JD.com, Inc. (NASDAQ: JD and HKEX: 9618 (HKD counter) and 89618
(RMB counter)), a leading supply chain-based technology and service
provider, today announced its unaudited financial results for the
three and six months ended June 30, 2023.
Second Quarter 2023
Highlights
- Net
revenues for the second quarter of 2023 were RMB287.9
billion (US$139.7 billion), an increase of 7.6% from the second
quarter of 2022. Net service revenues for the second quarter of
2023 were RMB54.1 billion (US$7.5 billion), an increase of 30.1%
from the second quarter of 2022.
- Income
from operations for the second quarter of 2023 was RMB8.3
billion (US$1.1 billion), compared to RMB3.8 billion for the same
period last year. Non-GAAP2
income from operations was RMB8.7 billion (US$1.2
billion) for the second quarter of 2023, as compared to RMB5.8
billion for the second quarter of 2022. Operating margin of JD
Retail before unallocated items for the second quarter of 2023 was
3.2%, compared to 3.4% for the second quarter of 2022.
- Net
income attributable to the company's ordinary shareholders
for the second quarter of 2023 was RMB6.6 billion (US$0.9 billion),
compared to RMB4.4 billion for the same period last year.
Non-GAAP net income attributable to the company's ordinary
shareholders for the second quarter of 2023 was RMB8.6
billion (US$1.2 billion), as compared to RMB6.5 billion for the
same period last year.
- Diluted
net income per ADS for the second quarter of 2023 was
RMB4.15 (US$0.57), compared to RMB2.74 for the second quarter of
2022. Non-GAAP diluted net income per ADS for the
second quarter of 2023 was RMB5.39 (US$0.74), compared to RMB4.06
for the same period last year.
-
Operating cash flow for the twelve months ended
June 30, 2023 was RMB52.5 billion (US$7.2 billion), compared to
RMB51.1 billion for the twelve months ended June 30, 2022.
Free cash flow, which excludes the impact from JD
Baitiao receivables included in the operating cash flow, for the
twelve months ended June 30, 2023 was RMB33.5 billion (US$4.6
billion), compared to RMB27.7 billion for the twelve months ended
June 30, 2022.
“We reported a solid performance for the second
quarter both financially and operationally, thanks to JD.com's
enhanced business structure and leading supply chain capabilities,”
said Sandy Xu, Chief Executive Officer of JD.com. “We are also
encouraged to see the number of our marketplace merchants more than
doubled and reached a new record during the quarter, reflecting our
efforts to build a superior marketplace ecosystem, one of our
priorities to provide customers with enriched supplies at better
prices. I am confident that JD.com's commitment to providing the
utmost in selection, speed, quality and value will continue to
resonate with customers and set a strong foundation for our
long-term success.”
“JD.com delivered both revenues and
profitability ahead of our expectation in the second quarter, an
encouraging trend we are happy to see amidst our business
adjustment and a highly competitive market environment,” said Ian
Su Shan, Chief Financial Officer of JD.com. “In JD Retail, we
continued to gain market share in core categories of home
appliances and 3C, propelled by our supply chain advantages and
service quality, while supermarket category made steady progress as
expected to build a healthier business model. We are encouraged by
such solid results, and we will continue to further optimize JD’s
business model and invest in JD’s long term sustainable
growth.”
Business Highlights
Environment, Social and
Governance
- In June, JD.com
released its 2022 Environmental, Social, and Governance (“ESG”)
Report, covering the company’s progress in 2022 across corporate
governance, business ethics, green operations, green logistics,
consumer services and sustainable supply chain, among others. The
report highlights JD.com’s commitment to aligning its business
development strategy with the value proposition of building a
“responsible supply chain” and to continually enhancing its ESG
practices.
- In April, JD
Logistics launched the Supply Chain Emission Management Platform
(“SCEMP”), a validated carbon footprint management platform
incorporating over 140 types of carbon emission factors in road
transportation in China. The platform calculates carbon emissions
with higher granularity based on the actual routes of
transportation vehicles. The SCEMP aims to drive more enterprises
to reduce carbon emissions with enhanced efficiency and lower cost,
ultimately steering towards achieving the net-zero emission
target.
JD Retail
- During the JD 618
Grand Promotion, the company further upgraded its trade-in services
for home appliance and home goods, providing customers attractive
discounts, complimentary on-site disassembly and moving, and
integrated services covering delivery, installation, disassembly
and cleaning. These efforts not only improve JD.com’s user
experience, but also elevate the industry service standard for home
appliance and home goods.
- During the JD 618
Grand Promotion, the company opened two JD MALLs in Dongguan and
Kunming alongside thirteen city-level flagship home appliance and
electronics stores in eleven cities such as Chengdu, Tangshan,
Suzhou and Nanjing, as well as 724 JD home appliance stores in
lower-tier markets. The expansion strives to improve customers’
shopping experience, while further enriching the traditional retail
ecosystem.
- In the second
quarter, Italian luxury fashion brands Bottega Veneta and Missoni
both joined hands with JD.com and launched their official flagship
stores on the JD platform. Meanwhile, beauty brands including
Sisley, a French luxury skincare brand, and SkinCeuticals, a
science-based skincare brand of the L'Oreal Group, launched their
official flagship stores on JD.com. Others joining JD.com in the
quarter included Maison Margiela Fragrances, Byredo, Farmacy, and
Aesop, among others, further enriching the platform’s product
offerings to fully address customers’ diverse skincare needs.
JD Health
- In the second
quarter, JD Health expanded its collaborations with global
pharmaceutical companies, including Novartis and Novo Nordisk. By
further enhancing its cold chain and offline Direct to Patient
(“DTP”) omni-channel fulfillment capabilities, JD Health continues
to build up its industry-leading online retail channel for new
specialized medicines, which provides better accessibility to
patients in need.
- In April, JD Health
officially launched one of the first online medical centers
specializing in dermatology in China. The platform features online
clinics with over 40 leading experts in the dermatology field, in
addition to over 3,000 registered dermatologists from China’s
top-tier AAA hospitals. The platform has also assembled a team of
full-time dermatologists to provide around-the-clock support for
users’ inquiries related to skin issues.
- As a strategic
service offering of JD Health, JD Family Doctor completed its
products upgrade in June and launched a “year-round caring for
elderly” service. The service pairs an exclusive health caregiver
with each of the elderly users to monitor and manage their health
conditions throughout the year, and also provides customized health
management solutions to serve the elderly users in the long term.
Since 2023, the overall user satisfaction rate of JD Family Doctor
service has reached 99%.
JD Logistics
- In April, JD
Airlines launched a new all-cargo route between Beijing Daxing and
Shenzhen. With the new all-cargo flights operations between the two
destinations, JD Airlines is positioned to provide reliable
next-morning delivery services in key cities in the
Beijing-Tianjin-Hebei region and the Pearl River Delta region.
- In June, phase II
of JD Logistics Kunshan Asia No.1 smart industrial park (“Kunshan
Asia No.1”) officially commenced operation. During the JD 618 Grand
Promotion this year, Kunshan Asia No.1's sorting capacity ramped up
to an average of over 4.5 million parcels per day, representing the
world’s leading level.
- As of June 30,
2023, JD Logistics operated over 1,600 warehouses. Including
warehouse space managed through the Open Warehouse Platform, JD
Logistics’s warehouse network had an aggregate gross floor area of
over 32 million square meters.3
Dada
- In April, JDDJ
emerged as one of the first on-demand retail service providers to
support the launch of Xiaomi 13 Ultra smartphones. JDDJ brought
customers a convenient shopping experience with one-hour delivery
for in-stock products.
- During the JD
618 Grand Promotion, JDDJ saw an 80% year-over-year increase in the
number of collaborated offline stores, along with triple-digit
year-over-year GMV growth in categories including home appliance,
computers, cosmetics, sports and outdoors, and liquor, further
diversifying the platform’s supplies and ecosystem. Additionally,
the provision of JDDJ’s “Shop Now” services reached customers in
over 2,000 counties, districts, and cities during the
promotion.
Second Quarter 2023 Financial
Results
Net Revenues. For
the second quarter of 2023, JD.com reported net revenues of
RMB287.9 billion (US$39.7 billion), representing a 7.6% increase
from the same period of 2022. Net product revenues increased by
3.5%, while net service revenues increased by 30.1% for the second
quarter of 2023, as compared to the same period of 2022.
