C license(Pharmacy new online type of
in comprehensive comprehensive in 0.2%. rd
one of e
party payment payment party - . 1) Medicine. crowd the
2) 2) ome could could ome
medicine medicine M balance balance
the funding 19 edical
of of
top JD 29
Company Report JD.com Inc.京东（JD US） 1 September 2015
Se portal vertical vehicle J products health and Sexual includes GMV Medicine Note: Source: 2014 Figure Source: Ecommerce Medicine Internet Total Service Medicare Mobile & Online growth GMV Medicine B2C Online Expense Health Total Circulation Medicine Table probablyplatform of GMV penetration rate in Pharmacy market in Pharmacy rate penetration share market vertical portal. JD penetration rate to Total Health Expenditure Health Total to rate penetration Administration (CFDA) has to to logistic more large Pharmacy Chain Stores to solve the the solve to Stores Chain Pharmacy large more Pharmacy D Bitauto and e customers Online Medicare Service Medicare Online Tmall Medicine
Mobile Medicare Service Medicare Mobile
th got
e Tmall Pharmacy/95095.com Tmall
11 ies Compan the the Compan the las 13 companies A growth growth growth growth growth growth : China Medical Ecommerce growth growth growth t
, : page
license it might take might it B2C Medicine .
YoY YoY YoY YoY YoY YoY YoY
YoY
fo
ies
’ Bitauto r s online auto ecommerce
disclaimer
. , Guotai Junan International. Junan Guotai , , Guotai Junan International. Junan Guotai ,
8.70%
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.
went to
N
over
has a perfect a perfect has
7.00% build up a professional delivery network with GSP licenses GSP with network delivery aprofessional up build to years several JD eed -
- the reached Ecommerceshare market in 0.10%
Page Page banned the social counter drugs counter 1Haodian professional Good Supplyprofessional (GSP)Good Practice the
84.20%
N
o. 1 o. around
, Home Medical Equipment Equipment Medical Home , auto
bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB Babaifang . Autohome
% % % % % % % % % % %
RMB database
is still in early
delivery logistics logistics 23.8% 33.1% 6.9 2,785 2,785 0.0% 0.2% 0.2% 2011 Others 943 5.5 5.5 0.9 4.2 0.4 5.1 5.1 bn, Bitauto
based on nationwide
Drug Store has around Store 50% Drug Tmall which in 275.0%
20.8% 18.5% 32.6% 45.2% 50.4% 53.5% 28.3% problems together asproblems together local 3,365 3,365 1,117 companies to deliver medicine and only allowed the professional professional the allowed only and medicine deliver to companies 0.6% 0.2% 2012 6.7 6.7 0.7 1.5 8.2 8.2 1.3 5.4
need A
s
Source: by sales (bn RMB) Figure stage Shanghai medicine Pharma medicine Shanghai
Tmall Pharmacy/ Tmall 173.3% 200.9% s 19.0% 16.7% 49.8% 54.6% 22.6% 28.0% 50.0% 4,006 4,006 1,304 1.4% 0.3% 2013 12.7 12.7 traffic support traffic from 8.6 8.6 2.0 4.1 2.0 2.0 6.6 . 1) 1) .
the Compan the
14
: Bitauto Bitauto 16.2% 16.2% 68.3% 32.7% 52.0% 71.6% 50.7% 44.2% 26.9% 2014 Top Ten Healthcare ecommerce players 4,653 4,653 1,514 1,514 1.9% 0.4% 2014 11.4 11.4 18.3 18.3 3.5 3.5 6.9 3.0 3.0 8.4
95095 dealer network. Babaifang Yihaodian
Ehaoyao ies
Yaofang 360 delivery teams delivery Jianke
.com , Guotai Junan International. Junan Guotai , is secondthe domesticlarge automobile 2015E 7 kad 38.0% 62.1% 13.0% 15.0% 78.3% 79.3% 51.0% 53.2% 29.3%
5,258 5,258 1,742 3.0% 0.5% LK J 15.7 15.7 12.3 28.0 28.0 10.9 1 6.3 6.3 4.9 4.9
Pharmacy stores could deliver medicines medicines deliver could stores Pharmacy 0
JD and
0 128.5% 100.0% 101.2% 2016E . 12.5% 14.6% 64.0% 51.3% 79.8% 34.9% 5 5,915 5,915 1,995 5.3% 0.9% 25.8 25.8 12.6 24.6 50.4 50.4 11.2 14.6
However, 1 has
T .
encent. encent.
1 The The
2017E 41.6% 80.2% 12.0% 15.1% 56.5% 57.4% 51.6% 48.9% 12.3% . 6,625 6,625 2,296 only 0.2% only 5 7.2% 1.1% 36.5 36.5 19.9 38.5 75.0 75.0 20.1 16.4
. In 12M . share market
2 China Food and Drug
the main traffic mobile mobile traffic main the 2)
. 2 2018E 43.0% 11.5% 14.6% 34.8% 70.0% 35.6% 51.9% 38.8% 10.0%
7,387 7,387 2,633 104.1 104.1 . 8.4% 1.4% with work could JD 5 Online auto sales 52.2 52.2 26.9 51.9 34.2 34.2 18.1
market market
3
2019E 3 46.0% 65.0% 11.0% 15.2% 34.5% 35.3% 52.2% 40.2% 10.0% 8,199 8,199 3,033 146.0 146.0 9.8% 1.8% . 5 76.2 76.2 36.5 69.8 56.4 56.4 19.9 share
4
20
2020E of of 60.0% 47.0% 10.5% 14.7% 32.0% 32.8% 52.5% 39.8% 10.0% 11.3% 204.2 204.2 112.0 9,060 3,480 2.3% 14 90.2 90.2 21.9 48.4 92.1 29 in in ,
Company Report JD.com Inc.京东（JD US） 1 September 2015
together with local 4S stores to distribute coupons. coupons. distribute to stores 4S local with together H JD 4) conversion rate. auto buyersauto havemight less overlapping Automakers created Autohome by and Bitauto. JD. tourism. traffic Tuniutravel to channels. travel ecommerce its between selling cross close to RMB provide easier tocross make- package tour GMV reached RMB44.9bn, up 48.1% Se Source: Tongcheng Tuniu Ctrip Tongcheng Tuniu Ctrip in Package share Market Organized Breakdown: Tour Packaged Packaged Reservation Hotel Air Growth Others Packaged Reservation Hotel Air Proportion Packaged Reservation Hotel Air OTA Table JD Tuniu and are - - - ticketing t ticketing e icketing
th premature
growth growth
e
: China12: OTA Market - - - - ies Compan the
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t With
page Self
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nationwide networkstravelagents in and resorts, fo .
