9618 – Daily Chart
The price of JD is finding some support ahead of earnings and could make a move to the 192 resistance area.
Investors in JD.com Inc. will be tested by the earnings report from the online retailer as it looks to enter the food-delivery space currently dominated by Meituan. JD.com officially launched its JD Takeaway platform in February, while many of its tech peers were pivoting to artificial intelligence.
The company has already struggled in a price war in e-commerce with Alibaba Group and PDD.
“The food delivery business is very tough — taking on Meituan,” said Jonathan Pines, portfolio manager at Federated Hermes. “They’re worried about their core business, perhaps, and they’re looking for growth. So it was a negative development, and I think the market took it negatively”.
JD.com’s Hong Kong shares are up around 6% this month, trailing Meituan’s 17% rise and Alibaba’s AI-driven rally of more than 50%. The options market shows traders are expecting a move of 8% in either direction for JD.
Investors will be keen to see how much the company is planning to spend on its entry into the food delivery business. The investment could “drag on margins if they decide to be aggressive,” said Xin-Yao Ng, investment director at Abrdn in Singapore. “Meituan has built a very strong moat, so it’s fine if it’s a limited attempt, but will be bad if they talk about going all out”.
JD.com’s growth has started to accelerate with some assistance from global subsidies on household appliances, though it’s still well below previous highs. The retailer already has tight margins compared to other firms and a big push into food delivery could see shares affected.
Ahead of the Q4 results, analyst Gregory Zhao at Barclays set a price target of $55 per share, which would be a 37% upside from current levels. He expects to see a 10% year-over-year revenue growth for the quarter.
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