Cost of
Revenues. Cost of revenues increased by
6.4% to RMB246.5 billion (US$34.0 billion) for the second quarter
of 2023 from RMB231.7 billion for the second quarter of 2022.
Fulfillment
Expenses. Fulfillment expenses, which
primarily include procurement, warehousing, delivery, customer
service and payment processing expenses, increased by 2.3% to
RMB16.7 billion (US$2.3 billion) for the second quarter of 2023
from RMB16.3 billion for the second quarter of 2022. Fulfillment
expenses as a percentage of net revenues was 5.8% for the second
quarter of 2023, compared to 6.1% for the same period last
year.
Marketing
Expenses. Marketing expenses increased by
16.7% to RMB11.1 billion (US$1.5 billion) for the second quarter of
2023 from RMB9.5 billion for the second quarter of 2022, marketing
expenses as a percentage of net revenues was 3.8% for the second
quarter of 2023, compared to 3.5% for the same period last year,
mainly due to the increased spending in promotion activities.
Research and Development
Expenses. Research and development
expenses increased by 1.1% to RMB4.1 billion (US$0.6 billion) for
the second quarter of 2023 from RMB4.0 billion for the second
quarter of 2022. Research and development expenses as a percentage
of net revenues was 1.4% for the second quarter of 2023, compared
to 1.5% for the same period last year.
General and Administrative
Expenses. General and
administrative expenses increased by 1.5% to RMB2.4 billion (US$0.3
billion) for the second quarter of 2023 from RMB2.3 billion for the
second quarter of 2022. General and administrative expenses as a
percentage of net revenues was 0.8% for the second quarter of 2023,
compared to 0.9% for the same period last year.
Income from Operations and Non-GAAP
Income from Operations. Income from operations
for the second quarter of 2023 was RMB8.3 billion (US$1.1 billion),
compared to RMB3.8 billion for the same period last year. Non-GAAP
income from operations was RMB8.7 billion (US$1.2 billion) for the
second quarter of 2023, as compared to RMB5.8 billion for the
second quarter of 2022. Operating margin of JD Retail before
unallocated items for the second quarter of 2023 was 3.2%, compared
to 3.4% for the second quarter of 2022.
Non-GAAP EBITDA. Non-GAAP
EBITDA increased by 45.0% to RMB10.4 billion (US$1.4 billion) for
the second quarter of 2023 from RMB7.2 billion for the second
quarter of 2022.
Share of Results of Equity
Investees. Share of results of equity
investees was an income of RMB0.9 billion (US$0.1 billion) for the
second quarter of 2023, as compared to a loss of RMB1.6 billion for
the second quarter of 2022, primarily due to the increase in share
of profit and the decrease in impairment of equity method
investees.
Others, net. Other
non-operating income was RMB1.2 billion (US$0.2 billion) for the
second quarter of 2023, as compared to RMB3.6 billion for the
second quarter of 2022. The decrease was primarily due to net
losses arising from fair value changes of investment securities,
compared to net gains in the same quarter last year, and the
increase in impairment of investments.
Net Income Attributable
to the Company's Ordinary Shareholders and
Non-GAAP Net Income Attributable to the Company's
Ordinary Shareholders. Net income
attributable to the company's ordinary shareholders for the second
quarter of 2023 was RMB6.6 billion (US$0.9 billion), compared to
RMB4.4 billion for the same period last year. Non-GAAP net income
attributable to the company's ordinary shareholders for the second
quarter of 2023 was RMB8.6 billion (US$1.2 billion), as compared to
RMB6.5 billion for the same period last year.
Diluted EPS and Non-GAAP Diluted
EPS. Diluted net income per ADS for the second quarter of
2023 was RMB4.15 (US$0.57), compared to RMB2.74 for the second
quarter of 2022. Non-GAAP diluted net income per ADS for the second
quarter of 2023 was RMB5.39 (US$0.74), compared to RMB4.06 for the
second quarter of 2022.
Cash Flow and Working Capital
As of June 30, 2023, the company’s cash and cash
equivalents, restricted cash and short-term investments totaled
RMB243.3 billion (US$33.5 billion), compared to RMB226.2 billion as
of December 31, 2022. For the second quarter of 2023, free cash
flow of the company was as follows:
|
|
For the three months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
|
(In millions) |
|
|
|
Net cash provided by operating activities |
|
33,667 |
|
46,511 |
|
6,414 |
|
Add: Impact from JD Baitiao
receivables included in the operating cash flow |
|
1,802 |
|
1,586 |
|
219 |
|
Less: Capital expenditures,
net of related sales proceeds |
|
|
|
|
Capital expenditures for development properties |
|
(4,947 |
) |
(2,363 |
) |
(326 |
) |
Other capital expenditures* |
|
(513 |
) |
(1,244 |
) |
(172 |
) |
Free cash flow |
|
30,009 |
|
44,490 |
|
6,135 |
|
|
|
|
|
|
* Including capital expenditures related to the
company’s headquarters in Beijing and all other CAPEX.
Net cash used in investing activities was
RMB28.1 billion (US$3.9 billion) for the second quarter of 2023,
consisting primarily of the increase in short-term investments and
time deposits, and cash paid for capital expenditures.
Net cash used in financing activities was RMB1.8
billion (US$0.3 billion) for the second quarter of 2023, consisting
primarily of cash paid for dividends, partially offset by the net
proceeds from bank loans.
For the twelve months ended June 30, 2023, free
cash flow of the company was as follows:
|
|
For the twelve months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
|
(In millions) |
|
|
|
Net cash provided by operating activities |
|
51,102 |
|
52,541 |
|
7,246 |
|
(Less)/Add: Impact from JD
Baitiao receivables included in the operating cash flow |
|
(1,956 |
) |
692 |
|
95 |
|
Less: Capital expenditures,
net of related sales proceeds |
|
|
|
|
Capital expenditures for development properties |
|
(16,637 |
) |
(14,390 |
) |
(1,985 |
) |
Other capital expenditures |
|
(4,849 |
) |
(5,372 |
) |
(741 |
) |
Free cash flow |
|
27,660 |
|
33,471 |
|
4,615 |
|
|
|
|
|
|
|
|
|
Supplemental Information
The company reports four segments, JD Retail, JD
Logistics, Dada and New businesses. JD Retail, including JD Health
and JD Industrials, among other components, mainly engage in online
retail, online marketplace and marketing services in China. JD
Logistics includes both internal and external logistics businesses.
Dada is a local on-demand delivery and retail platform in China.
New businesses mainly include JD Property, Jingxi and overseas
businesses.