.0 - might Auto Tour r
bn, with revenue RMB3.5bn. of disclaimer , Guotai Junan International. Junan Guotai ,
vertical portals provide sales leads or mainly for mainly or leads sales provide portals vertical
create
selling between r Package Tour Package o
me me
Page Page
synergies and
bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB bn RMB % % % % % % % % % % % %
However, However, sales Bitauto could work together in car aftermarkets.
and travel channels. 3) JD H JD 3) - eye very are which customers, to
, etail etail very soon very and 54.9% 33.7% 54.7% 24.7% 27.4% 23.6% 15.0% 45.1% 12.5% 61.7% 104.2 104.2 169.0 2.2% 3.8% 2012 21.2 21.2 21.2 39.8 part 0.8 0.8 3.2 7.1 direct direct b) b)
o ecommerce
s me could with Tuniuwork to expand hour hotel room and suburban
. buyers still need driving test very much
In 2014, totalIn OTA reachedRMB307.8bn, GMV up 38.9%
It It might take very long time for
YoY online car sales are still are sales car online 54.7% 21.8% 43.0% 24.1% 31.3% 22.3% 11.6% 45.3% 13.7% 61.7% 31.1% 136.8 136.8 221.6 2.3% 5.9% 2013 . 30.3 30.3 30.3 49.4
1.8 1.8 3.5 6.6 1) 1) , 15.4% of total OTA market, total of 15.4% ,
Tuniu
It
and and ’ s easier for JD to convert flight tickets booking and outbound tickets flight convert to JD for easier s 55.3% 23.2% 48.1% 28.0% 41.1% 20.6% 13.4% 44.7% 14.6% 62.7% 38.9% 193.1 193.1 307.8 2.1% 5.6% 2014 10.4 10.4 44.9 44.9 63.3
Tuniu could 2.5 2.5 6.0 is is OTA users.
the largest largest the
dealers 2015E 55.9% 25.2% 40.5% 34.4% 30.5% 20.8% 15.4% 44.1% 15.4% 61.6% 32.9% 252.0 252.0 409.1 2.2% 6.1% 15.9 15.9 63.1 63.1 85.0 catching. 3.8 3.8 9.7
create hotel hour room and suburban tourism in
.
difficult, because
Cu In Japan, Rakuten has succeeded in making
rrently over rrently OTA OTA 2016E 56.5% 27.2% 17.4% 43.5% 16.6% 60.5% 38.2% 28.2% 26.2% 20.7% 28.6% JD 318.0 318.0 526.1 109.0 109.0 2.3% 6.6% 15.2 15.2 23.7 87.2 87.2
5.8 5.8
In In
the fastest growing niche market and Bitauto to increase online car sales sales car online increase to Bitauto and
2014 p ackage
.
3) 3) JD Home andBitaut 2017E 57.1% 29.2% 19.4% 42.9% 17.9% 59.2% 35.0% 23.9% 22.6% 20.5% 25.2% , 390.0 390.0 658.7 117.7 117.7 117.7 135.0 2.4% 7.1%
Re 22.8 22.8 34.4 70% of the Tuniu 8.4 8.4
a) large tail
t our our
ecommercebuyers and PackageTour GMV 2018E 57.7% 21.4% 42.3% 19.3% 58.0% 31.2% 32.0% 20.0% 19.7% 20.1% 22.3% 467.0 467.0 805.3 155.3 155.3 155.3 162.0 2.6% 7.6% market leader. 11.8 11.8 33.2 48.5
Germanyand Japan auto
sales sales YoY 2019E 58.3% 23.4% 41.7% 21.1% 56.0% 33.2% 31.2% 20.0% 15.9% 20.1% 20.0% o could work work o could 541.1 541.1 966.4 203.8 203.8 203.8 194.4 2.8% 8.1% 16.5 16.5 47.7 67.6 , in which which in ,
leads
.
21
3) 3) Tuniu Tuniu 1,140.3 1,140.3 2020E of of 58.9% 25.4% 41.1% 22.9% 54.0% 35.2% 28.1% 18.0% 13.8% 20.1% 18.0% wa 261.0 261.0 261.0 229.4 615.7 3.0% 8.6% are are It 22.4 22.4 66.3 91.9 29 ’ s s
Company Report JD.com Inc.京东（JD US） 1 September 2015
3) 2) JD Finance might have very than GMV B2C sales direct to marketplace Se Gross marginis Gross Source: Figure contribute still sales Direct Revenue Financial 1) & profit. gross its of driver main the be still contribute over 90% of revenue in in revenue of 90% over contribute still 5% only reach to expected is only ratio monetization platform ecommerce B2C from revenue But marketplace platform still account profitcontribute and RMB
e white goods categor white mn RMB
100 200 300 400 500 600 th from ad servicesbutin might ad logistics make from loss RMB platform. marketplace charged sellers.large JD 2ppt morefor logistics
online sellers.online Tmalland Taobao Wangpu onlycharged 5% However, as JD (RMB6,000) but higher transaction commission rate 6%~8%, of by targeting JD Tmall, to Compared FY14. in 6.2% FY11 to in 8.3% from marketplace platform through ad services and logistics services. H JD JD and RMB other in gross margin theas order value per deal in other shrimp is is different. JD is expanding its category Direct sales might still contribute over 90% of revenue. with 3 3 with Year CAGR of Qianxun.com expandto category its with 3Year CAGR of 27.2 2017 GMV is expected to grow rapidly. grow to expected is GMV
that of that e
in 2014 , , , , , , the Company, Guotai Junan International. Junan Company,the Guotai 000 000 000 000 000 000 las 15 marketplace Profit 0 t 2 , with, 3 Year CAGR of 389.1bn, up
: page bn, up up bn, 9.6
20
JD JD 2011 and beefnationwide.
, There are possible are 3C & white goods. There 888 . But in in But . Analysis 3 Online direct sales direct Online Online Direct Sales fo 143 59.5
40 2012 r
s disclaimer . , vital forJD. 8 335
66 % in bn, up up bn, 93 ’ %, %, 94.5 . s s marketplace GMV grows bigger and bigger, its commission rate pricing policy 67
2
2013 the the . FY1 % monetization ratio is expected is ratiomonetization to 1 %, 50. 58.8 , % 018 . ies 108 53.6 next 5
category 5 2014 62
- 6.6
1 Page Page low businesslow margin in the short run. , %, and 61.0 We expect its marketplace revenue in FY15 in revenue marketplace its expect We We think gross margin of cloth of margin gross think We 549 .
