Q2 2024 JD.com Inc Earnings Call
Speaker Change: Hello and thank you for standing by for JD.com second quarter and interim 2024 earnings conference call.
Speaker Change: At this time all participants are in listen-only mode.
Speaker Change: After management's prepared remarks, there will be a question and answer session.
Speaker Change: Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Shan Zhang, Director of Investor Relations. Please go ahead.
Shan Zhang: Thank you. Good day, everyone. Welcome to JD.com second quarter and interim 2024 earnings conference call.
Speaker Change: For today's call, CEO of JD.com, Ms. Sandy Xu will kick off with her opening remarks and our CFO, Mr. Ian Shan, will discuss the financial results, then we'll open the call to questions from analysts.
Speaker Change: Before turning the call over to Sandy, let me quickly cover the safe harbor. Please be reminded that during the call, our comments and responses to your questions reflect management's view as of today's only and will include forelooking statements.
Speaker Change: Please refer to our latest Harvard statement in the early press release on our website, which applies to this call.
Speaker Change: We will discuss certain non-GAAP financial measures. Please also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in earnings price release.
Speaker Change: Also please note, all figures mentioned in this call are in R&D, unless otherwise stated. Now let me turn the call over to our CEO, Sandy.
Sandy: Thank you, Sean. Hello, everyone. Thanks for joining us today to discuss our Q2 2024 results.
Speaker Change: Facing a very dynamic and competitive market, we delivered a solid set of results, notably achieving the highest single-quarter non-GAAP net profit in our history.
Speaker Change: Our team did a great job executing our long-term strategy of relentlessly pursuing lower cost, higher efficiency, and best-in-class user experience.
Speaker Change: And we saw a set of key drivers of our business.
Speaker Change: including user growth, user experience, and engagement.
Speaker Change: price competitiveness and platform ecosystem continue to move in the right direction in the quarter.
Speaker Change: Our results speak strongly about the quality of our business.
Speaker Change: and our commitment to the healthy long-term growth with financial discipline.
Speaker Change: instead of addressing the shifting market environment with hefty subsidies for short-term top-line performance
Speaker Change: We continue to focus on leveraging our core strengths in supply chain capabilities.
Speaker Change: to offer competitive prices and better user experience.
Speaker Change: and at the same time to grow our business and profit sustainably.
Speaker Change: This is a proven path to drive sustainable growth and has led us through many market shifts over the past two decades.
Speaker Change: despite the seasonal fluctuation of rheumatoid growth in Q2.
Speaker Change: We are confident that our long-term market position will continue to improve.
Speaker Change: Now, let's discuss our category performance.
Speaker Change: Revenues of electronics and home appliances were down 4.6% year-on-year in the quarter.
Speaker Change: This is primarily due to last year's high base, as well as our disciplined strategy during the June 18th promotion, as we prioritized the sustainable growth of our business.
Speaker Change: rather than short-term growth fueled by excessive subsidies.
Speaker Change: We believe with decades of operating experience in this category and a parallel supply chain capabilities
Speaker Change: We will continue to offer the best-in-class user experience and enhance JD's market position and win over market share in a sustainable way.
Speaker Change: We see continued strong momentum in our general merchandise category with the revenues up 8.7% year-on-year, further accelerating from the previous quarters.
Speaker Change: to highlight.
Speaker Change: Supermarket revenue saw double-digit year-on-year growth in the quarter, led by strong order volume growth and improving user man-share.
Speaker Change: This momentum has persisted for two consecutive quarters now.
Speaker Change: and is mainly attributable to our stepped-up efforts to improve user experience across all aspects of product quality and selection.
Speaker Change: price competitiveness and service quality.
Speaker Change: With this massive time, we expect supermarkets to continue to be an important growth driver for us.
Speaker Change: despite mixed top-line performance.
Speaker Change: We saw broad-based profitability improvement.
Speaker Change: across many categories and segments.
Speaker Change: which collectively contributed to record highs in both non-GAAP operating profit of 11.6 billion RMB and non-GAAP net profit attributable to ordinary shareholders of 14.5 billion RMB.
Speaker Change: Now Gap Line Margin in Q2 climbed to 5% for the first time.
Speaker Change: This was primarily driven by gross margin expansion to a historical level of 15.8% in the quarter.
Speaker Change: with improvement in almost every category.
Speaker Change: as we focus on price competitiveness.
Speaker Change: Our growth margin has been on an upward trend year-on-year for each and every quarter over the last two years.
Speaker Change: This underscores our improving supply chain capabilities.
Speaker Change: that enable us to continually benefit from scale and efficiency.
Speaker Change: Now let me walk you through the progress we made on the key drivers of our business.
Speaker Change: Namely, youth of growth and youth of engagement.
Speaker Change: Price Competitiveness and Platform Ecosystem
Speaker Change: First, on user growth and user engagement.
Speaker Change: In Q2, we saw robust user momentum in both the higher-tier and lower-tier markets.
Speaker Change: Collectively, the number of our total quarterly active customers continued to grow at double-digit pace year-on-year in Q2 for the third consecutive quarter.
Speaker Change: I want to reiterate that our goal is to serve users across different income spectrums and demands.
Speaker Change: with the right product, right price, and service offerings.
Speaker Change: Our user growth in the quarter was broad-based across user cohorts of both new users and existing users.
Speaker Change: particularly those who have stayed with us for over two years.
Speaker Change: as well as class members.
Speaker Change: It clearly demonstrates JD's value proposition not only resonates with new users, but continues to gain mindshare and value share from the loyal users.
Speaker Change: In addition, overall shipping frequency and order volume on our platform both grew by double digits year-on-year in Q2.
Speaker Change: We also saw average order value declined year-on-year as a result of soft consumer spending, as well as our low price strategy, category makeshift, and wide range of free shipping service.
Speaker Change: Such user momentum is a strong proof of our effective user experience programs.
Speaker Change: In Q2, we further enhanced our industry-leading trading program to provide users with better coordinated services.
Speaker Change: including delivery and installation of new devices and disassembly of used devices.
Speaker Change: We also extended our Best Price Guaranteed period to up to 365 days for certain categories.
Speaker Change: starting with 1p
Speaker Change: In addition, we made solid progress on programs including free shipping, free doorstep pickup for return, cashback for delayed shipping, and expanded their coverage from 1P to more and more 3P offerings.
Amy Shady: Other initiatives
Amy Shady: such as our supermarket categories, direct shipment from suppliers to customers.
Amy Shady: and 24-hour fresh milk delivery, so increasing user appreciation.
Amy Shady: As a result, our 3PMAG promoter score has improved sequentially for the past two quarters.