The table below sets forth the segment operating
results:
|
For the three months ended |
|
For the six months ended |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
(In millions, except percentage data) |
Net revenues: |
|
|
|
|
|
|
|
JD Retail |
241,557 |
|
253,280 |
|
34,929 |
|
|
459,081 |
|
465,638 |
|
64,214 |
|
JD Logistics |
31,272 |
|
41,033 |
|
5,659 |
|
|
58,623 |
|
77,761 |
|
10,724 |
|
Dada |
2,281 |
|
2,811 |
|
388 |
|
|
2,969 |
|
5,387 |
|
743 |
|
New businesses |
6,265 |
|
4,316 |
|
595 |
|
|
12,020 |
|
7,766 |
|
1,071 |
|
Inter-segment eliminations * |
(13,775 |
) |
(13,509 |
) |
(1,863 |
) |
|
(25,438 |
) |
(25,665 |
) |
(3,539 |
) |
Total consolidated net
revenues |
267,600 |
|
287,931 |
|
39,708 |
|
|
507,255 |
|
530,887 |
|
73,213 |
|
|
|
|
|
|
|
|
|
Operating income/(loss): |
|
|
|
|
|
|
|
JD Retail |
8,173 |
|
8,143 |
|
1,123 |
|
|
16,064 |
|
17,987 |
|
2,481 |
|
JD Logistics |
36 |
|
510 |
|
70 |
|
|
(625 |
) |
(613 |
) |
(85 |
) |
Dada |
(424 |
) |
(29 |
) |
(4 |
) |
|
(616 |
) |
(246 |
) |
(34 |
) |
New businesses |
(2,032 |
) |
1,061 |
|
145 |
|
|
(4,418 |
) |
904 |
|
123 |
|
Including: gain on sale of
development properties |
— |
|
1,009 |
|
139 |
|
|
— |
|
1,481 |
|
204 |
|
Total segment operating
income |
5,753 |
|
9,685 |
|
1,334 |
|
|
10,405 |
|
18,032 |
|
2,485 |
|
Unallocated items** |
(1,995 |
) |
(1,415 |
) |
(194 |
) |
|
(4,239 |
) |
(3,335 |
) |
(459 |
) |
Total consolidated operating
income |
3,758 |
|
8,270 |
|
1,140 |
|
|
6,166 |
|
14,697 |
|
2,026 |
|
|
|
|
|
|
|
|
|
Operating margin: |
|
|
|
|
|
|
|
JD Retail |
3.4 |
% |
3.2 |
% |
3.2 |
% |
|
3.5 |
% |
3.9 |
% |
3.9 |
% |
JD Logistics |
0.1 |
% |
1.2 |
% |
1.2 |
% |
|
(1.1 |
)% |
(0.8 |
)% |
(0.8 |
)% |
Dada |
(18.6 |
)% |
(1.0 |
)% |
(1.0 |
)% |
|
(20.7 |
)% |
(4.6 |
)% |
(4.6 |
)% |
New businesses |
(32.4 |
)% |
24.6 |
% |
24.6 |
% |
|
(36.8 |
)% |
11.6 |
% |
11.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The inter-segment eliminations mainly consist
of revenues from supply chain solutions and logistics services
provided by JD Logistics to JD Retail, on-demand delivery and
retail services provided by Dada to JD Retail and JD Logistics, and
property leasing services provided by JD Property to JD
Logistics.
** Unallocated items include share-based
compensation, amortization of intangible assets resulting from
assets and business acquisitions, effects of business cooperation
arrangements, and impairment of goodwill and intangible assets,
which are not allocated to segments.
The table below sets forth the revenue
information:
|
For the three months ended |
|
For the six months ended |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
(In millions) |
|
(In millions) |
Electronics and home
appliances revenues |
136,618 |
152,131 |
20,980 |
|
254,986 |
269,130 |
37,115 |
General merchandise
revenues |
89,402 |
81,724 |
11,270 |
|
175,450 |
160,289 |
22,105 |
Net product revenues |
226,020 |
233,855 |
32,250 |
|
430,436 |
429,419 |
59,220 |
|
|
|
|
|
|
|
|
Marketplace and marketing
revenues |
20,742 |
22,509 |
3,104 |
|
38,418 |
41,571 |
5,733 |
Logistics and other service
revenues |
20,838 |
31,567 |
4,354 |
|
38,401 |
59,897 |
8,260 |
Net service revenues |
41,580 |
54,076 |
7,458 |
|
76,819 |
101,468 |
13,993 |
|
|
|
|
|
|
|
|
Total net revenues |
267,600 |
287,931 |
39,708 |
|
507,255 |
530,887 |
73,213 |
|
|
|
|
|
|
|
|
Conference Call
JD.com’s management will hold a conference call
at 8:00 am, Eastern Time on August 16, 2023, (8:00 pm, Beijing/Hong
Kong Time on August 16, 2023) to discuss its financial results for
the three months and six months ended June 30, 2023.
Please register in advance of the conference
using the link provided below and dial in 15 minutes prior to the
call, using participant dial-in numbers, the Passcode and unique
access PIN which would be provided upon registering. You will be
automatically linked to the live call after completion of this
process, unless required to provide the conference ID below due to
regional restrictions.
PRE-REGISTER LINK:
https://s1.c-conf.com/diamondpass/10032645-3wu7ql.html
CONFERENCE ID: 10032645
A telephone replay will be available for one
week until August 23, 2023. The dial-in details are as follows:
US: |
+1-855-883-1031 |
International: |
+61-7-3107-6325 |
Hong Kong: |
800-930-639 |
Mainland China: |
400-120-9216 |
Passcode: |
10032645 |
|
|
Additionally, a live and archived webcast of the conference call
will also be available on the JD.com’s investor relations website
at http://ir.jd.com.
About JD.com
JD.com is a leading supply chain-based
technology and service provider. The company’s cutting-edge retail
infrastructure seeks to enable consumers to buy whatever they want,
whenever and wherever they want it. The company has opened its
technology and infrastructure to partners, brands and other
sectors, as part of its Retail as a Service offering to help drive
productivity and innovation across a range of industries.
Non-GAAP Measures
In evaluating the business, the company
considers and uses non-GAAP measures, such as non-GAAP
income/(loss) from operations, non-GAAP operating margin, non-GAAP
net income/(loss) attributable to the company's ordinary
shareholders, non-GAAP net margin to the company’s ordinary
shareholders, free cash flow, non-GAAP EBITDA, non-GAAP EBITDA
margin, non-GAAP net income/(loss) per share and non-GAAP net
income/(loss) per ADS, as supplemental measures to review and
assess operating performance. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for the financial information prepared and
presented in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”). The company
defines non-GAAP income/(loss) from operations as income/(loss)
from operations excluding share-based compensation, amortization of
intangible assets resulting from assets and business acquisitions,
effects of business cooperation arrangements, gain on sale of
development properties and impairment of goodwill and intangible
assets. The company defines non-GAAP net income/(loss) attributable
to the company's ordinary shareholders as net income/(loss)
attributable to the company's ordinary shareholders excluding
share-based compensation, amortization of intangible assets
resulting from assets and business acquisitions, effects of
business cooperation arrangements and non-compete agreements,
gain/(loss) on disposals/deemed disposals of investments and
others, reconciling items on the share of equity method
investments, loss/(gain) from fair value change of long-term
investments, impairment of goodwill, intangible assets and
investments, gain in relation to sale of development properties and
tax effects on non-GAAP adjustments. The company defines free cash
flow as operating cash flow adjusting the impact from JD Baitiao
receivables included in the operating cash flow and capital
expenditures, net of the proceeds from sale of development
properties. Capital expenditures include purchase of property,
equipment and software, cash paid for construction in progress,
purchase of intangible assets and land use rights. The company
defines non-GAAP EBITDA as non-GAAP income/(loss) from operations
plus depreciation and amortization excluding amortization of
intangible assets resulting from assets and business acquisitions.
Non-GAAP basic net income/(loss) per share is calculated by
dividing non-GAAP net income/(loss) attributable to the company's
ordinary shareholders by the weighted average number of ordinary
shares outstanding during the periods. Non-GAAP diluted net
income/(loss) per share is calculated by dividing non-GAAP net
income/(loss) attributable to the company's ordinary shareholders
by the weighted average number of ordinary shares and dilutive
potential ordinary shares outstanding during the periods, including
the dilutive effect of share-based awards as determined under the
treasury stock method. Non-GAAP net income/(loss) per ADS is equal
to non-GAAP net income/(loss) per share multiplied by two.
The company presents these non-GAAP financial
measures because they are used by management to evaluate operating
performance and formulate business plans. Non-GAAP income/(loss)
from operations, non-GAAP net income/(loss) attributable to the
company's ordinary shareholders and non-GAAP EBITDA reflect the
company’s ongoing business operations in a manner that allows more
meaningful period-to-period comparisons. Free cash flow enables
management to assess liquidity and cash flow while taking into
account the impact from JD Baitiao receivables included in the
operating cash flow and the demands that the expansion of
fulfillment infrastructure and technology platform has placed on
financial resources. The company believes that the use of the
non-GAAP financial measures facilitates investors to understand and
evaluate the company’s current operating performance and future
prospects in the same manner as management does, if they so choose.
The company also believes that the non-GAAP financial measures
provide useful information to both management and investors by
excluding certain expenses, gain/loss and other items that are not
expected to result in future cash payments or that are
non-recurring in nature or may not be indicative of the company’s
core operating results and business outlook.
The non-GAAP financial measures have limitations
as analytical tools. The company’s non-GAAP financial measures do
not reflect all items of income and expense that affect the
company’s operations or not represent the residual cash flow
available for discretionary expenditures. Further, these non-GAAP
measures may differ from the non-GAAP information used by other
companies, including peer companies, and therefore their
comparability may be limited. The company compensates for these
limitations by reconciling the non-GAAP financial measures to the
nearest U.S. GAAP performance measure, all of which should be
considered when evaluating performance. The company encourages you
to review the company’s financial information in its entirety and
not rely on a single financial measure.