0 7 the largest the % %. %.
%. Online marketplace GMV in in GMV marketplace Online %. %, %, 170 3 years 2015 Currently, JD maintain JD Currently, %, %, 49.4 to decline to figure this expect we 56
39. s 2 We think JD think We ,
027 %, and 49.5 .
6 ecommerce platform ecommerce %, and 41.8 . E for less than 10% of total revenue, we think JD think we revenue, total of 10% than less for
% 254 much higher profit margin than margin profit higher apparelhavecategory and much JD food might We expect its direct sales revenue in in revenue sales direct its expect We 6 2016 49 %. Direct%. salesin GMV next , 116
. .
5
category is much smaller than that in 3C & white goods. Butwhitegoods. J & 3C smaller in that muchcategory than is E % growth yoy 46.3
359
2017 We expect JD expect We revenue.
41 5 years. in , 547 . 5 to cloth % E % 480 33 ’
41. 2018 s expansions fast, from apparel % YoY . 5 , 082 % 5 E YoY %
We expect total revenues in in revenues total expect We .
As we As negativeimpactson gross margin: es (or clothing) (or es 20 40 60 80 100 120 140 160 0
YoY services at 8% of GMV. However, we think JD could gain decent gain could JD think we However, GMV. of 8% at services % s , respectively , % % % % % % % % very thin margin as 3C &whiteverystillgoods thin 3C as margin services ’ s GMV to increase from from increase to GMV s . .
JD JD
had in maintain at around 6% to other category slow might Source: Figure market es, shoe FY1 FY1
and discussed The business model of direct sales and marketplace platform platform marketplace and sales direct of model business The
mn RMB .
In FY1 In 10 15 20 25 30 35 40 45 JD needs to invest more to maintain logistic maintain to more invest to needs JD 5 brands to jewelry brands to 5 5 .
- ,
, , , , , , , , 000 - 000 000 000 000 000 000 000 000 1.5% of total GMV. JD will have to give more discounts to to discounts more give to have will GMV. JD total of 1.5% the Company, Guotai Junan International. Junan Company,the Guotai
1 place will contribute more and more percentage of GMV. of percentage more and more contribute will place Moreover, JD Home and JD Finance might 1 ’ 16 and shoes. s marketplace platform charged very low tenant fees fees tenant low very charged platform marketplace s 7 0 7
s
istorical data is is : is expected to reach RMB reach to expected is , medicine 5 2011 JD JD 241 - FY15 expected 1
%, %, 44.9 7 before, JD is shiftingbefore,JD is business its from model 1317 ServicesRevenue and Other , we expect Services and others Services - 1 2012 17 17 , 046 . FY15 6 to to % 122 334 Recently RMB ’ to reach reach to FY17 2 s categorysexpansion direct in sales might 2013 and
. , . and to reach RMB to 0 , to cosmetics. cosmetics. to , 322 0 ~8% % % suggested that - at medium and small sellers in Tmall. Tmall. in sellers small and medium at 17 17
New business including JD H New JD including business 177 454 % respectively. % 40.0 6 2014 to reach RMBto cosmetics should be much higher , to reach RMB1 reach 82.6 to
453 JD
. in the long run. in 9 , JD has, provided fresh imported down its direct sales GMV GMV sales direct its down % . 0 ’ 94 12 s 2015 RMB12 bn
. , 5 %, %, gross13.7 reach margin to 553 % ~6%. As a result, direct sales sales direct a result, As ~6%. E in in 20 61 2016 252. 202.0 account for account , . 206 0 2015
In In the past, JD acquired . this
% D might get much better getD much might 6bn E growth yoy is unfavorableis to bn, RMB 170.0bn, 0 29 2017 46
, bn to bn to bn to RMB figure figure
560 . , RMB , 3 to to % E
39 JD monetizes its its monetizes JD 2018 As revenue from from revenue As bn, RMB bn, 33 RMB , 342 .
1 RMB % of total total % of 54.1 % kept E
bn,20.2 and efficiency in in efficiency 884 1000 1200 1400 200 400 600 800 0
that of that %
407.7 476.7 begin to to begin declin o % % % % bn 254.1bn 274.3 . % % % me and and me growth 5 22
bn in in bn large large pr
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Company Report JD.com Inc.京东（JD US） 1 September 2015
strategy, we think the strategy has already been a good advertisement to all customers. We expect its operating l operating its FY1 expect We customers. all to advertisement a good been already has strategy the we think strategy, respectively. We expect its research and marketing expenses ratio to decline slightly. As JD is JD is As slightly. decline to ratio expenses marketing and research its expect We respectively. might in operating loss its its expanding fulfillment cost should account for much higher percentage of its service to marketplace platform. Fu sales JD increased from 8.7% in 2007 to 1 to 2007 in 8.7% from increased
4. reached USD434 Se Source: Figure costFulfillment Source: Figure RMB36 1 %, and 1 and %, 4.2 Operating Profit 7 e ’ fulfillment % of% its total revenue.Amazon s fulfillment costs and fulfillment expense ratio might surge in the the in surge might ratio expense fulfillment and costs fulfillment s mn RMB th 5 ------7 6 5 4 3 2 1 - e
and , , , , , , , incur higherincur than expected costs, including R&D costs, in the short run. 1 000 000 000 000 000 000 000 the Company, Guotai Junan International. Junan Company,the Guotai the Company, Guotai Junan International. Junan Company,the Guotai las 7 . 18 17 0 2bn
t to reach RMB reach to
: : page marketplace platform. However, as JD only only JD as However, platform. marketplace - in 2011 JD Operating Profit estimates ProfitJDand Gross Grossestimates Margin 1 , and, ,
404 to other category, its order value might decline, which might also increase increase also might which decline, might value order its category, other to expenses ratio in in ratio expenses 4.5 fo - 2012 1 r
%, up 1. up %, , FY1 RMB52 951 disclaimer mn in 2007, in mn is
the most crucialthe in most factor 2013
- 5 579 - 1 2,910 7 . operating profit 2bn -
2014 4 5 to reach to
,
803 Page Page ppt, 0. ppt, , up , representing representing FY1 - 2015 mn, RMB mn, 2 , 910
2.1 mn RMB 74 50 10 20 30 40 60 70 80 E does 5 5 , , , , , , , , RMB - - 2016 % in 2014. As JD began to provide 000 000 000 000 000 000 000 000 . 2 1
8 , ppt, and 0. and ppt, 0 496 7 %, %,
E is expected to increase to 7. to increase to expected is spend a lot to maintain its its maintain to a lot spend 1 2011 1,933 2017 - 2,496 gross profit gross 5 , 54 2 152 . , 5 418
% 3.0% of its total revenue, this but figure grew USD to . E 9 3 2012 %, and - 2018 , 2 8
483 mn, RMB mn, , . 816 6 mn, and RMB and mn, %
202 E 3 operating margin 10 6 2013
, . ppt respectively. 844 3 . 2 96 %
% 4 . 5 4 charge 13 % 2014 . 12 0 935 , 95 370 . % 3
. % 4 growth yoy % YoY
23 2015 13 mn, andmn, RMB Source: Figure s 74 , . 376 2,418 7 . % platform tenantad fees, E 8 .
