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3Q22 revenue growth sequentially improved to +11% yoy, inline; NG NP surpassed RMB10.0bn, +99% yoy, 41% above, strong beat Conservative on 4Q22 top line growth amid macro headwinds, but margin improvement to continue driven by effective cost control Upbeat on JD’s well positioned logistics strengths, market share gain, and profitability potential; BUY, TP slightly up to USD73　　3Q22 bottom line solid beat on effective cost control　　JD 3Q22 revenue +11% yoy (vs +5% yoy in 2Q22) to RMB243.5bn, inline, a sequential improvement driven by 3P and logistics segments’ substantial recovery from +22% yoy in 2Q22 to +42% yoy in 3Q22, with mitigation of logistics issues. 1P business revenue +6% yoy (vs +3% yoy in 2Q22), driven by robust growth recovery from electronic and home appliance category, but partly offset by slower growth in general merchandise due to: 1) Structural change with some categories’ business model adjustment from 1P to 3P to improve profitability, and 2) Softer growth of discretionary products during lockdown. JD’s bottom line recorded an historical quarterly high and surpassed RMB10.0bn, +99%/+55% yoy/qoq, 41% above consensus, mainly driven by cost control in fulfillment and marketing expenses, and loss reduction on new business. JD’s financials are solid with net cash of RMB171.6n (net cash/equity of 63%), and generated RMB9.2bn of OCF and RMB2.3bn of FCF in 2Q22.　　Conservative on 4Q22, while looking forward to 2023 recovery　　Mgmt. remains conservative on 4Q22 top line growth in consideration of: 1) Macro uncertainties and consumption sentiment weakness; 2) COVID resurgence led logistics issue recurrence, for example, JD noticed that c.17% of last mile locations were impacted by lockdown from Sept to date.　　We forecast JD 4Q22 revenue to grow 10% yoy, slightly slower than 3Q22’s 11% yoy, but still resilient and faster than peers, inline with its Double 11 GMV performance. Mgmt. also highlighted smartphones’ sales recovery in 4Q22 thanks to release of new models. On margin side, we expect JD’s bottom line to maintain improving trend, and estimate 4Q22 NG NPM +0.7ppt yoy to 2.0%, driven by 1) Efficiency push; 2) Mix change (3P growth outpacing 1P); 3) Bargaining power increase; 4) Loss- narrowing from new businesses; 5) JD logistics breakeven trend for FY22E.　　BUY: TP slightly revised up to USD73　　We fine-tuned our forecast from the results, revised revenue -1%/-2%/-2% in FY22/23/24E, and revised NG NPM +0.4ppt/ +0.1ppt/+0.1ppt, driving NG NP revision of +17%/+3%/+2%. We are upbeat on JD’s well positioned logistics strengths, ability to gain market share, and profitability potential.We nudged DCF-TP to USD73 from USD72 from better margins and FX changes. Our TP implies 24x/17x FY23/24E P/E. Key Risks: 1) Macro/ Consumption; 2) Logistic issues; 3) Regulation; 4) Competition.【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。

关键词： improvement