CONTACTS:
Investor RelationsSean Zhang+86
(10) 8912-6804IR@JD.com
Media Relations+86 (10)
8911-6155Press@JD.com
Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “future,”
“intends,” “plans,” “believes,” “estimates,” “confident” and
similar statements. Among other things, the quotations from
management in this announcement, as well as JD.com’s strategic and
operational plans, contain forward-looking statements. JD.com may
also make written or oral forward-looking statements in its
periodic reports to the U.S. Securities and Exchange Commission
(the “SEC”), in announcements made on the website of the Hong Kong
Stock Exchange, in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about JD.com’s
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: JD.com’s
growth strategies; its future business development, results of
operations and financial condition; its ability to attract and
retain new customers and to increase revenues generated from repeat
customers; its expectations regarding demand for and market
acceptance of its products and services; trends and competition in
China’s e-commerce market; changes in its revenues and certain cost
or expense items; the expected growth of the Chinese e-commerce
market; laws, regulations and governmental policies relating to the
industries in which JD.com or its business partners operate;
potential changes in laws, regulations and governmental policies or
changes in the interpretation and implementation of laws,
regulations and governmental policies that could adversely affect
the industries in which JD.com or its business partners operate,
including, among others, initiatives to enhance supervision of
companies listed on an overseas exchange and tighten scrutiny over
data privacy and data security; risks associated with JD.com’s
acquisitions, investments and alliances, including fluctuation in
the market value of JD.com’s investment portfolio; impact of the
COVID-19 pandemic; natural disasters and geopolitical events;
change in tax rates and financial risks; intensity of competition;
and general market and economic conditions in China and globally.
Further information regarding these and other risks is included in
JD.com’s filings with the SEC and the announcements on the website
of the Hong Kong Stock Exchange. All information provided herein is
as of the date of this announcement, and JD.com undertakes no
obligation to update any forward-looking statement, except as
required under applicable law.
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance Sheets |
(In millions, except otherwise noted) |
|
|
|
|
|
As of |
|
|
December 31,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
78,861 |
91,020 |
12,552 |
Restricted cash |
|
6,254 |
8,129 |
1,121 |
Short-term investments |
|
141,095 |
144,101 |
19,872 |
Accounts receivable, net (including JD |
|
|
|
|
Baitiao of RMB3.1 billion and RMB4.1 billion as of December 31,
2022 and June 30, 2023, respectively)(1) |
|
20,576 |
20,003 |
2,759 |
Advance to suppliers |
|
3,838 |
2,584 |
356 |
Inventories, net |
|
77,949 |
63,562 |
8,766 |
Prepayments and other current assets |
|
15,156 |
15,410 |
2,125 |
Amount due from related parties |
|
6,142 |
4,375 |
603 |
Assets held for sale |
|
1,203 |
— |
— |
Total current assets |
|
351,074 |
349,184 |
48,154 |
Non-current assets |
|
|
|
|
Property, equipment and software, net |
|
55,080 |
59,862 |
8,255 |
Construction in progress |
|
11,161 |
9,857 |
1,359 |
Intangible assets, net |
|
9,139 |
8,441 |
1,164 |
Land use rights, net |
|
33,848 |
37,752 |
5,206 |
Operating lease right-of-use assets |
|
22,267 |
22,396 |
3,089 |
Goodwill |
|
23,123 |
23,123 |
3,189 |
Investment in equity investees |
|
57,641 |
58,387 |
8,052 |
Investment securities |
|
11,611 |
6,260 |
863 |
Deferred tax assets |
|
1,536 |
1,506 |
208 |
Other non-current assets |
|
18,770 |
27,156 |
3,745 |
Total non-current assets |
|
244,176 |
254,740 |
35,130 |
Total assets |
|
595,250 |
603,924 |
83,284 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance Sheets |
(In millions, except otherwise noted) |
|
|
|
|
|
As of |
|
|
December 31,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Short-term debts |
|
12,146 |
17,951 |
2,476 |
Accounts payable |
|
160,607 |
152,011 |
20,963 |
Advance from customers |
|
33,713 |
31,649 |
4,365 |
Deferred revenues |
|
3,351 |
2,476 |
341 |
Taxes payable |
|
5,926 |
7,563 |
1,043 |
Amount due to related parties |
|
488 |
180 |
25 |
Accrued expenses and other current liabilities |
|
42,570 |
39,923 |
5,504 |
Operating lease liabilities |
|
7,688 |
7,945 |
1,096 |
Liabilities held for sale |
|
72 |
— |
— |
Total current liabilities |
|
266,561 |
259,698 |
35,813 |
Non-current liabilities |
|
|
|
|
Deferred revenues |
|
1,107 |
1,081 |
149 |
Unsecured senior notes |
|
10,224 |
10,614 |
1,464 |
Deferred tax liabilities |
|
6,511 |
7,213 |
995 |
Long-term borrowings |
|
20,009 |
21,450 |
2,958 |
Operating lease liabilities |
|
14,978 |
14,981 |
2,066 |
Other non-current liabilities |
|
1,737 |
1,597 |
220 |
Total non-current liabilities |
|
54,566 |
56,936 |
7,852 |
Total liabilities |
|
321,127 |
316,634 |
43,665 |
|
|
|
|
|
MEZZANINE EQUITY |
|
590 |
595 |
82 |
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
Total JD.com, Inc. shareholders’ equity (US$0.00002 par value,
100,000 million shares authorized, 3,183 million shares issued and
3,146 million shares outstanding as of June 30, 2023) |
|
213,366 |
221,786 |
30,586 |
Non-controlling interests |
|
60,167 |
64,909 |
8,951 |
Total shareholders’ equity |
|
273,533 |
286,695 |
39,537 |
Total liabilities, mezzanine equity and shareholders’
equity |
|
595,250 |
603,924 |
83,284 |
|
|
|
|
|
(1) JD Technology
performs credit risk assessment services for JD Baitiao business
and absorbs the credit risk of the underlying Baitiao receivables.