mn RMB % 36 14 2016
- - - - logistic 2 2 1 1 54 , .
- 211 , , , , 2 the Company, Guotai Junan International. Junan Company,the Guotai 500 000 500 000 2 500 500 . % . 9 19 E
%, 7. %, mn, respectively. respectively. mn, % 0
We have observed Amazon that ’ future. future. 52 Our FY15 Our 2017 14 efficient : , 44 - 140 . 2011 JD Non GAAP ProfitOperating Estimates 1 5
gross margin gross % , efficiency. Amazon E . 333 3 0 % 204 14 70 % and 7 2018 35 . , JD JD 7 529 - 2012
. 1 3 % ,
E % 726 logisticsservice to mn - does not 17 gross profit estimates profit gross 17 50 100 150 200 250 0 % 2013 . o APoeaig profit operatingGAAP Non - %
318 . % % % % Furthermore, JD Home and JD Finance 5 %, up up %, fulfillment - 2014 A 1
services , nd we also expect non its GAAP 682
separa 0.2 - ’ 2015 s 1 , 933 fulfillment expenses ratio also also ratio expenses fulfillment
ppt, 0. 4.2 cost percentage. As a result, As a result, percentage. cost E , and, logistics te 2016 - domestic implementing 935
logistic bn in in bn
E 1 2017
- s net shipping costs ppt, and0.2 204 rthermore, as JD is is JD as rthermore, 2014 E
cost for its direct direct its for cost are are 2018 brands, we think 139 , E services equivalent to RMB23
a low price price a low
ppt ppt
23 oss in in oss . , the YoY 4bn of of
29 , ,
Company Report JD.com Inc.京东（JD US） 1 September 2015
FY1 FY1 contribute any profit in business might be curbed by PBoC fierce competition from from competition fierce Se Source: Figure T Source: Figure Source: Figure 10.0% 12.0% 14.0% 16.0% hin hin Net Profit 0.0% 2.0% 4.0% 6.0% 8.0% e 0 1 2 3 4 5 6 7 8 9
...... th 0 0 0 0 0 0 0 0 0 0 5 mn RMB 5 % % % % % % % % % % 1 1 1 1 1 - - net profit e 1999
, , , , , 1 1 the Company, Guotai Junan International. Junan Company,the Guotai the Company, Guotai Junan International. Junan Company,the Guotai International. Junan Company,the Guotai 000 200 400 600 800 200 400 600 800 14.5% las 7 7 24 22 20 0 2010
2000 to reach RMBto reach to reach RMB reach to t
: : : page ehooyad content Technology and Fulfillment GAAP Non Amazon JD Interest Income JD 15.0% 2012 5 2001 176 . 6
2011 % 12.0% technology and content technology and fulfillment Operating fo 2 2002 margin. . 10.0% 6 r interest income interest
7 % 2013 disclaimer . 344 2 2003 2012 % 9.1% ’ s Fulfillment Expenses Ratio 3 2004 8.7% . 8 7 64 % 2, . next Taobao and Tmall 2014 4 638 2013 O % 4 2005 8.8% 237 . 6
mn perating margin from ecommerce business should still be at very thin level in next few next in level thin very at be still should business ecommerce from margin perating Expenses Ratio %
8.7% 5
2006 Page Page 3 years. .
9 2015 , RMB , 2014 mn, RMB mn, 637 % 7 3 8.7% . 2007 . 0
0 . % 1 % E General and administrative andGeneral Marketing general andgeneral administrative sales and marketing avg. interest rate interest avg. 2008 8.7% 2015 2016 959 522 7 ’ 3 s new policy. new s . 2 . PBo 2009 0 % E . 5 % E 8.4%
1,771 mn, mn, and 2016 8.5% 2010 1 7 2017 . , C . 334
3 3 JD Finance might contribute revenues from fund ecommerce but its other financial
% . E ’ 0 9.5% s 2011 % E
. 8 2017 mn, andmn, RMB1 7 new policy might create obstacles for JD Finance. 10.5% . 1 5 2018 2012 3 , % 693 RMB691mn. . 0 E %
2018 11.5% Movever, we think JD think we Movever, 2013 E . 7
7 . 7 2014 % 0 0 1 1 2 2 3 3 4 4 5 E ...... 0 5 0 5 0 5 0 5 0 5 0 12.1% % % % % % % % % % % %
,
523 Figure Figure Source: Figure Source: Figure Source:
mn USD 1 2 3 0 4 5 6 7 8 - 10000 - - - - ......