Speaker Change: Well, our 1 PMPS remains at a very high level.
Speaker Change: Going forward, we will continue to invest in user experience as we believe it will translate to stronger user mindshare and user engagement.
Speaker Change: Which are the fundamentals to drive sustainable growth for JD?
Speaker Change: Second, moving on to the price competitiveness.
Speaker Change: which we continue to reinforce firmly. On the 1P side, we further built up
Speaker Change: built upon our strong supply chain capabilities.
Speaker Change: to provide our users everyday low price in a sustainable way.
Speaker Change: This is the barrack of our low-priced charity.
Speaker Change: Well, on the 3P side, we stepped up effort to supplement the products on our platform with more value for many offerings.
Speaker Change: to address a wider spectrum of user demands.
Speaker Change: In Q2, our NPS for price competitiveness continued to grow year-on-year on both the 1P and 3P sides.
Speaker Change: We also saw stronger momentum for lower-tier markets on our platform.
Speaker Change: in terms of user base expansion, order volume growth, and shipping frequency among others.
Speaker Change: Again, JD's price competitiveness is built on our strengths in lower cost, higher efficiency and best-in-class user experience.
Speaker Change: Low price is a result of our core capabilities.
Speaker Change: instead of driven by subsidies.
Speaker Change: This will continue to distinguish us in the e-commerce industry.
Speaker Change: Thirdly, we have also made encouraging progress on our platform ecosystem.
Speaker Change: On the 3P side, during the quarter, we continue to provide healthy user traffic and effective supporting measures to help 3P merchants grow their businesses.
Speaker Change: Groupie merchants responded well to our efforts.
Speaker Change: and our active merchant base continue to expand quickly both year-on-year and sequentially in Q2.
Speaker Change: In addition, we also saw an accelerated year-on-year growth of active buyers who purchased from 3P merchants on our platform.
Speaker Change: At the same time, such users recorded higher shopping frequency in this quarter.
Speaker Change: This led to an over 20% year-on-year increase in our 3P order volume in Q2, its fastest pace in the last two years.
Speaker Change: In terms of monetization, the decline in commission revenues narrowed in the quarter as the impact of our reduced commission fees gradually lapsed.
Speaker Change: Meanwhile, JD retails advertising revenues generated from 3P merchants.
Speaker Change: recorded a double-digit growth.
Speaker Change: We still have a lot to do, especially to drive better ROI for our merchants.
Speaker Change: To reiterate, our goal is to build up a thriving platform ecosystem that propels the development of our 1P business.
Speaker Change: and incentivizes 3P merchants.
Speaker Change: to provide diverse product and service offerings as we aim to address a wider array of user demands.
Speaker Change: In closing, our Q2 results demonstrate our firm's commitment to high-quality long-term business growth. We believe this is the best approach to navigate the current market conditions.
Speaker Change: Our profitability improvement is sustainable as it is driven by our expanding scale efficiency arising from our supply chain advantages and our focus on creating value for our end users.
Speaker Change: At the same time, our key business drivers, including user base and engagement.
Speaker Change: price competitiveness and platform ecosystem are all trending in the right direction.
Speaker Change: We are confident that as we stay focused on executing our long-term strategies to offer lower cost, higher efficiency and best user experience, we will maintain a healthy growth of our business scale.
Speaker Change: profit and cash flow and solidify our market position in the long term.
Speaker Change: With that, I will turn it over to Ian for our financial highlights. Thank you.
Ian: Thank you Sandy and hello everyone. In Q2, we stayed committed to our strategy of building cloud capabilities for sustainable growth.
Speaker Change: despite the short-term headwinds impacting our top-line growth.
Ian: Our non-GAAP net profit margin hit an all-time high of 5%.
Ian: with improvements across many of our categories and segments.
Ian: This was driven by our expanding scale efficiency arising from our supply chain advantages and our focus on creating value for users.
Ian: on the back of these high-quality results.
Ian: We continue to step up efforts to return value to shareholders.
Ian: In Q2, we repurchased a total of 137 million Class A ordinary shares, equivalent of 68 million ADS.
Ian: which accounted for 4.5% of our ordinary shares outstanding as of March 31st, 2024.
Ian: The total value of the shares repurchased in Q2 was $2.1 billion.
Ian: in the first half of this year.
Ian: We have bought back a total of 7.1% of our ordinary shares, outstanding as of the end of 2023.
Ian: The progress reflects our commitment to creating value for shareholders. With that, let me turn to our Q2 financial performance.
Ian: Our net revenue grew by 1% year-on-year to RMB 291 billion in Q2.
Ian: Breaking down the mix, product revenues were flat in the quarter, primarily due to a 5% year-on-year revenue decline in our Electronics and Home Appliances category for the quarter.
Ian: This is in line with our expectations, as we had a high base for the sales of summer appliances last year due to seasonal factors, as well as our disciplined promotions in the quarter.
Ian: Our general merchandise category delivered another robust revenue growth of 9% year-on-year in Q2, its highest growth rate for the past two years.
Ian: In particular, our supermarket category has hit double-digit year-on-year revenue growth for two consecutive quarters.
Ian: And we believe this momentum will continue for the rest of the year.
Ian: Service revenues grew by 6% year-on-year in Q2, of which marketplace and marketing revenues were up 4%, and logistics and other service revenues increased by 8%.
Ian: On the marketplace and marketing, commission revenues recorded a narrow decline in a quarter as the impact of our supporting measures to merchants, including commission cuts, gradually lapsed.
Ian: Advertising revenues delivered a healthy growth rate year-on-year in the quarter with a faster pace than GMV as we further optimize the traffic allocation efficiency.
Speaker Change: It's worth noticing that JD Retail's advertising revenues bounce back to a double-digit year-on-year growth in Q2. We see plenty of room to further grow advertising revenue as we continue to boost user growth and improve user efficiency.
Speaker Change: Now, let's turn to our segment performance.
Speaker Change: JD Retail revenues were up 1.5% year-on-year in Q2.
Speaker Change: reflecting the mixed category performance as previously mentioned.
Speaker Change: In terms of profit, JD Retail achieves a broad-based increase in profitability for the quarter thanks to its gross margin expansion across many categories and disciplined promotions.
Speaker Change: as our supply chain advantages continue to drive up scale benefit.
Speaker Change: were able to get competitive procurement benefits.
Speaker Change: and then pass it on to our users, while at the same time supporting our growth margin.
Speaker Change: JD Retail's operating profit increased by 24% year-on-year to RMB10 billion, with operating margin recording a 7.2 bps expansion to 3.9%.