Facilitated by JD Technology, the company periodically securitizes
Baitiao receivables through the transfer of those assets to
securitization plans and derecognizes the related Baitiao
receivables through sales type arrangements. |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In millions, except per share data) |
|
|
For the three months ended |
|
For the six months ended |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
Net
revenues |
|
|
|
|
|
|
|
Net product revenues |
226,020 |
|
233,855 |
|
32,250 |
|
|
430,436 |
|
429,419 |
|
59,220 |
|
Net service revenues |
41,580 |
|
54,076 |
|
7,458 |
|
|
76,819 |
|
101,468 |
|
13,993 |
|
Total net
revenues |
267,600 |
|
287,931 |
|
39,708 |
|
|
507,255 |
|
530,887 |
|
73,213 |
|
Cost of revenues |
(231,706 |
) |
(246,498 |
) |
(33,994 |
) |
|
(437,915 |
) |
(453,436 |
) |
(62,532 |
) |
Fulfillment |
(16,308 |
) |
(16,679 |
) |
(2,300 |
) |
|
(31,793 |
) |
(32,050 |
) |
(4,420 |
) |
Marketing |
(9,477 |
) |
(11,063 |
) |
(1,526 |
) |
|
(18,182 |
) |
(19,068 |
) |
(2,630 |
) |
Research and development |
(4,027 |
) |
(4,072 |
) |
(562 |
) |
|
(8,411 |
) |
(8,258 |
) |
(1,139 |
) |
General and administrative |
(2,324 |
) |
(2,358 |
) |
(325 |
) |
|
(4,788 |
) |
(4,859 |
) |
(670 |
) |
Gain on sale of development properties |
— |
|
1,009 |
|
139 |
|
|
— |
|
1,481 |
|
204 |
|
Income from
operation(2)(3) |
3,758 |
|
8,270 |
|
1,140 |
|
|
6,166 |
|
14,697 |
|
2,026 |
|
Other
income/(expenses) |
|
|
|
|
|
|
|
Share of results of equity investees |
(1,604 |
) |
907 |
|
125 |
|
|
(2,685 |
) |
86 |
|
12 |
|
Interest expense |
(484 |
) |
(654 |
) |
(90 |
) |
|
(828 |
) |
(1,244 |
) |
(172 |
) |
Others, net(4) |
3,586 |
|
1,211 |
|
167 |
|
|
(312 |
) |
4,003 |
|
552 |
|
Income before
tax |
5,256 |
|
9,734 |
|
1,342 |
|
|
2,341 |
|
17,542 |
|
2,418 |
|
Income tax expenses |
(1,227 |
) |
(2,811 |
) |
(388 |
) |
|
(1,831 |
) |
(4,420 |
) |
(610 |
) |
Net
income |
4,029 |
|
6,923 |
|
954 |
|
|
510 |
|
13,122 |
|
1,808 |
|
Net income/(loss) attributable
to non-controlling interests shareholders |
(350 |
) |
342 |
|
47 |
|
|
(883 |
) |
280 |
|
39 |
|
Net income attributable to
mezzanine equity classified as non-controlling interests
shareholders |
3 |
|
— |
|
— |
|
|
8 |
|
— |
|
— |
|
Net income
attributable to the company's ordinary shareholders |
4,376 |
|
6,581 |
|
907 |
|
|
1,385 |
|
12,842 |
|
1,769 |
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
Basic |
1.40 |
|
2.09 |
|
0.29 |
|
|
0.45 |
|
4.09 |
|
0.56 |
|
Diluted |
1.37 |
|
2.08 |
|
0.29 |
|
|
0.43 |
|
4.04 |
|
0.56 |
|
Net income per ADS: |
|
|
|
|
|
|
|
Basic |
2.80 |
|
4.19 |
|
0.58 |
|
|
0.89 |
|
8.18 |
|
1.13 |
|
Diluted |
2.74 |
|
4.15 |
|
0.57 |
|
|
0.85 |
|
8.08 |
|
1.11 |
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In millions, except per share data) |
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
(2) Includes share-based compensation expenses as follows: |
Cost of revenues |
|
(28 |
) |
(27 |
) |
(4 |
) |
|
(59 |
) |
(64 |
) |
(9 |
) |
Fulfillment |
|
(200 |
) |
(132 |
) |
(18 |
) |
|
(427 |
) |
(331 |
) |
(46 |
) |
Marketing |
|
(149 |
) |
(83 |
) |
(11 |
) |
|
(298 |
) |
(218 |
) |
(30 |
) |
Research and development |
|
(325 |
) |
(155 |
) |
(21 |
) |
|
(740 |
) |
(487 |
) |
(67 |
) |
General and administrative |
|
(875 |
) |
(580 |
) |
(81 |
) |
|
(1,904 |
) |
(1,351 |
) |
(186 |
) |
Total |
|
(1,577 |
) |
(977 |
) |
(135 |
) |
|
(3,428 |
) |
(2,451 |
) |
(338 |
) |
|
|
|
|
|
|
|
|
|
(3) Includes amortization of business cooperation arrangement and
intangible assets resulting from assets and business acquisitions
as follows: |
Fulfillment |
|
(107 |
) |
(103 |
) |
(14 |
) |
|
(180 |
) |
(208 |
) |
(28 |
) |
Marketing |
|
(219 |
) |
(220 |
) |
(30 |
) |
|
(436 |
) |
(439 |
) |
(60 |
) |
Research and development |
|
(60 |
) |
(83 |
) |
(11 |
) |
|
(98 |
) |
(173 |
) |
(24 |
) |
General and administrative |
|
(32 |
) |
(32 |
) |
(4 |
) |
|
(97 |
) |
(64 |
) |
(9 |
) |
Total |
|
(418 |
) |
(438 |
) |
(59 |
) |
|
(811 |
) |
(884 |
) |
(121 |
) |
|
|
|
|
|
|
|
|
|
(4) Others, net
are other non-operating income/(loss), primarily consist of
gains/(losses) from fair value change of long-term investments,
gains/(losses) from business and investment disposals, impairment
of investments, government incentives, foreign exchange
gains/(losses), interest income and gains/(losses) from fair value
change of short-term investments. |
JD.com, Inc. |
Unaudited Non-GAAP Net Income Per Share and Per ADS |
(In millions, except per share data) |
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to the company's ordinary shareholders |
|
6,489 |
8,557 |
1,180 |
|
10,521 |
16,148 |
2,225 |
|
|
|
|
|
|
|
|
|
Weighted average
number of shares: |
|
|
|
|
|
|
|
|
Basic |
|
3,121 |
3,143 |
3,143 |
|
3,119 |
3,141 |
3,141 |
Diluted |
|
3,176 |
3,166 |
3,166 |
|
3,182 |
3,173 |
3,173 |
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per share: |
|
|
|
|
|
|
|
|
Basic |
|
2.08 |
2.72 |
0.38 |
|
3.37 |
5.14 |
0.71 |
Diluted |
|
2.03 |
2.70 |
0.37 |
|
3.29 |
5.08 |
0.70 |
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per ADS: |
|
|
|
|
|
|
|
|
Basic |
|
4.16 |
5.44 |
0.75 |
|
6.75 |
10.28 |
1.42 |
Diluted |
|
4.06 |
5.39 |
0.74 |
|
6.58 |
10.16 |
1.40 |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of Cash Flows
and Free Cash Flow |
(In millions) |
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
33,667 |
|
46,511 |
|
6,414 |
|
|
30,182 |
|
24,904 |
|
3,434 |
|
Net cash used in investing
activities |
|
(30,926 |
) |
(28,127 |
) |
(3,879 |
) |
|
(26,364 |
) |
(11,435 |
) |
(1,577 |
) |
Net cash provided by/(used in)
financing activities |
|
(11,309 |
) |
(1,832 |
) |
(253 |
) |
|
1,386 |
|
(577 |
) |
(80 |
) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
3,126 |
|
1,827 |
|
252 |
|
|
2,668 |
|
1,101 |
|
152 |
|
Net increase/(decrease) in
cash, cash equivalents and restricted cash |
|
(5,442 |
) |
18,379 |
|
2,534 |
|
|
7,872 |
|
13,993 |
|
1,929 |
|
Cash, cash equivalents and
restricted cash at beginning of period, including cash and cash
equivalents classified within assets held for sale |
|
90,006 |
|
80,770 |
|
11,139 |
|
|
76,692 |
|
85,156 |
|
11,744 |
|
Less: cash, cash equivalents,
and restricted cash classified within assets held for sale at
beginning of period |
|
— |
|
— |
|
— |
|
|
— |
|
(41 |
) |
(6 |
) |
Cash, cash equivalents, and
restricted cash at beginning of period |
|
90,006 |
|
80,770 |
|
11,139 |
|
|
76,692 |
|
85,115 |
|
11,738 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
84,564 |
|
99,149 |
|
13,673 |
|
|
84,564 |
|
99,149 |
|
13,673 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities |
|
33,667 |
|
46,511 |
|
6,414 |
|
|
30,182 |
|
24,904 |
|
3,434 |
|
Add: Impact from JD Baitiao
receivables included in the operating cash flow |
|
1,802 |
|
1,586 |
|
219 |
|
|
68 |
|
1,004 |
|
138 |
|
Less: Capital expenditures,
net of related sales proceeds |
|
|
|
|
|
|
|
|
Capital expenditures for
development properties |
|
(4,947 |
) |
(2,363 |
) |
(326 |
) |
|
(7,623 |
) |
(4,508 |
) |
(622 |
) |
Other capital
expenditures |
|
(513 |
) |
(1,244 |
) |
(172 |
) |
|
(1,415 |
) |
(2,312 |
) |
(319 |
) |
Free cash flow |
|
30,009 |
|
44,490 |
|
6,135 |
|
|
21,212 |
|
19,088 |
|
2,631 |
|
JD.com, Inc. |
Supplemental Financial Information and Business Metrics |
(In RMB billions, except turnover days data) |
|
|
|
Q2 2022 |
Q3 2022 |
Q4 2022 |
Q1 2023 |
Q2 2023 |
Cash flow and turnover days |
|
|
|
|
|
|
Operating cash flow – trailing twelve months (“TTM”) |
|
51.1 |
45.8 |
57.8 |
39.7 |
52.5 |
Free cash flow – TTM |
|
27.7 |
