Shares in the Chinese e-commerce giant JD.com experienced a sharp decline, dropping by up to 13% to reach an all-time low on Friday. This significant drop was triggered by a series of price target reductions and revised revenue growth forecasts from multiple banks and brokers. Their rationale primarily points to a slower-than-anticipated recovery in consumer spending.
Prominent institutions, including Citi, Daiwa, and Jefferies, issued updated estimates to their clients on Thursday and Friday. JD.com, a company listed on both the Hong Kong and U.S. stock exchanges, is scheduled to report its quarterly financial data in mid-November, following China’s renowned online shopping festival, Singles’ Day.
The shares of JD.com, China’s largest home appliance retailer, closed at their lowest level since their debut in June 2020. Concurrently, U.S.-listed JD.com shares experienced a 4.5% decline in premarket trading, and its competitor, PDD Holdings, also saw a 1.9% dip.
The ongoing debt crisis within China’s property sector has been contributing to an economic growth slowdown. Simultaneously, concerns regarding the economy and job security have led many Chinese consumers to reduce their spending, significantly impacting the retail sector.
Back in March, JD.com had cautioned that it would take time to rebuild consumer confidence post-pandemic, as it fell short of fourth-quarter revenue forecasts.
Citi Research has made adjustments to its revenue assumptions for JD.com, reducing estimates by 3.4% for the third quarter and 4.3% for the fourth quarter. Analysts at the bank cited a combination of factors, including a «relatively muted consumption trend, high base, intense competition, and the ongoing impact of restructuring adjustments.»
Nomura also observed that JD.com had not experienced any significant improvement within the retail sector since the third quarter. Furthermore, the company had not reaped benefits from the stimulus policies implemented by China since September to boost the property market.
JD.com has responded to these analyst revisions by stating that it has no specific comments on this matter and has not provided details on its share price performance.
JD.com stands as China’s leading online platform for the sale of digital and electronic products, encompassing mobile phones and domestic electrical appliances. Its competitors include Alibaba Group, which operates the Taobao and Tmall marketplaces, as well as PDD Holding, responsible for the Pinduoduo platform. These platforms offer a wide array of products spanning various price points.
In a separate statement released earlier on Friday, JD.com reported that it had filed a police report in response to malicious online rumors associating an arrested businessman with the company.