Speaker Change: Looking now to JD Logistics, JD Logistics revenues increased by 7.7% year-on-year in Q2, with healthy momentum for both internal and external revenue streams.
Speaker Change: Internal and external revenues increased by 7% and 8% respectively.
Speaker Change: As JD Logistics continues to benefit from its increased scale and improved operating efficiency, its non-gap operating margin also increased by 370 bps year-on-year in the quarter, hitting a new record of 4.9% since its listing.
Speaker Change: Turning to new business.
Speaker Change: In the quarter, revenue of new business was down 35% year-on-year, primarily due to the adjustments of the Jinxi Business and others.
Speaker Change: Non-Gap Operating Loss of New Business was RMB 695 million in the quarter, compared to a gain of RMB 23 million a year ago, excluding the impact of the disposal gain of JD Properties' long-lived assets.
Speaker Change: The result was largely due to the increased loss in the Jing Xi business and others.
Speaker Change: Moving on to our consolidated profit performance in Q2 at the group level. Our gross profit grew by 11% year-on-year, and the gross margin increased substantially year-on-year to an all-time high of 15.8% in Q2.
Speaker Change: It's worth pointing out that this is the ninth quarter in a row that our gross margin improved on a year-on-year basis.
Speaker Change: both at the group level and at the JD retail level, which clearly highlights the quality of our business group.
Speaker Change: Our non-gap operating profit increased by 34% year-on-year to a new record of RMB 11.6 billion.
Speaker Change: with a strong non-gap operating margin of 4%.
Speaker Change: primarily driven by the improved profitability of JD retail and JD logistics.
Speaker Change: as our supply chain continues to build up scale benefits.
Speaker Change: Non-gap net income attributable to ordinary shareholders came in as a new record of RMB 14.5 billion in Q2.
Speaker Change: representing a 69% year-on-year increase.
Speaker Change: Non-Gap Net Margin reached 5%, up nearly 2 percentage points from a year ago.
Speaker Change: In addition, non-gap diluted net income per ADS grew by 74% year-on-year in Q2 to RMB 9.36 or USD 1.29 in the quarter.
Speaker Change: Our last 12-month free cash flow as of the end of Q2 was RMB56 billion.
Speaker Change: Compared to RMB$33 billion in the same period last year, the year-on-year increase in free cash flow was primarily driven by seasonality factors.
Speaker Change: our robust profit, as well as moderated capex.
Speaker Change: By the end of Q2, our cash and cash equivalents.
Speaker Change: Restricted Cash
Speaker Change: and short-term investments.
Speaker Change: added up to a total of RMB 209 billion.
Speaker Change: As we head into the second half of the year, we will dedicate ourselves to accelerate top line, to outpace the growth of the total retail sales of China for the full year.
Speaker Change: It takes a lot of effort under the current environment.
Speaker Change: We will also continue to invest with financial discipline, focusing on areas that contribute to our long-term competitiveness.
Speaker Change: particularly in user experience and user growth.
Speaker Change: low-price strategy and platform ecosystem. Thus, we are confident to achieve a healthy growth of our full-year profit.
Speaker Change: We believe this is the right approach for the current environment and to ensure sustainable growth for the long run.
Speaker Change: With that, I will turn it back to Sean. Thank you.
Sean: Thank you, Sandy and Ian. For the Q&A session, you're welcome to ask questions in English or Chinese, and our management will answer your questions in the language you ask.
Speaker Change: We'll provide English translation when necessary for convenient purpose only. In the case of any discrepancy, please refer to our management statement in the original language.
Speaker Change: Okay, operator, we can open the call for a Q&A session.
Speaker Change: The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the question queue again after your first question has been addressed.
Speaker Change: Your first question comes from Kenneth Fong with UBS.
Kenneth Fong: Hi, Sandy, Ian, Sean, hello to you all and congratulations to the management team on achieving a healthy and growing profit. I have two questions. The first one is about our land price strategy and the changes in this industry.
Speaker Change: We at JD are launching this promotion for the 18th month. In the context of gradually shifting towards a GNV-oriented background on effective platforms, will the company's primary strategy change?
Speaker Change: The second question is about the platform's ecosystem and monetization. Over the past year, JD.com has been accelerating the onboarding of VP merchants, establishing user awareness, and building a healthy platform ecosystem gradually.
Speaker Change: Seeing marketing and some effective platforms accelerating monetization, how should we think about the path and timing for our company to accelerate monetization?
Speaker Change: and I'll be back with you next time.
Speaker Change: Congress management on a strong quarter to deliver a robust, profitable earning growth.
Speaker Change: I have two questions. First is on our low price strategy. Recently we start to see some news that our competitor are fine tuning their strategy from low price to more GMB focus. JD recently also announced our Super 18 discount date recurring at each month.
Speaker Change: Can you share with us a strategy on price competitiveness and whether we have any changes to our strategy in response to the market change?
Speaker Change: And second is a platform ecosystem.
Speaker Change: Over the past year, we have been onboarding more new merchants, expanding SKU, cultivating consumer mindset, and built a very vibrant 3P ecosystem. And we have seen encouraging results.
Speaker Change: with competitor also speeding up platform monetization, full virus service fee and advertising product. Can management share with us how we think about the path and timeline for speeding up our 3P monetization? Thank you.
Speaker Change: Thank you for your question, Connie.
Speaker Change: Then let me first answer the first question about the low-price strategy. First of all, our low-price strategy has not changed.
Speaker Change: In the past 20 years, we have been insisting on cost-efficiency experience. In terms of user experience, as we have mentioned many times, the three key elements are product price and service. So price is a very important part of user experience.
Speaker Change: So our main goal is to keep the user experience number one and to constantly improve our user experience which is the starting point of all our business and the key decision-making element.
Speaker Change: Thank you, Kenny, for your question. Let me address your first question about JD's low-price strategy.
Speaker Change: So, for us, our commitment to low-price strategy remains steadfast.
Speaker Change: As you know, for our 20 years of growth, we have always put our focus on
Speaker Change: on our lower cost, higher efficiency, and user experience. And the price competitiveness is a very core aspect for user experience. This is also why we always focus on our product, price, and user experience.
Speaker Change: So, user experience has always been at the core of JD's mission and enhancing it remains our top priority and the most crucial aspect for JD's business growth.
Speaker Change: First of all, Jingdong is a retail store with a supply chain as its foundation. Low price means low cost. This is also the essence of our retail business and the most basic operating ability. We have always been ensuring the quality of our products and improving our price competitiveness on the basis of our services. And behind this low price is the low cost and technology that we bring through the scale effect.