25.8 |
35.6 |
19.0 |
33.5 |
Inventory turnover days(5) – TTM |
|
31.5 |
31.7 |
33.2 |
32.4 |
31.7 |
Accounts payable turnover days(6) – TTM |
|
49.4 |
50.4 |
52.5 |
51.3 |
52.8 |
Accounts receivable turnover days(7) – TTM |
|
3.6 |
4.0 |
4.5 |
4.8 |
5.0 |
|
(5) TTM inventory turnover days are the quotient of average
inventory over the immediately preceding five quarters, up to and
including the last quarter of the period, to cost of revenues of
retail business for the last twelve months, and then multiplied by
360 days.(6) TTM accounts payable turnover days are the quotient of
average accounts payable for retail business over the immediately
preceding five quarters, up to and including the last quarter of
the period, to cost of revenues of retail business for the last
twelve months, and then multiplied by 360 days. (7) TTM accounts
receivable turnover days are the quotient of average accounts
receivable over the immediately preceding five quarters, up to and
including the last quarter of the period, to total net revenues for
the last twelve months and then multiplied by 360 days. Presented
are the accounts receivable turnover days excluding the impact from
JD Baitiao. |
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP Results |
(In millions, except percentage data) |
|
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
Income from operations |
|
3,758 |
|
8,270 |
|
1,140 |
|
|
6,166 |
|
14,697 |
|
2,026 |
|
Add: Share-based
compensation |
|
1,577 |
|
977 |
|
135 |
|
|
3,428 |
|
2,451 |
|
338 |
|
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
291 |
|
327 |
|
44 |
|
|
549 |
|
663 |
|
91 |
|
Add: Effects of business
cooperation arrangements |
|
127 |
|
111 |
|
15 |
|
|
262 |
|
221 |
|
30 |
|
Reversal of: Gain on sale of
development properties |
|
— |
|
(1,009 |
) |
(139 |
) |
|
— |
|
(1,481 |
) |
(204 |
) |
Non-GAAP income from
operations |
|
5,753 |
|
8,676 |
|
1,195 |
|
|
10,405 |
|
16,551 |
|
2,281 |
|
Add: Depreciation and other
amortization |
|
1,422 |
|
1,727 |
|
239 |
|
|
2,836 |
|
3,351 |
|
462 |
|
Non-GAAP EBITDA |
|
7,175 |
|
10,403 |
|
1,434 |
|
|
13,241 |
|
19,902 |
|
2,743 |
|
|
|
|
|
|
|
|
|
|
Total net revenues |
|
267,600 |
|
287,931 |
|
39,708 |
|
|
507,255 |
|
530,887 |
|
73,213 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
margin |
|
2.1 |
% |
3.0 |
% |
3.0 |
% |
|
2.1 |
% |
3.1 |
% |
3.1 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP EBITDA
margin |
|
2.7 |
% |
3.6 |
% |
3.6 |
% |
|
2.6 |
% |
3.7 |
% |
3.7 |
% |
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP Results |
(In millions, except percentage data) |
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
June 30,2022 |
June 30,2023 |
June 30,2023 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
Net income attributable to the company's ordinary shareholders |
|
4,376 |
|
6,581 |
|
907 |
|
|
1,385 |
|
12,842 |
|
1,769 |
|
Add: Share-based
compensation |
|
1,314 |
|
739 |
|
102 |
|
|
2,907 |
|
1,995 |
|
275 |
|
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
201 |
|
159 |
|
22 |
|
|
399 |
|
381 |
|
53 |
|
Add/(Reversal of): Reconciling
items on the share of equity method investments(8) |
|
441 |
|
(139 |
) |
(19 |
) |
|
830 |
|
701 |
|
97 |
|
Add: Impairment of goodwill,
intangible assets, and investments |
|
1,257 |
|
1,362 |
|
188 |
|
|
1,257 |
|
1,388 |
|
191 |
|
(Reversal of)/Add: (Gain)/Loss
from fair value change of long-term investments |
|
(1,069 |
) |
488 |
|
67 |
|
|
165 |
|
(388 |
) |
(54 |
) |
Reversal of: Gain on sale of
development properties |
|
— |
|
(756 |
) |
(104 |
) |
|
— |
|
(1,120 |
) |
(154 |
) |
(Reversal of) /Add: Net
(gain)/loss on disposals/deemed disposals of investments and
others |
|
(31 |
) |
(29 |
) |
(4 |
) |
|
3,518 |
|
(50 |
) |
(7 |
) |
Add: Effects of business
cooperation arrangements and non-compete agreements |
|
127 |
|
111 |
|
15 |
|
|
250 |
|
221 |
|
30 |
|
(Reversal of)/Add: Tax effects
on non-GAAP adjustments |
|
(127 |
) |
41 |
|
6 |
|
|
(190 |
) |
178 |
|
25 |
|
Non-GAAP net income
attributable to the company's ordinary shareholders |
|
6,489 |
|
8,557 |
|
1,180 |
|
|
10,521 |
|
16,148 |
|
2,225 |
|
|
|
|
|
|
|
|
|
|
Total net revenues |
|
267,600 |
|
287,931 |
|
39,708 |
|
|
507,255 |
|
530,887 |
|
73,213 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net margin to
the company’s ordinary shareholders |
|
2.4 |
% |
3.0 |
% |
3.0 |
% |
|
2.1 |
% |
3.0 |
% |
3.0 |
% |
(8) To exclude the GAAP to non-GAAP reconciling items on the share
of equity method investments, and share of amortization of
intangibles not on their books. |
|
Reconciliation between U.S. GAAP and
International Financial Reporting Standards
Deloitte Touche Tohmatsu was engaged by the
company to conduct limited assurance engagement in accordance with
Hong Kong Standard on Assurance Engagements 3000 (Revised)
"Assurance Engagements Other Than Audits or Reviews of Historical
Financial Information" ("HKSAE 3000 (Revised)") issued by the Hong
Kong Institute of Certified Public Accountants (the "HKICPA") on
the reconciliation of the condensed consolidated statement of
operations for the six months ended June 30, 2023 and the condensed
consolidated balance sheet as at June 30, 2023 of the company and
its subsidiaries (collectively referred to as the "Group") between
the accounting policies adopted by the Group of the relevant period
in accordance with the accounting principles generally accepted in
the United States of America (the "U.S. GAAP") and the
International Financial Reporting Standards (the "IFRSs") issued by
the International Accounting Standards Board (together, the
"Reconciliation").
The limited assurance engagement undertaken in
accordance with HKSAE 3000 (Revised) involves performing procedures
to obtain sufficient appropriate evidence about whether:
- the related adjustments and
reclassifications give appropriate effect to those criteria;
and
- the Reconciliation reflects the
proper application of the adjustments and reclassifications to the
differences between the Group's accounting policies in accordance
with the U.S. GAAP and the IFRSs.
The procedures performed by Deloitte Touche
Tohmatsu were based on their professional judgment, having regard
to their understanding of the management’s process on preparing the
Reconciliation, nature, business performance and financial position
of the Group. Given the circumstances of the engagement, the
procedures performed included:
(i) Comparing the "Amounts as recorded under
U.S. GAAP" for the six months ended June 30, 2023 in the
Reconciliation as set out in the Appendix with the Interim 2023
Results prepared in accordance with the U.S. GAAP;(ii) Evaluating
the assessment made by the board of directors in identifying the
differences between the accounting policies in accordance with the
U.S. GAAP and the IFRSs, and the evidence supporting the
adjustments and reclassifications made in the Reconciliation in
arriving at the "Amounts as recorded under IFRSs" in the
Reconciliation as set out in the Appendix; and(iii) Checking the
arithmetic accuracy of the computation of the Reconciliation as set
out in the Appendix.
The procedures performed by Deloitte Touche
Tohmatsu in this limited assurance engagement vary in nature and
timing from, and are less in extent than for, a reasonable
assurance engagement. Consequently, the level of assurance obtained
in a limited assurance engagement is substantially lower than the
assurance that would have been obtained had a reasonable assurance
engagement been performed. Accordingly, Deloitte Touche Tohmatsu do
not express a reasonable assurance opinion.