mn RMB respectively. mn, 2000 8000 6000 4000 2000 4000 6000 0 0 0 0 0 0 0 0 0 (3,000) (2,000) (1,000) 1,000 2,000 3,000 4,000 % % % % % % % % % 0
the Company, Guotai Junan International. Junan Company,the Guotai the Company, Guotai Junan International. Junan Company,the Guotai International. Junan Company,the Guotai 23 21 25 0 1999 2010 : : : - ’ 1.2% 2000 s new business JD Home and JD Financ Amazon JD Non GAAP JD JD 5 2012 256 . 5 - 2011 1.4% 2001 7 % ’ - 0.6% . s Free Cash Flow 0 % 2002 2,278 Non administrative GAAP andGeneral Non GAAP and content Technology MarketingGAAP Non Fulfillment GAAP Non 2013 - 2012 - 7 2.6% 1.0% 2003 . ’ 2 s Net Shipping Cost % W - Outboundcosts shipping Shipping revenue 2004 2.8% Net shippingNet costs profit profit net GAAP non its expect e also 2013 (1,887) 2005 5 2014 - Free cash flow cash Free 2.8% . 8 Operating % 2006 - 3.0% 2014 6 . 2007 9 2015E % - 2.9% 912
2008 2015 7 - We expect JD expect We 3.3% . 2009 - 1 3.5% %
E Expenses Ratio 2016E
489 2010 2016 7 - 4.1%
2011 . 2 - % E 5.1% - 4.7% 2012 2017E 2017 3,017 7 3097 2013 . 4 - 3538 E % -
4.8% 4,487 years, ’ - 2018 2014 8,710 s net net s - 4.7% 2018E 3,345 7 . might 6 E 0.0% ------% 3.0% 2.0% 1.0% 6.0% 5.0% 4.0%
24 loss due to
of of
not
29 in in in in
Company Report JD.com Inc.京东（JD US） 1 September 2015
Se Source: Expenditure Capital flow Cash Operating FCF change capital Working sales of as % FCF sales of as % change capital Working Days Recycling Cash current other and expenses Accrued customers from Advance AP suppliers to Advance IN AR Table Source: Figure
e
mn RMB
th ------4 3 2 1 6 5 e , , , , , , 000 000 000 000 000 000
13: JD Balance Sheet the Company, Guotai Junan International. Junan Company,the Guotai the Company, Guotai Junan International. Junan Company,the Guotai las 26 0 t
: page - 2011 1 JD Net Profit estimates Profit Net JD
, 284
fo
r - 2012
1 disclaimer , 729 2013
- liabilities
50
net profit Page Page - 2014 4
, 996
nm RMB nm RMB nm RMB nm RMB - 2015 2 day day day day day day day , % % 237
E
- 2016 1 , 771
E - 1,069 1,069 (710) (623) 5.1% 3.4% 2011 - (86) 2017 1 50 , 523 6
E
- 2018 1 , 902 (1,148) E 2,721 2,721 1,404 1,404 0.6% 6.6% 2012 (42) 256 78 46 9 6 1 4
Source: Figure
(1,292)
3,570 3,570 2,278 mn RMB 3,111 3,111 3.3% 4.5% 2013 (39) - - - - 2 2 1 1 1 1 12 64 37 - , , , , , , 6 4 3
500 000 500 000 500 000 500 500 International. Junan Company,the Guotai
27 0
: - 2011 1 JD NonJD Estimates Profit GAAP Net , 213 (2,902) (1,887) - 1,015 1,015 0.0% 1.6% 2014 (31) (13) 17 59 44 - 2012 1 9 3 8 ,
502
2013 224 o APnt profit net GAAP Non (3,008) 2015E 3,919 3,919 4,908 0.5% 2.7% (32) 912 - 17 54 35 2014 1 7 3 9 ,
985
2015 64 (3,675) 2016E E 4,164 4,164 3,957 0.2% 1.4% (29) 489
2016 16 55 40 10 522 8 3
E
2017 691 (4,548) 2017E E 7,565 7,565 3,017 6,291
0.8% 1.6% (28) 2018 1 16 53 35 11 11 7 3 , 054
E
25
(5,704) 2018E of of 9,050 9,050 3,345 7,225 0.6% 1.4% (27) 29 16 53 37 10 7 3
Company Report JD.com Inc.京东（JD US） 1 September 2015
Table Home, JD Finance, and category expansion through cooperating with accounted for 47 traffic from Tencent, which which Tencent, from traffic Se Source: profit net GAAP Non Non GAAP EBITDA profit operating GAAP Non profit gross GAAP Non andadministrative General content and Technology Marketing Fulfillment Total Profit Net expense tax Income tax before Profit net Others, income interest net from Profit andadministrative General content and Technology Marketing Fulfillment revenues Net others and Services Goods White & 3C Online Sales Direct GMV Quarterly reached ratio, expenditures reached monetization service marketplace or GMV, marketplace to revenue Services expected. Market still expects JD to create more synergy with Tencent. JD RMB 34.5 Cost of revenues of Cost Quarter e
Services and others and Services sales direct Online
th marketplace GMV marketplace % qoq. Direct sales GMV reached RMB reached GMV sales Direct qoq. % 49.8 e
Results 14: JD Quarterly Results the Company, Guotai Junan International. Junan Company,the Guotai
las
operations
t
bn, up up bn, page
ly
Result
fo
r .0
109.2 disclaimer
mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn RMB mn % of its total orders, up up orders, total its of % bn RMB
% % % % % % % % %
s
RMB %
Projection YoY
originally
1, (20,396) Page Page (3,795) (3,798) (3,852) (3,874) (1,360) (7,552) 27,018 27,018 22,657 17.1% 27.0% 39.1% 60.9% 29.3% 70.7% 2,261 2,261 1,595 1Q14 (152) (285) (594) 095 1.3% 2.6% 6.0% , (81) (39) 93 44 or or 3
mn, up up mn, representing % qoq, representing 35.0 up
(25,458) supportsYixun.com to (1,066) (2,002)
27,369 27,369 28,613 13.8% 44.8% 55.2% 37.8% 62.2% 1,643 1,643 3,155 3,155 2Q14 (251) (420) (583) (582) (788) (455) (850) 1.6% 1.5% 3.7% 7.0% (12)
147 (0) 59 63
77 5
(25,468) . ppt ppt 0 (2,119) 32,381 32,381 29,012 13.6% 46.0% 54.0% 39.8% 60.2% 2,339 2,339 3,544 3,544 3Q14 (512) (880) (164) (158) (407) (439) (576) % 1.5% 1.8% 3.0% 7.3% 64.7 190 371 275 (6) 59 67 qoq. 3C & white goods of%GMV accounted total for 51.5 GMV,as YoY
bn, up6 (30,310) . (1,471) (2,585) 34,549 34,549 34,720 14.9% 50.1% 49.9% 43.6% 56.4% In 2Q15, JD has made further steps in diversification diversification in steps further made has JD 2Q15, In 2,092 2,092 4,410 4,410 4Q14 (619) (454) (439) (756) (491) (562) 1.4% 1.8% 4.2% 7.4% (34) (15) 137 180 86 84
,
JD constantly gains
(32,175) 5 (1,426) (2,678) 42,616 42,616 36,641 14.4% 49.4% 50.6% 42.0% 58.0% . 3,312 3,312 4,466 4,466 1Q15 (704) (710) (713) (823) (480) (969) (206) 1.3% 1.9% 3.9% 7.3% 1 around (45) (90) 154 % 88 3