Speaker Change: consecutive projects which enable higher operations efficiency, so it doesn't require the shareholders to increase the price continuously.
Speaker Change: And for JD.com as a supply chain-based retailer, behind our low price, it's always our ability to control the economies of scale and the tech-driven innovations.
Speaker Change: So, we continuously enhance our price competitiveness without compromising the quality of our products and services, and we'd rather achieve it through our strengths rather than relying on short-term subsidies.
Speaker Change: that lead to unsustainable price reduction.
Speaker Change: 除了我们的自营业务之外呢,我们也通过吸引更多的3P的商家,更多的产业带和白牌的商家来帮助我们丰富产业带的商品,丰富低价商品的供给。
Speaker Change: to meet the diverse needs of different consumer groups. For example, our surprise business is to acquire low-priced products through direct purchase and direct distribution with manufacturers.
Speaker Change: So our low price is not based on the quality of the product and the user experience and the benefits of suppressing the partners. It is based on the scale effect and the continuous innovation of the technology-driven supply chain to squeeze out the price water in the middle and improve efficiency to achieve a low price.
Speaker Change: So besides our 1P business
Speaker Change: We have been working hard to attract increasing numbers of 3P merchants.
Speaker Change: and working with industrial belts and white label manufacturers to our platform. By partnering with these partners can help us to diversify our low-priced product offerings catered to the various needs of our users.
Speaker Change: For example, by sourcing and shipping directly from manufacturers, our Junxi business is able to offer a wide range of lower-priced products to our customers.
Speaker Change: So we want to emphasize here that our pursuit for low prices never come at expense of user experience or product quality or the interests of our business partners.
Speaker Change: In fact, we achieved cost reduction through JD's scale effects and tech-driven supply chain innovations, which will effectively eliminate unnecessary costs and genuinely reduce prices.
Speaker Change: Over the past period of time, we have also promoted a series of projects and optimizations at a low price, including the reduction of the cost of our own purchase.
Speaker Change: and others. This year, we have also strongly recommended low-price strategies and strengthened the development of these capabilities. We also saw users' positive feedback on JD's low-price strategy.
Speaker Change: 通过超级18活动和我们进一步强化京东618以及天天低价的用户心智 我们希望进一步提升用户在低价方面的体验
Speaker Change: So we stepped up our efforts on enhancing our price competitiveness, including reducing our procurement costs on the 1P site and expanding selection of low-priced products on our marketplace.
Speaker Change: and launching programs like the 10 billion yuan discount initiatives and the 9.9 yuan items with free shipping. This year we'll continue to execute our low-price strategy and further build up our capabilities.
Speaker Change: and the positive feedback from our users affirms the effectiveness of these efforts.
Speaker Change: And through the Super 18 initiative, we hope to further strengthen the user mindshare of our JD618 grant promotion and everyday low price to enhance their shopping experience with our low price offerings.
Speaker Change: At the end, I would like to emphasize that the core business indicators that Jingdong has been paying attention to have not changed. We believe that healthy business development should be based on the performance of GMV, profit, and cash flow.
Speaker Change: 而且不論在什麼時候,這三個指標都需要去平衡,缺一不可。 因此我們在追求極致的用戶體驗,包括價格競爭力的同時, 也會非常重視業務的健康可持續的增長。
Speaker Change: And finally, I want to emphasize that our focus on core business metrics remain unchanged. We believe that healthy business development requires a comprehensive evaluation of the key indicators.
Speaker Change: and under all circumstances
Speaker Change: We strive to maintain a balance between GMV profits and cash flow.
Speaker Change: were committed.
Speaker Change: to ensuring the sustainable growth of our business.
Speaker Change: while creating an unparalleled user experience with price competitiveness being an important component.
Kenny: Kenny, let me answer your second question. ZYGONG's platform ecosystem is to achieve the common prosperity of ZYG and POP merchants, and provide the best user experience together.
Kenny: We strive to provide exclusive event and personal experience to the users at our largest scale.
Kenny: and Puff to meet the diversified needs of users.
Speaker Change: Therefore, the development core of Jingdong's platform ecosystem is to enhance the user experience. The power line is the result of the natural health growth of the platform ecosystem.
Speaker Change: And to answer your second question, we aim to build a thriving platform ecosystem that benefits both our 1P and 3P businesses.
Speaker Change: We believe that combining these two models create a superior shopping experience for our users.
Speaker Change: Our 1P offerings attract users, while 3P merchants help to address diversified needs of our users.
Speaker Change: So, for us, the core of our platform ecosystem is to deliver a best-in-class user experience, and monetization will be a natural result of our platform ecosystem's growth.
Jindong: Jindong's platform ecological construction is a long-term strategy.
Jindong: and there is a lot of room for improvement. I have previously explained to everyone the overall idea and rhythm of our platform construction.
Jindong: First of all, we want to promote business and expand the ecological scale, enrich the shipment chain and promote the growth and vitality of our merchants. POP merchants can help us enrich our product supply.
Jindong: and improve the user experience. This is an indispensable addition to the Jingdong platform. Q2, our active business acceleration continues to maintain a trend of increasing at the same rate.
Speaker Change: As we mentioned before that GD's platform ecosystem, it's a long-term strategic initiative and there's still great potential for us to improve. As shared before, our development progress for the platform ecosystem have a few steps.
Speaker Change: So first, we will continue to expand our merchant base, enrich product offerings, and foster merchants' growth and engagement.
Speaker Change: Our 3P merchants play a very important role in enhancing product supply and improving user experience. They are a very important and essential component supplement to our platform.
Speaker Change: And in Q2, the number of active merchants continued to see a strong momentum, growth momentum.
Speaker Change: At the same time, we are very concerned about the user's participation and user experience, including the number of users of 3P.
Speaker Change: 3P's order volume, and 3P's GNV indicators.
Speaker Change: Q2, our 3P customers and 3P orders have increased rapidly POP's GMV has also kept up with the market's growth
Speaker Change: At the same time, we closely monitor the key metrics of users, including the numbers of users who purchase from our 3P merchants.
Speaker Change: and the 3P order volume and GNV generated from 3P, etc. In Q2, both the number of 3P transaction uses and orders experienced accelerated growth, with 3P GNV growth outpacing our total GNV growth.
Speaker Change: Lastly, we will see the natural and healthy growth of the Pop Ecology.
Speaker Change: And eventually, we will see a natural and organic growth on our 3P monetization.
Speaker Change: Second, at this stage, we continue to see some positive developments in platform ecosystem development, including
Speaker Change: Q2's commission income is gradually stabilizing. Last year, our support policies for merchants, including discounting commission and cancelling platform fees, had a gradual decrease in impact on technology. In the second half of the year, we expect commission income to gradually stabilize and recover with the growth of 3P GNV.