Based on the procedures performed and evidence
obtained, Deloitte Touche Tohmatsu have concluded that nothing has
come to their attention that causes them to believe that:
(i) The "Amounts as recorded under U.S. GAAP"
for the six months ended June 30, 2023 in the Reconciliation as set
out in the Appendix is not in agreement with the Interim 2023
Results prepared in accordance with the U.S. GAAP;(ii) The
adjustments and reclassifications made in the Reconciliation in
arriving at the "Amounts as recorded under IFRSs" in the
Reconciliation as set out in the Appendix, do not reflect, in all
material respects, the different accounting treatments according to
the Group's accounting policies in accordance with the U.S. GAAP
and the IFRSs of the relevant period; and(iii) The computation of
the Reconciliation as set out in the Appendix is not arithmetically
accurate.
Appendix
|
|
|
For six months ended June 30, 2022 |
|
|
IFRSs adjustments |
|
|
Amounts as recorded under U.S. GAAP |
|
|
Preferred shares |
|
|
Investments measuredat fair value |
|
|
Share-based compensation |
|
Lease |
|
|
Amounts as recorded under IFRSs |
|
|
(RMB in millions) |
|
|
Note i |
Note ii |
Note iii |
|
Note iv |
|
Fulfillment |
(31,793 |
) |
|
- |
|
|
- |
|
|
- |
|
597 |
|
|
(31,196 |
) |
Marketing |
(18,182 |
) |
|
- |
|
|
- |
|
|
- |
|
2 |
|
|
(18,180 |
) |
Research and development |
(8,411 |
) |
|
- |
|
|
- |
|
|
- |
|
3 |
|
|
(8,408 |
) |
General and administrative |
(4,788 |
) |
|
- |
|
|
- |
|
|
- |
|
4 |
|
|
(4,784 |
) |
Income from
operations |
6,166 |
|
|
- |
|
|
- |
|
|
- |
|
606 |
|
|
6,772 |
|
Share of results of equity investees |
(2,685 |
) |
|
- |
|
|
279 |
|
|
- |
|
- |
|
|
(2,406 |
) |
Interest expense |
(828 |
) |
|
- |
|
|
- |
|
|
- |
|
(487 |
) |
|
(1,315 |
) |
Others, net |
(312 |
) |
|
- |
|
|
(2,380 |
) |
|
- |
|
- |
|
|
(2,692 |
) |
Fair value changes of preferred shares |
- |
|
|
(1,074 |
) |
|
- |
|
|
- |
|
- |
|
|
(1,074 |
) |
Income/(loss) before
tax |
2,341 |
|
|
(1,074 |
) |
|
(2,101 |
) |
|
- |
|
119 |
|
|
(715 |
) |
Income tax expenses |
(1,831 |
) |
|
- |
|
|
1 |
|
|
3 |
|
- |
|
|
(1,827 |
) |
Net
income/(loss) |
510 |
|
|
(1,074 |
) |
|
(2,100 |
) |
|
3 |
|
119 |
|
|
(2,542 |
) |
Net loss attributable to non-controlling interests
shareholders |
(883 |
) |
|
(185 |
) |
|
45 |
|
|
- |
|
(29 |
) |
|
(1,052 |
) |
Net income attributable to mezzanine equityclassified as
non-controlling interests shareholders |
8 |
|
|
(8 |
) |
|
- |
|
|
- |
|
- |
|
|
- |
|
Net income/(loss)
attributable to the company’s ordinary shareholders |
1,385 |
|
|
(881 |
) |
|
(2,145 |
) |
|
3 |
|
148 |
|
|
(1,490 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The condensed consolidated financial statements are prepared in
accordance with U.S. GAAP, which differ in certain respects from
IFRSs. The effects of material differences between the condensed
consolidated financial statements of the Group prepared under U.S.
GAAP and IFRSs are as follows:
|
For six months ended June 30, 2023 |
|
IFRSs adjustments |
|
|
|
Amounts as recorded under U.S. GAAP |
Preferred shares |
|
|
Investmentsmeasured at fairvalue |
|
|
Share-based compensation |
|
|
Lease |
|
|
Redeemable equity securities |
|
|
Amounts as recorded under IFRSs |
|
|
(RMB in millions) |
|
|
Note i |
Note ii |
Note iii |
Note iv |
Note v |
|
Fulfillment |
(32,050 |
) |
|
- |
|
|
- |
|
|
- |
|
|
845 |
|
|
- |
|
|
(31,205 |
) |
Marketing |
(19,068 |
) |
|
- |
|
|
- |
|
|
- |
|
|
2 |
|
|
- |
|
|
(19,066 |
) |
Research and development |
(8,258 |
) |
|
- |
|
|
- |
|
|
- |
|
|
3 |
|
|
- |
|
|
(8,255 |
) |
General and administrative |
(4,859 |
) |
|
- |
|
|
- |
|
|
- |
|
|
4 |
|
|
- |
|
|
(4,855 |
) |
Gain on sale of development properties |
1,481 |
|
|
- |
|
|
- |
|
|
- |
|
|
(250 |
) |
|
- |
|
|
1,231 |
|
Income from
operations |
14,697 |
|
|
- |
|
|
- |
|
|
- |
|
|
604 |
|
|
- |
|
|
15,301 |
|
Share of results of equity investees |
86 |
|
|
- |
|
|
(391 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
Interest expense |
(1,244 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(517 |
) |
|
(7 |
) |
|
(1,768 |
) |
Others, net |
4,003 |
|
|
- |
|
|
374 |
|
|
- |
|
|
- |
|
|
- |
|
|
4,377 |
|
Fair value changes of preferred shares |
- |
|
|
(818 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(818 |
) |
Income before
tax |
17,542 |
|
|
(818 |
) |
|
(17 |
) |
|
- |
|
|
87 |
|
|
(7 |
) |
|
16,787 |
|
Income tax expenses |
(4,420 |
) |
|
- |
|
|
(30 |
) |
|
(265 |
) |
|
- |
|
|
- |
|
|
(4,715 |
) |
Net
income |
13,122 |
|
|
(818 |
) |
|
(47 |
) |
|
(265 |
) |
|
87 |
|
|
(7 |
) |
|
12,072 |
|
Net income attributable to non-controlling interests
shareholders |
280 |
|
|
(207 |
) |
|
(2 |
) |
|
- |
|
|
(28 |
) |
|
- |
|
|
43 |
|
Net income
attributable to the company’s ordinary shareholders |
12,842 |
|
|
(611 |
) |
|
(45 |
) |
|
(265 |
) |
|
115 |
|
|
(7 |
) |
|
12,029 |
|
|
As of December 31, 2022 |
|
|
IFRSs adjustments |
|
|
|
Amounts as recorded under U.S. GAAP |
|
Preferred shares |
|
Investments measured at fair value |
|
Share-based compensation |
|
Lease |
|
|
Redeemable equity securities |
|
|
Amounts as recorded under IFRSs |
|
(RMB in millions) |
|
|
|
Note i |
Note ii |
Note iii |
|
Note iv |
Note v |
|
Operating lease right-of-use assets |
22,267 |
|
- |
|
|
- |
|
|
- |
|
(1,883 |
) |
|
- |
|
|
20,384 |
Investment in equity investees |
57,641 |
|
- |
|
|
(35,851 |
) |
|
- |
|
- |
|
|
- |
|
|
21,790 |
Investment securities |
11,611 |
|
- |
|
|
(11,611 |
) |
|
- |
|
- |
|
|
- |
|
|
- |
Financial assets at fair value through profit or loss |
- |
|
- |
|
|
48,893 |
|
|
- |
|
- |
|
|
- |
|
|
48,893 |
Financial assets at fair value through other comprehensive
income |
- |
|
- |
|
|
834 |
|
|
- |
|
- |
|
|
- |
|
|
834 |
Deferred tax assets |
1,536 |
|
- |
|
|
38 |
|
|
50 |
|
- |
|
|
- |
|
|
1,624 |
Total assets |
595,250 |
|
- |
|
|
2,303 |
|
|
50 |
|
(1,883 |
) |
|
- |
|
|
595,720 |
Deferred tax liabilities |
6,511 |
|
- |
|
|
487 |
|
|
- |
|
- |
|
|
- |
|
|
6,998 |
Other non-current liabilities |
1,737 |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
547 |
|
|
2,284 |
Preferred shares |
|
|
16,084 |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
16,084 |
Total
liabilities |
321,127 |
|
16,084 |
|
|
487 |
|
|
- |
|
- |
|
|
547 |
|
|
338,245 |
Mezzanine
Equity |
590 |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
(590 |
) |
|
- |
Total JD.com, Inc. shareholders’ equity |
213,366 |
|
(6,408 |
) |
|
1,751 |
|
|
46 |
|
(1,794 |
) |
|
(440 |
) |
|
206,521 |
Non-controlling interests |
60,167 |
|
(9,676 |
) |
|
65 |
|
|
4 |
|
(89 |
) |
|
483 |
|
|
50,954 |
Total shareholders’
equity |
273,533 |
|
(16,084 |
) |
|
1,816 |
|
|
50 |
|
(1,883 |
) |
|
43 |
|
|
257,475 |
|
As of June 30, 2023 |
|
|
IFRSs adjustments |
|
|
|
Amounts as recorded under U.S. GAAP |
|
Preferred shares |
|
Investments measured at fair value |
|
Share-based compensation |
|
Lease |
|
Redeemable equity securities |
|
Amounts as recorded under IFRSs |
|
(RMB in millions) |
|
|
|
Note i |
Note ii |
Note iii |
Note iv |
Note v |
|
Operating lease right-of-use assets |
22,396 |
|
- |
|
|
- |
|
|
- |
|
|
(1,796 |
) |
|
- |
|
|
20,600 |
Investment in equity investees |
58,387 |
|
- |
|
|
(36,441 |
) |
|
- |
|
|
- |
|
|
- |
|
|
21,946 |
Investment securities |
6,260 |
|
- |
|
|
(6,260 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
Financial assets at fair value through profit or loss |
- |
|
- |
|
|
44,497 |
|
|
- |
|
|
- |
|
|
- |