YoY ’
s (40,019) Ele.me (1,982) (3,252) 42,759 42,759 45,929 14.4% 48.5% 51.5% 43.5% 56.5% 2 3,192 3,192 5,910 5,910 , 2Q15 (462) (785) (510) (512) (723) (614) (984) 4 1.3% 1.7% 4.3% 7.1% (16) Q1 116 115 3.5 up 95 2
5 % of total of % GMV. As JD has 27.1 , Tuniu, Bitauto, and Shanghai Pharma. GMV reached RMB
(39,977) (1,960) (3,277) 3Q15E 50,103 50,103 45,950 14.4% 51.4% 48.6% 45.0% 55.0% 3,957 3,957 5,974 5,974 (378) (762) (466) (466) (639) (614) (901) 1.3% 1.7% 4.3% 7.1% market share from Yixun.com from share market 107 114 162 % qoq. Online qoq.% GMV reached marketplace 67 0
(47,032) (1,033) (2,279) (3,882) 4Q15E 52,767 52,767 54,060 14.3% 52.4% 47.6% 46.5% 53.5% 3,946 3,946 7,028 7,028 (417) (869) (551) (551) (725) (723) 1.3% 1.6% 4.2% 7.2% 108 137 123 67 0
(49,227) (2,362) (4,101) 1Q16E 64,237 64,237 56,713 14.2% 53.4% 46.6% 47.7% 52.3% 5,102 5,102 7,486 7,486 (239) (884) (382) (382) (562) (702) (885) 1.2% 1.6% 4.2% 7.2% 114.5 113 133 123 67 0
mn, up 6 (60,186)
.7 (1,046) (2,853) (1,047) (5,048) 2Q16E 63,596 63,596 69,339 14.1% 54.4% 45.6% 48.9% 51.1% constantly absorbed 5,046 5,046 9,153 9,153 (258) (473) (473) (653) (858) 1.2% 1.5% 4.1% 7.3% %, %, 113 168 105 67 0
strategies flat . Mobile orders orders Mobile . % 81.7
(59,581) (2,790) (1,001) (1,002) (5,032) 3Q16E 73,517 73,517 68,642 14.1% 55.4% 44.6% 50.1% 49.9% YoY 6,112 6,112 9,061 9,061 (221) (432) (432) (612) (849) 1.2% 1.5% 4.1% 7.3% 113 162 142 67 0
. Capital
YoY
we had had we 26
in JD JD in (69,118) (3,197) (1,121) (1,123) (5,877) 4Q16E of of 76,370 76,370 79,629 10,511 10,511 14.0% 56.4% 43.6% 51.3% 48.7% , 5,971 5,971 (217) (484) (484) (670) (985) 1.2% 1.4% 4.0% 7.4% up 119 192 152 29 67 0
Company Report JD.com Inc.京东（JD US） 1 September 2015
representing business. marketplace, by providing very efficient very logistics providing by services.marketplace, model sales direct Amazon. Amazon. warehouses, as Amazon did, to maintain its competitive edge in fast shipment. For new new For shipment. fast in edge competitive its maintain to did, Amazon as warehouses, ecomme Se International Junan Guotai Bloomberg, Source: Average Weighted Average Simple Average Weighted Average Simple Corp Group Softbank Inc Facebook Corp Microsoft Inc Google Conglomerate Internet Global Average Weighted Average Simple Inc Baidu Ltd Tencent Holdings Conglomerate Internet China Average Weighted Average Simple International Ctrip.Com E International Jumei Ltd Holdings Vipshop Inc Jd.Com Ecommerce Vertical China Average Weighted Average Simple Inc Rakuten Yahoo Corp Japan Inc Amazon.Com Inc Ebay Holding Group Alibaba Conglomerate Ecommerce Large Global Company TP with of Initiate Valuation 2016E the great slight valuation premium FY15in valuaion due to faster Table - Commerce China Commerce e
nt domina th e
potential - 15:
- las Spon Adr Spon - Cl C Cl PS PS
Adr - rce strategy, they both shift A
t
JD and Amazon have the similarmost Comparison Peers page We We PSthink ratio bemight agood measure for JD, JD as break
and
- - Adr Spon Adr Adr Spon
1.
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-
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in cloudin service Adr 4 1. r x
9x 9x disclaimer
2015
USD30 is -
A 2017E
the major ofmodel JD and Amazon and direct sales revenue account E Stock Code Stock GOOG US AMZN US AMZN MSFT US MSFT US CTRP PS BABA US EBAY US
BIDU US US Dang JMEI US JMEI VIPS US .0 4755 JT 4689 JT 9984 JT -
700 HK
as FB US FB JD US JD Page Page PS. We think JD should trade with discounts compared to FY16 and FY17 valuation but with 0
and 0. , - and Investment
Sep a but JD still need still JD but
- Currency Service cloud service cloud Service 1
st
USD USD USD USD HKD USD USD USD USD USD USD USD USD 2015. JPY JPY JPY 9
from from pure direct sales model a to combined business model bothof direct sales and x
Last price Last
2016
618.25 147.25 1667.5 512.89 89.43 43.52 131.7 66.45 10.34 17.99 25.88 66.12 27.11 6944 5.97 480 E
Market Cap Market 1,953,865.1 1,953,865.1 2,697,593.9 3,357,101.5 1,237,968.5 1,859,124.2 1,287,459.9
PS. s time s 534,014.3 534,014.3 401,138.8 277,252.1 152,820.5 175,191.0 255,956.1 rating rating 72,402.0 72,402.0 80,643.9 11,469.7 HKD mn 3,736.7 3,736.7 revenue structure and development strategy in ecommerce. ecommerce. in strategy development and structure revenue Currently,
to to
of of
1,816.6 1,816.6 2,875.6 provider in the world, while JD potential has FY14A
revenue 237.4 237.4 237.2 237.2 615.8 142.9 108.7 237.4 114.1 monetize its new new its monetize 38.1 38.1 27.7 27.7 27.2 15.7 52.9 16.2 24.1 36.5 31.8 22.7 40.9 97.3 29.1 18.9 58.0 21.4 “Neutral 9.2 9.2
However, JD might invest a lot in logistics, in a lot invest might JD However,
FY15F Adjusted PE
106.9 106.9 according 15.3 15.3 30.3 36.0 36.0 34.7 24.3 23.3 12.0 43.2 16.7 21.4 30.9 29.3 26.1 32.5 50.8 43.3 77.5 21.4 31.0 67.0 40.9 31.0 20.9 n.a. n.a. growth of JD.growth In the long run, Amazon has already exhibited
” FY16F
126.2 126.2 . 58.1 58.1 13.9 25.4 28.4 28.4 30.6 20.8 20.6 14.8 32.7 16.5 18.4 23.8 22.6 20.1 25.0 88.4 44.0 33.7 25.7 13.5 20.8 40.6 28.3 24.1 20.2
We think
FY17F
to to 37.3 37.3 12.3 19.3 20.8 20.8 19.7 17.3 17.3 13.8 25.2 14.3 15.8 14.6 14.6 14.6 19.7 36.1 20.8 21.2 10.4 14.9 47.6 27.8 21.6 20.5 18.6 rating business. investment Our rating 9.9 9.9 Bloomberg
FY14A JDshould trade 20.2 20.2 20.4 20.4 13.0 11.5 2.7 2.7 1.8 9.2 9.2 6.4 9.2 8.5 1.4 4.0 8.2 9.9 6.7 2.7 2.6 5.3 0.6 2.5 2.8 2.0 8.9 7.1 3.7 7.1 s
even now.