Speaker Change: We believe that Q2's advertising revenue will continue to increase faster than GNV's.
Speaker Change: Advertising is the natural result of businesses making choices to improve their operational effectiveness.
Speaker Change: Now we'll leave that to
Speaker Change: to upgrade the advertising capabilities of our products and the model of innovative advertising to give more practical and efficient growth paths to brands, retailers, small and medium-sized retailers and promote the business growth of retailers to drive the natural growth of advertising revenue.
Speaker Change: Thank you. Thank you.
Speaker Change: At the current stage,
Speaker Change: We are observing some positive developments in our marketplace, which includes, first of all, in Q2, our commission revenue showed steady improvement recovery. The impact of our supportive measures to 3P merchants since last year, including reduced commissions and the removal of platform usage fees, is gradually diminishing.
Speaker Change: So we anticipate that commission revenue will recover and increase in the second half of the year as 3P GNV continues to grow.
Speaker Change: And for advertising revenue in Q2, it grew faster than the GNV. We believe advertising is merchants' response to the platform's performance.
Speaker Change: So we have been enhancing our advertising products and the models and to help our brands and SME merchants to grow their business on our platform. So this in turn, we believe, will drive higher advertising revenues to us.
Speaker Change: In the end, we will follow the established strategy to firmly promote platform ecological construction.
Speaker Change: 长期来看,伴随我们平台生态的逐步完善,3P的订单量和GMV占比将超过自营,然后我们的佣金和广告收入也会自然健康增长。
Speaker Change: So we remain committed to executing our strategy and plan to advance our platform ecosystem.
Speaker Change: So in the long term, our ecosystem will continue to evolve and improve.
Speaker Change: We expect the proportion of 3P orders and GNV to surpass that of our 1P business. So consequentially, revenues from commissions and advertising will grow in a healthy manner. Thank you.
Speaker Change: Your next question comes from Ronald Hsien with Goldman Sachs.
Speaker Change: Congratulations on the very strong profits this second quarter, which far exceeded expectations. As we look for this...
Speaker Change: When it comes to the best balance between growth, profit, and cash flow, I see that in the second quarter, our profit should be the most outstanding KPI. Looking at the second half of the year, how do we think we will balance these three KPIs: GMV growth rate, absolute profit, and cash flow? Will our annual targets be adjusted for the second half of the year because the profit in the first half far exceeded the target, or will we maintain the annual targets? For the second half of the year, we also see that different e-commerce companies are saying they will focus more on GMV growth. How do we judge the competitive landscape of the e-commerce industry in the second half of the year? Let me translate: Congratulations to management on the very strong second quarter profit.
Ronald Hsien: And so as we think about the optimal balance between growth and profitability, 2Q seems to be more skewed towards profitability that beat most in the three KPIs. So as we look into annual basis or into the second half, how are we balancing the optimal targets of these three KPIs for second half? And would this lead to any changes for the full year given the profit KPI has exceeded expectations for the first six months? And for the second half, we see more companies focusing or talking about GMB growth. So as we target this GMB growth, how do we see or foresee the second half e-commerce competitive landscape into the second half? Thank you.
Speaker Change: Oh, thank you. I'm here to answer the question about growth and profit, so we believe that sustainable...
Speaker Change: Sandy Su,ечом Liu,Co LE want to connect to him. Hundred years, he's a young man with the economics things.
Speaker Change: 利润则是来源于持续提升的成本优势和效率提升
Speaker Change: In the assessment, we also maintain a healthy balance of GNV, profit, and cash flow.
Speaker Change: And to answer your first question about growth and profits.
Speaker Change: At JD.com, we believe that sustainable growth is driven by delivering an exceptional user experience.
Speaker Change: And JD is committed to continuously enhancing users' satisfaction and enhancing our core capabilities in our 1P and logistic services. And our profits are the result of our ongoing optimization in cost and efficiency.
Speaker Change: So, for the evaluation of our business performance, we will always strive to strike a balance among GNV profits and cash flow to ensure healthy growth of our business.
Speaker Change: [inaudible]
K-2: From the Q2 financial report, it can be seen that JD.com achieved high-quality operating results in the past Q2.
Speaker Change: I have communicated with everyone before that the short-term factors such as air-conditioning, high-frequency, etc. are affected by summer products. Q2 income increases and slows down, but our operating quality is significantly improved.
Speaker Change: The company's net profit has reached a record high of 1.45 billion yuan and the overall net profit rate has also reached 5% for the first time.
Speaker Change: The main driving factor for the increase in profit is the increase in the efficiency of the supply chain, which has led to a significant improvement in gross profit.
Speaker Change: Q2 Maoli rate has also increased by 137 points It is worth noting that the Maoli rate has improved 9 times in a row since Q2 2022 This reflects the high quality growth of JD's business
Speaker Change: The business unit's business awareness and business ability are constantly improving. We pay more attention to building a long-term competitive edge and investing in ROI, ensuring a balance between growth and profit for JD.
Speaker Change: So our performance in Q2 demonstrates the high-quality growth we have achieved.
Speaker Change: As we previously communicated, our revenue growth in Q2 slowed due to a challenging comparison with last year, particularly in summer categories like air conditioners.
Speaker Change: However, we observed a strong operational performance with net income reaching a historic high of 14.5 billion RMB and net profit margin reaching 5% for the first time.
Speaker Change: A key driver of this margin improvement was the enhancement of supply chain efficiency leading to a significant improvement year-on-year, increase in gross profit margin, which grew by 137 basis points in Q2.
Speaker Change: And notably, our gross profit margin has improved consistently for nine consecutive quarters since Q2 2022.
Speaker Change: These results reflect JD's commitment to high-quality growth.
Speaker Change: Our business units continue to gain operating experience and are dedicated to investing in long-term, sustainable competitive advantages and ROI to balance growth and profitability.
Speaker Change: Second, in the second half of the year, JD.com will continue to balance its growth and profit.
Speaker Change: 下半年我们会继续坚定地在用户体验
Speaker Change: Xingke Coffee and market shares
Speaker Change: At the same time, the ability of the business unit is constantly improving, and the operating efficiency is also continuing to improve. This will bring continuous improvement of the entire supply chain efficiency, and at the same time bring the overall operating efficiency and profit of the company to the user.
Speaker Change: And secondly, in the second half of the year, we will adopt a more dynamic approach to balancing growth and profitability.
Speaker Change: We will continue to invest in areas such as enhancing user experience, new user acquisition, and expanding market share. So at the same time, our business units will further strengthen their operational capabilities and efficiency.