|
|
44,497 |
Financial assets at fair value through other comprehensive
income |
- |
|
- |
|
|
448 |
|
|
- |
|
|
- |
|
|
- |
|
|
448 |
Deferred tax assets |
1,506 |
|
- |
|
|
49 |
|
|
(438 |
) |
|
- |
|
|
- |
|
|
1,117 |
Total assets |
603,924 |
|
- |
|
|
2,293 |
|
|
(438 |
) |
|
(1,796 |
) |
|
- |
|
|
603,983 |
Deferred tax liabilities |
7,213 |
|
- |
|
|
519 |
|
|
- |
|
|
- |
|
|
- |
|
|
7,732 |
Other non-current liabilities |
1,597 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
554 |
|
|
2,151 |
Preferred shares |
- |
|
18,484 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
18,484 |
Total liabilities |
316,634 |
|
18,484 |
|
|
519 |
|
|
- |
|
|
- |
|
|
554 |
|
|
336,191 |
Mezzanine Equity |
595 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(595 |
) |
|
- |
Total JD.com, Inc. shareholders’ equity |
221,786 |
|
(6,576 |
) |
|
1,674 |
|
|
(442 |
) |
|
(1,679 |
) |
|
(447 |
) |
|
214,316 |
Non-controlling interests |
64,909 |
|
(11,908 |
) |
|
100 |
|
|
4 |
|
|
(117 |
) |
|
488 |
|
|
53,476 |
Total shareholders’ equity |
286,695 |
|
(18,484 |
) |
|
1,774 |
|
|
(438 |
) |
|
(1,796 |
) |
|
41 |
|
|
267,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
(i) Preferred shares
Under U.S. GAAP, preferred shares of the Group
are accounted for as mezzanine equity or non-controlling interests,
depending on the redeemable features exist or not. The preferred
shares with redeemable features are classified as mezzanine equity
because they are redeemable contingently upon the occurrence of
certain events outside of the Group’s control. This kind of
preferred shares are recorded initially at fair value, net of
issuance costs at the date of issuance. Accretion to the respective
redemption value of the preferred shares over the period is
recognized starting from issuance date to the earliest redemption
date.
Under IFRS, since the Group does not have an
unconditional right to avoid delivering cash, the preferred shares
represent liability. With certain embedded features, the Group
designates the entire preferred shares as financial liabilities at
fair value through profit or loss and are initially recognized at
fair value, while the changes in the fair value are recognized in
profit or loss. The issuance costs are recorded in profit or
loss.
(ii) Investments measured at fair
value
Under U.S. GAAP, the Group uses measurement
alternative to record the investments without readily determinable
fair values at cost, less impairment, adjusted for subsequent
observable price changes on a nonrecurring basis, and reports
changes in the carrying value of the equity investments in profit
or loss. Changes in the carrying value of the equity investments
are required to be made whenever there are observable price changes
in orderly transactions for the identical or similar investment of
the same issuer. Those investments include convertible redeemable
preferred shares, ordinary shares with preferential rights issued
by privately held companies and equity investments in unlisted
entities, in the form of ordinary shares without significant
influence. In addition, the Group accounts for certain investments
in private equity funds over which the Group does not have the
ability to exercise significant influence under the existing
practical expedient, and estimates fair value using net asset value
per share (or its equivalent) of the investment. The Group also
applies the equity method of accounting to account for certain
equity investments in private equity funds.
Under IFRS, the aforementioned investments are
classified as financial assets at fair value through profit or loss
and measured at fair value, except for certain equity investments
not held for trading but held for long-term strategic purposes,
which are designated as financial assets at fair value through
other comprehensive income. Fair value changes of these long-term
investments are recognized in profit or loss or other comprehensive
income, respectively.
(iii) Share-based
compensation
Under U.S. GAAP, for awards that ordinarily give
rise to a tax deduction under existing tax law, deferred taxes are
computed on the basis of the compensation expense that is
recognized for financial reporting purposes. In addition, tax
benefits in excess of or less than the related deferred tax assets
are recognized in profit or loss in the period in which the amount
of the deduction is determined (typically when an award vests or,
in the case of options, is exercised or expires).
Under IFRS, for awards that will give rise to a
tax deduction under the applicable tax law, deferred taxes are
computed on the basis of the hypothetical tax deduction for the
share-based payment that corresponds to the percentage earned to
date (i.e., the intrinsic value of the award on the reporting date
multiplied by the percentage vested). In addition, tax benefits
less than or equal to the related deferred tax assets are
recognized in profit or loss, otherwise are recognized in
equity.
(iv) Lease
Lease classification and
measurement
Under U.S. GAAP, the amortization of the
right-of-use assets and interest expense related to the lease
liabilities are recorded together as lease expense to produce a
straight-line recognition effect in profit or loss.
Under IFRS, the amortization of the right-of-use
assets is on a straight-line basis while the interest expense
related to the lease liabilities are measured at amortized
cost.
Sale-and-leaseback
arrangements
Under U.S. GAAP, if the sale-and-leaseback
transaction qualifies as a sale, the entire gain on the transaction
would be recognized.
Under IFRS, for sale-and-leaseback transactions
that qualify as a sale, the gain would be limited to the amount
related to the residual portion of the asset sold. The amount of
the gain related to the underlying asset leased back to the lessee
would be offset against the lessee’s right-of-use assets.
(v) Redeemable equity
securities
Under U.S. GAAP, certain financial instruments
of the Group in the form of shares with redemption features
embedded are classified as redeemable non-controlling interests,
when the realization of the redemption feature is subject to
certain conditions that are not solely within the Group’s
control.
Under IFRS, these financial instruments are
classified as liabilities irrespective of whether the obligation is
unconditional or conditional.
______________
1 The U.S. dollar (US$) amounts disclosed in
this announcement, except for those transaction amounts that were
actually settled in U.S. dollars, are presented solely for the
convenience of the readers. The conversion of Renminbi (RMB) into
US$ in this announcement is based on the exchange rate set forth in
the H.10 statistical release of the Board of Governors of the
Federal Reserve System as of June 30, 2023, which was RMB7.2513 to
US$1.00. The percentages stated in this announcement are calculated
based on the RMB amounts.2 See the sections entitled “Non-GAAP
Measures” and “Unaudited Reconciliation of GAAP and Non-GAAP
Results” for more information about the non-GAAP measures referred
to in this announcement.3 The numbers also include warehouses
managed by Deppon Logistics Co., Ltd. (“Deppon”, Shanghai Stock
Exchange code: 603056) and its subsidiaries (collectively, “Deppon
Group”). In the third quarter of 2022, JD Logistics completed the
acquisition of the controlling interest in Deppon and began to
consolidate its financial results.
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