FY15F Price/Sales 14.0 14.0 14.7 14.7 10.4 2.3 2.3 3.8 7.2 7.2 5.1 7.4 6.6 1.0 3.7 7.2 9.0 7.7 4.9 3.2 2.0 5.4 0.3 1.3 1.6 1.3 6.7 6.0 3.4 6.5
estimates business
FY16F 10.8 10.8 10.8 10.8
1.9 1.9 3.7 5.9 5.9 4.1 6.2 5.4 0.9 3.8 6.1 7.1 5.9 3.7 8.2 1.4 1.4 3.9 0.2 0.9 1.1 0.9 5.3 5.0 3.0 5.8 s
for for most of their revenue. For Our TP Our
at valuation valuation at
FY17F , Amazon is trad , Amazon has already been 1.6 1.6 3.4 8.2 4.8 4.8 3.4 5.2 4.5 0.9 8.4 3.6 5.2 5.6 4.7 2.9 6.5 1.1 1.1 2.9 0.2 0.7 0.8 0.7 4.2 4.2 2.7 5.3
in supplyin chain financing
FY15F
mainly mainly 22.7 22.7 24.6 16.3 16.3 20.4 13.0 12.7 22.0 12.4 21.7 21.0 19.6 22.4 16.3 37.2 70.7 16.6 24.3 21.5 16.4 15.4 10.4 is set n.a. n.a. 8.7 8.7 8.0 8.0 8.2 EV/EBITDA is is
FY16F
“ Neutral comparable to to comparable 17.4 17.4 19.0 14.5 14.5 17.6 10.8 10.5 15.8 10.1 16.3 15.5 13.9 17.1 61.6 28.7 26.5 14.2 87.4 16.7 13.0 12.3
6.7 6.7 7.5 7.5 8.7 7.0 8.2 9.8 at at the For revenue, revenue, For
USD30 FY17F ing
automatic automatic 12.0 12.0 14.1 10.5 10.5 10.4 12.0 12.2 13.1 22.1 13.1 29.2 12.1 10.3 10.6 11.2 11.6 6.0 6.0 8.9 8.9 8.8 7.1 7.7 8.3 9.4 1.1 5.3 9.1 8.7 ”
. at at 27
FY15
PEG 2. of of .00, .00, n.a. n.a. 3x 3x 29 -
1.3 1.3 1.2 1.3 1.3 1.0 1.4 1.4 1.3 1.0 1.0 0.8 1.1 0.7 0.7 0.8 0.5 0.7 1.3 1.5 1.3 2.5 1.5 1.3 0.9 17
a
Company Report JD.com Inc.京东（JD US） 1 September 2015
others Disposals Flow Cash Operating Net Non GAAP net profit net GAAP Non Other Se Source: EB BB equivalents cash and cash in increase Net changes rate exchange of Effect Flow Cash Financing Net borrowing net shares of issuance from Proceeds Flow Cash Investing Net expenditure Capital liabilities: Changes Depreciation loss Net End, mn RMB) Statement Flow Cash Non GAAP EBITDA profit operating GAAP Non profit gross GAAP Non - Non Diluted Basic outstanding: shares average Weighted Diluted Basic : ADS per loss Net Profit Net tax Income tax before Profit net Others, income interest net Profit from operations administrative and General content and Technology Marketing Fulfillment profit Gross Cost of revenues revenues Net mn RMB) End, Year (DEC Statement Income Financial Statements Other non cash gains or loss or gains cash non Other Investment - Share
e GAAP
(
Services and others and Services Onlin mn mn based compensation based
( (USD/ADS) th (USD/ADS)
mn mn
in operating assets and and assets operating in
of of
ADRs
e
expense
ADRs e direct sales e direct
investments and PPE and investments the Company, Guotai Junan International. Junan Company,the Guotai and and
las
)
amortization s
t )
page
(DEC Year Year (DEC
fo
r
disclaimer
(2.930) (0.066) (62,496) (2,671) (1,380) (1,292) (1,590) (4,109) 67,018 67,018 69,340 10,812 10,812 3,570 3,570 6,844 6,844 2,322 7,177 7,177 3,635 2,795 2,720
3,111 3,111 (318) (579) (760) (964) 201 201 847 762 (45) (50) (25) (50) (50) 261 261 293 224 193 336
75 Page Page 3 3 0 0 1 0
(101,631) ( (4.130) (13,203) (11,562) 108,549 108,549 115,002 115,002 4.130) (2,902) (4,996) (1,985) (1,682) (5,803) (5,260) (1,836) (4,996) (4,977) (8,066) 1,210 1, (4,011) 13,370 13,370 18,392 18,392 13,370 13,370 16,915 16,915 10,812 17,448 1,261 1,261 1,015 4,121 1,651 6,102 6,102 6,453 6,453 201 201 210 (14) (13) (31) (19) 253 253 958 958 216 216 609 4 4 0
(159,204) ( (1.608) (13,088) 182,580 182,580 170,027 170,027 1.608) (1,646) (6,758) (3,751) (3,008) (2,237) (1,661) (1,933) (2,910) (2,431) (3,121) (2,237) (2,242) (7,647) 1,391 1, 25,561 25,561 16,915 13,132 23,376 23,376 23,376 12,553 12,553 11,485 11,485 201 201 8,647 8,647 3,919 4,908 391 977 977 272 204 204 463 5 5 64 E E 0 0 0 0 5
(238,112) ( (1.212) (20,058) (11,203) 274,323 274,323 254,116 254,116 1.212) (1,556) (8,531) (4,855) (3,675) (1,771) (2,496) (3,394) (4,052) (1,771) (1,771) 1,461 1, 38,405 38,405 25,561 12,844 18,767 20,206 20,206 17,211 17,211 36,211 36,211 36,211 201 201 4,164 4,164 3,957 1,561 (518) (935) 461 417 417 522 267 267 458 6 6 E E 0 0 0 0 0
(336,967) ( (1.012) (29,225) (10,836) (15,624) 359,547 359,547 389,107 1.012) (6,290) (4,548) (1,523) (2,418) (4,424) (5,285) (1,523) (1,692) (2,211) 1,505 1, 50,584 50,584 38,405 12,179 17,660 52,140 15,450 15,450 52,140 29,560 29,560 201 201 7,565 7,565 6,291 2,214 (204) 505 582 582 691 378 267 267 459 169 169 7 7 E E 1 1 0 0
Total Total non Other Goodwill net rights, use Land net assets, Intangible progress in Construction net and software, equipment Property, investments Equity Non assets current Total party related from due Amount assets current other and Prepayments Inventories suppliers to Advance Accounts Short cash Restricted equivalents cash and Cash assets Current ASSETS Sheet Balance EBITDA N FCF others and Services products appliance home and Electronics GMV marketplace Online Sales Direct GMV Indicators Key BVPS equity shareholders' and liabilities Total equity shareholders' JD Mezzanine liabilities Total liabilities current Total liabilities tax Deferred liabilities current other and expenses Accrued party related to due Amount payable Taxes revenues Deferred customers from Advance payable Accounts Short liabilities Current LIABILITIES assets Total (DEC Year End, mn RMB) et et D -