Speaker Change: driving improvements in supply chain efficiency across the board. These advancements enable us to offer more competitive priced products to our users while enhancing overall operating efficiency and profitability for the company.
Speaker Change: 全年看,我们的目标是全年增速超过社林总额的增速
Speaker Change: While maintaining a high percentage of users' experience and market share, we expect the profit margin and profit margin of JD Group will increase at the same time.
Speaker Change: From a long-term perspective,
Speaker Change: There is no contradiction between business growth and profit.
Speaker Change: 然后存在着振兴环
Speaker Change: The business model of JD is based on the supply chain and the user experience is the core.
Speaker Change: We will improve the long-term supply chain capability and improve the user experience.
Speaker Change: focusing on innovative business entry thus enabling revenue from user experience and market鼓increases generating long-lasting profits We have confidence in the long-term mastering of high profitability goals
Speaker Change: So, looking ahead to the full year, our goal is to achieve a growth rate that outpaced overall market retail sales of consumer goods.
Speaker Change: As we continue to invest with disciplines in user experience and market share expansion, we expect JD Group's profits and profit margins to increase year on year.
Speaker Change: In the long run, we see a positive cycle between business growth and profitability rather than contradiction. JD's business model is built on a robust supply chain and focus on user experience.
Speaker Change: We will make targeted investments in these areas to enhance user satisfaction and strengthen our market position, ultimately achieving long-term sustainable profits.
Speaker Change: We're confident in our ability to reach the goal of achieving high single-digit profit margin over the long term.
Speaker Change: NGO辞职中
Speaker Change: China has the largest e-commerce market in the world.
Speaker Change: There are also very mature infrastructure that is suitable for e-commerce development.
Speaker Change: We believe that the scale of the Chinese e-commerce market will continue to grow over the long term.
Speaker Change: At the same time, we also believe that JD.COM has a unique and stable self-sustaining supply chain capability and JD.COM's logistics service capability, which can provide a better user experience and better cost-effectiveness.
Speaker Change: So let me address our second question about the market competition. In our opinion, China has the world's largest e-commerce market and the most mature infrastructure to support its continued growth.
Speaker Change: We believe that this market will keep expanding for a long time. At the same time, JD Retail's unique and robust one-piece supply chain capabilities combined with our self-operated logistic services form a strong moat for our business success.
Speaker Change: So these strengths enable us to deliver a superior user experience while excelling in cost and efficiency.
Speaker Change: First, let's look at the scale of the market.
Speaker Change: China's online retail market is very large.
Speaker Change: From the point of view of product categories, users, and business innovation,
Speaker Change: There is still room for improvement in online penetration rate.
Speaker Change: From the category point of view, there is a wide market space, including supermarkets.
Speaker Change: 家居品类目前的线上渗透率或者线上化率还是比较低的
Speaker Change: We still have a chance to improve the penetration rate.
Speaker Change: 而針對3C家電這些普遍被認為偏標品線上化率已經比較高的品類 我們其實看到線上滲透率仍然在提升 而且我們也在積極地布局線下零售網絡 來為用戶提供特殊的服務體驗
Speaker Change: So first, on China's retail market side, particularly the online sector, it offers tremendous opportunities for growth.
Speaker Change: So while we examine online penetration from the perspective of product categories, user demographics, and business innovations, there remains significant room for expansion.
Speaker Change: So, there is substantial potential for online penetration in categories such as supermarket and home goods where the online sales still have a lot of opportunity to continue to grow.
Speaker Change: Even in some categories like 3C products or home appliances, which are traditionally we consider our standard products, and they already have a high online penetration rate. We continue to see this category is growing online.
Speaker Change: So, simultaneously, we are actively developing our offline retail networks for these categories to provide more specialized shopping experience for our users.
Speaker Change: From the point of view of the population and users, young people's online shopping habits have been educated since they were young, so they rely more on and trust e-commerce.
Speaker Change: 而老年人也在逐步地接受线上购物,为电商带来新的增量。 目前我们看到京东平台这两个人群的增长都非常健康,高于我们整体的用户增速。
Speaker Change: So on the demographics
Speaker Change: For the young generation, they grow up with online shopping. They're already highly accustomed and reliant on e-commerce platforms.
Speaker Change: And now the older generations are also embracing online shopping, creating new opportunities for growth. At JD, we have observed strong user growth in both these two user groups, with their growth rates surpassing our overall user-based growth.
Speaker Change: 另外還有不同的線上模式在湧現,都在推動線上滲透率的持續提升。 總體上來看,網上食物零售的增速依舊快於整體設定。
Speaker Change: Additionally, the emergence of new online shopping formats continue to drive increased online penetration. So overall, China's online retail for physical goods is outpacing the broader retail market as we observe.
Speaker Change: Second, based on the competitive pattern of the e-commerce industry, China's e-commerce industry is very large and full of vitality. It has been attracting different types of customers.
Speaker Change: And may be good. To put on the washing economises that say this.
Speaker Change: We also believe that the essence of e-commerce still lies in how to better enhance user experience and how to achieve efficient win-win cooperation with partners, which is the continuous optimization of cost, efficiency, and experience that we have long adhered to.
Speaker Change: and on this e-commerce market competition landscape.
Speaker Change: We see China's e-commerce industry is vast and dynamic, with room for various players employing different models, features, and competitive advantages.
Speaker Change: We believe that the essence of retail will always boil down to two fundamental questions that are how to enhance user experience and how to achieve win-win outcomes with partners.
JD.com: At JD.com, we are committed to these long-term goals by continuously optimizing our cost efficiency and user experience.
Speaker Change: The biggest advantage of JD is the cost-efficiency experience brought by our self-employed retail and JD logistics. In the past year, we have been continuously strengthening our ability in the supply chain to continue to gain new users. We also see that our second quarter number of users continues to grow in double digits.
Speaker Change: Returnees, over two years, and new and old users are all increasing their sales. Shopping rates are also increasing in double digits. So we are still confident in the long-term development or penetration of e-commerce.
Speaker Change: So JD's key differentiators separate us from others are our cost efficiency and user experience driven by our 1P ritual business and our self-operated logistic services.
Speaker Change: And over the past year, we have intensified our efforts to strengthen our supply chain capabilities and enhance our user experience. And in Q2, we continue to see double-digit user growth led by our record users and long-term core users.
Speaker Change: with over two years of engagement with us and users' shopping frequency also maintained a double-digit growth. So overall we are confident on China's e-commerce market growth. Thank you.
Speaker Change: Thank you, Ronald. Next question, please.
Speaker Change: Our next question comes from Alicia Yap of Citigroup.
Paolo: Hello.
Speaker Change: Thank you, good evening, good evening. Thank you, thank you for your question.
Alicia Yap: Two questions. One is...
Speaker Change: 政府近期其實宣佈了支持推進家電 就換新的政策和舉措
Speaker Change: How will JD.com cooperate with the local government and home appliances manufacturers?
Speaker Change: We understand that JD.com has been participating in the daily sales of rescue innovation Can the government's new policy bring an additional income growth to JD.com?
Speaker Change: The second question, actually I want to ask, because in the current environment, overall consumer sentiment is still not very strong.
Speaker Change: We have a relatively strong and stable ability to resist commodity overpricing. So I would like to ask if JD will be more competitive in the supply of commodity overpricing.
Speaker Change: and provide more marketing strategies to enhance the demand for supermarkets. Let me translate it for you.
Speaker Change: Two questions. First is that given the latest announcement of central government support of the push forward,
Speaker Change: the appliance trade-in initiative, and how and what are JD's plans on cooperating with the local government and also the appliance suppliers.
Speaker Change: understood that JD has been participating and facilitating the trading process during the normal routine demand. How much incremental or what can we expect from the later push of the central government to translate to the JD's top-line growth in the coming quarters? And then second question, in light of the soft consumption sentiment,
Speaker Change: will JD shift more focus to enhance the FMCG SKU offering with the innovative pricing promotion to boost the consumption demand for the FMCG product given the product is actually more resilient into the weak economy. Thank you.
Speaker Change: Thank you Alicia for your question.
Speaker Change: First of all, based on our past experience, the exchange of hearts is to promote...
Speaker Change: We are a high-end single-priced product, especially a more effective way to increase electricity consumption. Our business has been in practice for many years and has accumulated a lot of experience. We have a good linkage strategy with the brand. We support and welcome the country to promote consumption through new solutions.
Speaker Change: Thank you Alicia for your question. So from our JD's experience has shown that promoting trade-ins is an effective way to boost
Speaker Change: a big ticket consumption. We have been actively implementing a relevant initiative for some time and building strong partnerships with our brand partners.
Speaker Change: and accumulating valuable experience in this aspect. We highly support and welcome the government's support in promoting trade-ins and other measures to stimulate consumption.
Speaker Change: On the policy side, as you said, the Development and Reform Commission released a new policy at the end of July and the power supply is also one of the key ways to subsidize consumer goods In terms of rhythm, we also expect to launch and land on a large-scale in the near future
Speaker Change: And on the policy level as you mentioned that in the end of July the NDRC has issued supportive policies on the trading services and home appliances. It's a key area eligible for these supportive measures and we expect certain policies will be rolled out very soon.
Speaker Change: We are also working with local governments to landных the ISOC proposals We are also working with manufacturers to promote and sabiaise the issue
Speaker Change: 具体来说呢,那首先三月份...
Speaker Change: After the new action plan for replacement was issued, we have actually been building our supply chain capabilities for the replacement.
Speaker Change: quickly created cooperation with multiple provinces.
Speaker Change: In many cases, Xindong was chosen by the government to be the distribution platform for subsidies to subsidize home appliances that meet policy conditions. In terms of model creation and sales pull, it has created better results for all sectors.
Speaker Change: So currently, for the implementation, we have been working with the local government and various brands to carry out the implementation of the supportive policies and subsidies.
Speaker Change: since the release of the Treaty Action Plan in March.
Speaker Change: We have been establishing partnerships with various provinces and city governments and we have been selected as a designated platform to distribute government subsidies.
Speaker Change: and applying them to products that meet the policy criteria. And so far, our cooperation models and promotional efforts have yielded some positive results.
Speaker Change: We will continue to follow up on policies based on the good cooperation with local governments and do systematic and systematic work. We have done everything necessary to prepare for the second half of the year.
Speaker Change: and with the central government's recent policy announcement
Speaker Change: We will build on our solid collaboration foundation with the governments and partners to further collaborate on the treaty initiative, helping distribute subsidies to the local consumers, both on the system level, on the processes level. We are very ready, for example, with the technical back ends and on every front.
Speaker Change: And we are not only selling online, but we can also cooperate with local governments. We also have super experience stores in Jingdong and five-star chain stores all over the country. We can also collect subsidies from consumers offline.
Speaker Change: Not only our collaboration online, we are also leveraging our offline presences, including our JD's home appliances experience stores, chain stores for home appliances to provide all kinds of services and trade-in promotions to our consumers across the country.
Speaker Change: 同时我们也跟各个品牌厂商共同成立了京东家电家居换新联盟 在全国20个省市地区推出了已经换新的补贴活动 那么也携手为各地消费者更省钱更省心的购买家电家居产品
Speaker Change: At the same time, we have partnered with a brand to launch JD Home Appliance trade-in eye lines and introducing trade-in subsidy activities across 20 provinces and cities. And through these eye lines,
Speaker Change: We can offer cost-saving products and convenient services to our customers in different regions.
Speaker Change: 最后回答你的问题,就是我们也预估这一次中央已交换新的总统。
Speaker Change: The policy will bring a certain amount of increase to the home appliance industry and JD We also expect to exchange new sales accounts in the future
Speaker Change: Overall, Jindong will also rely on our own good system ability to save and rejuvenate.
Speaker Change: and the whole process to work hard to do a good job in the exchange of new subsidies and to work with local governments and manufacturers to promote electricity-efficient consumption in the whole industry.
Xu Sheng: Xu Sheng
Speaker Change: And to circle back to your question from our, the, this time, the
Xu Sheng: the release of the new policies.
Speaker Change: We do expect this will be effective to drive the growth of our home appliance industry and for JD.com, it will provide certain incremental and we anticipate that the sales share from trade-ins on JD platform will increase in the near future.
Speaker Change: And we will also leverage the trading service, our trading service capabilities on the systems, on the processes to maximize this opportunity to implement relevant measures and working alongside local governments and manufacturers to further stimulate home appliance consumption.
Speaker Change #100: Thank you.
Speaker Change #101: 关于商超品类的问题呢,大家也看到,其实今年我们商超品类经营能力还是取得了不错的提升,所以也带来了收入的比较健康的增长。 在我们看来,商超品类尽管竞争很激烈,但它在整个中国大零售的行业里面还是一个高度分散的品类。
Speaker Change #101: Therefore, we are confident in the long-term growth of the online penetration rate and the long-term growth of the commodity market in Jingdong. We also believe that we can improve the user experience and continue to gain market share by differentiating. The commodity market is also...
Speaker Change #101: will continue to be the main driving force for growth in Jingdong.