current assets current
- - non e term investments term loans bank term b t
- receivable - current assets current current assets current
Equity Equity
36.4% net cash net 125,500 125,500 26,010 26,010 22,480 10,812 26,010 26,010 16,770 16,770 11,019 11,019 63.6% 25.3% 74.7% 3,530 3,530 1,238 1,024 6,386 1,903 1,887 2,278 2,278 2.713 2,067 7,173 2,270 2,056 (286) 201 201 402 402 599 216 219 770 502 278 278 209 933
15 37 3 3 0 6 0
45.9%
net cash net 260,200 260,200 (4,152) (1,887) 66,493 66,493 49,942 16,915 66,493 66,493 28,995 28,995 16,551 16,551 12,191 12,162 37,498 37,498 30.994 30.994 16,364 16,364 54.1% 38.8% 61.2% 2,622 2,622 1,929 1,929 2,408 3,038 5,312 5,312 4,667 1,060 1,060 1,067 6,878 1,734 2,436 1,891 1,891 201 201 587 587 930 930 236 236 157 412 412 325 325
44 4 4 0
50.6%
net cash net 453,990 453,990 (2,638) 88,964 88,964 69,512 25,561 88,964 88,964 53,703 53,703 19,452 19,452 15,275 15,810 35,261 35,261 23,697 23,697 25.344 25.344 15,022 15,022 201 201 49.4% 44.5% 55.5% 2,622 2,622 2,122 2,122 3,877 3,342 6,564 6,564 7,445 1,165 1,165 1,588 7,431 2,969 1,399 4,567 646 646 912 912 260 260 309 454 454 358 358 5 5
48 E E 0
55.1%
net cash net 126,417 126,417 103,526 126,417 126,417 656,425 656,425 (2,079) 38,405 38,405 92,927 92,927 92,927 22,891 22,891 25,774 20,553 33,490 33,490 36,177 36,177 22.924 22.924 33,789 33,789 10,657 10,657 11,185 11,185 201 201 44.9% 49.6% 50.4% 2,622 2,622 2,334 2,334 5,541 3,676 1,282 1,282 2,370 8,031 5,068 1,943 7,458 710 710 489 489 286 286 387 499 499 393 393 6 6
53 E E 0
28
60.0%
of of 130,274 130,274 130,274 162,240 162,240 135,185 162,240 162,240 884,470 884,470 (1,836) 50,584 50,584 27,056 27,056 32,306 26,719 31,967 31,967 48,539 48,539 51,449 51,449 21.245 21.245 14,955 14,955 13,928 13,928 11,731 11,731 201 201 40.0% 53.9% 46.1% 2,622 2,622 2,567 2,567 7,448 4,044 3,017 3,017 1,410 1,410 3,544 8,682 6,303 2,786 cash 29 781 781 314 314 598 549 549 433 433 net net 7 7 58
E E 0
Company Report JD.com Inc.京东（JD US） 1 September 2015
(4) (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies to relates that business do may companies group its Ju and Guotai Junan by Guotai securities Junan"). for ("Guotai subscribe or Limited Kong) purchase (Hong acquire, to offer or invitation an constitute not does Report Research This DISCLAIMER (3) (2) Website: www.gtja.com.hk Website: Queen’ 181 Plaza, Millennium Grand Block, 27/F., Low Guotai Report, Research this in contained data and information the of accuracy the ensure to made been has effort best Though deci investment or opinions to contrary be report this in expressed opinions Any of companies. group Junan of Guotai executives professional other and dealers persons, opin to contrary be or differ may report this in expressed opinions Any s manager, lead agent, proprietarily). placing or invest the underwriter example, (for etc. and services investment banking, investment including reports, research Se (1) OF INTERESTS DISCLOSURE months 18 to 6 Horizon: Time Composite NASDAQ Benchmark: The Definition Rating Sector months 18 to 6 Horizon: Time Composite NASDAQ Benchmark: The Definition Rating Company 9118 Fax: -9118 Fax: 2509 Tel.: (852) (852) - 2509 201 © jurisdiction. such within requirement licensing or registration any to companies group its and Junan i Guota or regulati subject law applicable to contrary be would use or availability publication, distribution, located or of such where or resident a jurisdiction is citizen who any in entity or person any by, or use to distribution for nded inte or at, directed not is Report Research This decision. investment any to risks, prior related advisers its and financial own objectives their investment consult the necessary where comprehend and and understand should unpredic Investors inherently contain. with may uncertainty conditions so economic and situation, mutable political future the of assumptions the from derived forecasts and estimates -looking forward some contain may Report Research This notherein. data guarantee and the accuracy information and the of completeness e Underperform Neutral Outperform Rating Sell Reduce Neutral Accumulate Buy Rating
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Company Report JD.com Inc.京东（JD US） 1 September 2015