Speaker Change #102: And for the second question on a supermarket category, we've made some good progress in enhancing our operational capabilities in the supermarket categories and it has resulted in some healthy revenue growth.
Speaker Change #102: And despite intense competition, and you see this supermarket category is very decentralized and dispersed across the market.
Speaker Change #102: Looking at our operational improvements, we still have very strong confidence in the long-term potential of this category.
Speaker Change #102: and by leveraging our GD's unique strengths.
Speaker Change #102: We believe JD Supermarkets will continue to help us to enhance user experience and expand market share. It will serve as a key growth driver for the whole company.
Speaker Change #103: Okay, thank you Alicia. Let's have the last question please.
Speaker Change #104: Your next question comes from Thomas Chong with Jeopardy.
Thomas Chong: Good evening. Thank you for accepting my question. My first question is to ask you about the company's profit in the next few years, and your opinion on the death rate. My second question is about shareholder returns. I would like to ask you about the latest situation of shareholder returns and your thoughts. Thank you.
Speaker Change #106: Thanks management for taking my question. My first question is about earnings outlook. Can management share your view about the trend in earnings and margins outlook over the next few years?
Speaker Change #106: My second question is about shareholders' returns. Can management share your latest reports about share repurchase and dividends? Thank you.
Speaker Change #106: Thomas, let me answer your question. In general, the mid-to-long-term profit target for JD is high.
Speaker Change #107: We are confident that the platform ecosystem, product mix, and product profitability will continue to grow.
Speaker Change #108: And thank you, Thomas. To answer your question, I'll admit to a long-term goal to achieve a profit margin in high single digit.
Speaker Change #108: And we are optimistic about reaching this target.
Speaker Change #108: and our key growth driver includes the growth of our platform ecosystem, category mixed optimization and profit margin improvements across
Speaker Change #108: there is categories.
Speaker Change #109: First of all, this year's Q2 Group Profit is innovative, reaching 14.5 billion, and the first profit rate to reach 5%. The core is still the increase in supply chain efficiency and the improvement of gross profit. In the long run, JD's profit rate still has a lot of room for improvement.
Speaker Change #109: So for JD Group's Q2 net profit hit a historic high of 14.5 billion yuan with a net profit margin of 5% driven largely by improved gross profit margins from enhanced supply chain efficiency.
Speaker Change #110: We see significant potential for future, for further margin expansion in the long term.
Speaker Change #110: Second, the long-term profitability of JD will continue to improve with the health development and operation efficiency of the business. As we have introduced before, we believe that the long-term profitability of JD can reach a high level of multi-digit.
Speaker Change #110: and as our business and operational efficiency continue to improve, we believe that we will achieve a high single-digit profit margin in the long term.
Speaker Change #110: Third, JD's long-term sustainable profits come from our market position and user experience. We will continue to invest time and resources in improving product prices and services.
Speaker Change #110: to provide a better experience for our users to boost the continuous growth of GMV and expand the market share. At the same time, with the expansion of the business scale and the improvement of the market status, our supply chain advantages and efficiency will continue to improve and bring a healthy growth of profits so that we can continue to invest in product pricing services and improve the user experience.
Speaker Change #110: It is long-term profitability will be anchored by our strong market position and focus on user experience.
Speaker Change #110: By continuously investing in our product, price, and service, we're able to enhance users' experience and satisfaction.
Speaker Change #110: so as to drive up our GMV growth to expand market share. And by leveraging our increasing scale and market share, we further improve our supply chain efficiency, which in turn will boost.
Speaker Change #110: healthy profits growth allowing us to reinvest to to reinvest and enhance user experience.
Speaker Change #111: In summary, there is still significant room for improvement in our profitability, including the increase in the proportion of 3P, changes in category mix, and the improvement in efficiency within categories leading to higher profit margins. In the long term, JD.com's profit margin can reach a high single-digit level.
Speaker Change #112: So, to summary, JD's profitability has ample room for growth, driven by higher 3P contributions and improved category mix.
Speaker Change #112: and margin potential within each category so our long-term profit margin target remains set in high single digits.
Speaker Change #112: 关于股东回报的问题
Speaker Change #113: We have made a very firm commitment to shareholder returns. In Q2, we completed a total of about $2.1 billion in stock repurchase in the US and Hong Kong markets. We repurchased about 1.37 billion ADS, or 68.4 million shares.
Speaker Change #113: That's equivalent to 4.5% of the shares in circulation as of March 31, 2024.
Speaker Change #113: And on the return to shareholders, we remain committed.
Speaker Change #113: to return to shareholders.
Speaker Change #113: And for Q2, we repurchased approximately 2.1 billion USD worth of shares across the U.S. and Hong Kong stock markets, equivalent to 137 million ordinary shares.
Speaker Change #113: or 68.4 million ADS, representing approximately 4.5% of our outstanding shares as of March 31st, 2024.
Speaker Change #114: In the first half of this year, we have accumulated $3.3 billion in revenues and accumulated $2.24 billion in revenues in general stocks and $1.12 billion in ADFs.
Speaker Change #114: which is equivalent to 7.1% of the share market at the end of 2023.
Speaker Change #115: Additionally, the $1.2 billion annual dividend plan we announced in Q1 was also distributed in Q2. In the first half of this year, JD.com distributed a total of approximately $4.5 billion through dividends and buybacks.
Speaker Change #115: In the first half of the year, we completed
Speaker Change #115: Share buybacks totaling $3.3 billion USD, equivalent to 224 million ordinary shares, or 112 million ADS, accounting for 7.1% of our total outstanding shares as of the end of 2023.
Speaker Change #115: Additionally, we completed our US$1.2 billion annual dividend payment plan in Q2, returning a total of around US$4.5 billion to shareholders through dividend and payback in the first half of the year.
Speaker Change #115: In the future, we will carry out a firm rebuy of the shareholder's return plan. The goal is to reduce the total shares for a long time. At the same time, we will continue to share profits and dividends and share the company's success with shareholders.
Speaker Change #115: For future plan of shareholder returns, we will continue our repurchase plan with the goal of gradually reducing the total number of outstanding shares over the long term. We will also maintain dividend payments based on profits, ensuring that shareholders benefit from the company's value creation.
Speaker Change #115: Thank you.
Sean Zhang: We are now approaching the end of the conference call. I will turn the call over to JD.com's Sean Zhang for closing remarks.
Sean Zhang: Thank you everyone for joining us on the call today and thanks for your questions. If you have further questions, please contact me and our team. We appreciate your interest in JD.com and we look forward to talking with you again next quarter. Thank you very much.
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