Jingdong (JD) net revenues for the first quarter of 2019 were RMB 121.1 billion (US$118.0 billion), an increase of 20.9% from the first quarter of 2018. Net service revenues for Q1 2019 were RMB12.4 billion (US$1.9 billion), an increase of 44.0% from the first quarter of 2018.
Income from operations for the first quarter of 2019 was RMB1.2 billion (US$0.2 billion), compared to RMB4.4 million for the same period last year according to JD’s announced financial results.
Non-GAAP income from operations for the first quarter of 2019 was RMB2.0 billion (US$0.3 billion) with a non-GAAP operating margin of 1.6%, as compared to non-GAAP income from operations of RMB0.8 billion in the first quarter of 2018 with a non-GAAP operating margin of 0.8%.
Operating margin of JD Retail (formerly known as JD Mall) before unallocated items for Q1 2019 increased by 0.6 percentage point compared to the same period last year.
Net income attributable to ordinary shareholders for the first quarter of 2019 was RMB7.3 billion (US$1.1 billion), compared to RMB1.5 billion for the same period last year.
Non-GAAP net income attributable to ordinary shareholders increased by 215% to RMB3.3 billion (US$0.5 billion) in the first quarter of 2019 from RMB1.0 billion in the first quarter of 2018.
Diluted EPS and Non-GAAP Diluted EPS. Diluted net income per ADS for the first quarter of 2019 was RMB4.96(US$0.74), compared to RMB1.04 for Q1 2018. Non-GAAP diluted net income per ADS for the first quarter of 2019 was RMB2.23(US$0.33), compared to RMB0.71 for the same quarter last year.
Annual active customer accounts increased to 310.5 million in the twelve months ended March 31, 2019, from 305.3 million in the twelve months ended December 31, 2018.
Quarterly active customer accounts in the first quarter of 2019 increased by 15% as compared to the same period in 2018.
JD.com’s focus on delivering the best and most trusted online retail experience to customers throughout China drove another strong performance for the first quarter
said Richard Liu, Chairman and CEO of JD.com.
We will continue to invest in key technologies and top industry talent as we work to reach an even broader customer base through cutting edge innovation. With our growing scale and increasingly efficient operations, JD.com remains well positioned to deliver strong shareholder value for the long term.
JD Business Highlights for Q1 2019
AEG, a renowned German manufacturer of design-focused premium home appliances, signed a strategic partnership with JD and debuted its high-tech products exclusively on JD.
Brands which launched flagship stores on JD recently include Swiss independent luxury watch brands ORIS, Tissot and TITONI, Italian fashion house MOSCHINO and popular New Zealand fresh food brands, Rockit and Zespri, among others.
In March, JD and Michelin China signed a strategic cooperation agreement, and JD became the first direct-supply e-commerce platform for Michelin in China. Consumers who buy Michelin tires on JD will be given priority to choose Michelin’s high-end service networks such as TYREPLUS to enjoy premium installation service.
JD Logistics launched China’s first rotating package handling system designed for frozen storage at its Wuhan Asia No.1 warehouse.
Featuring mobile shelves which convey frozen products to staff in a separate area, the system alleviates the need for frequent trips to the freezer area and significantly enhances working conditions and efficiency as compared to traditional approaches.
In March, JD Logistics also launched its self-developed visual recognition batch scanning system at its Wuhan Asia No.1 warehouse, greatly improving efficiency and accuracy at the warehouse’s receiving station.
As of April 30, 2019, JD.com’s joint venture, Dada-JD Daojia, had partnered with over 270 Walmart stores, over 700 Yonghui stores, over 180 Carrefour stores and over 1,000 CR Vanguard stores, among numerous other leading supermarket brands, to provide customers with an integrated omnichannel shopping experience through Dada’s crowd-sourcing delivery network.
In addition, JD Daojia helped over 300 offline partners digitalize their operations.
Strategic Cooperation with Tencent
On May 10, 2019, JD renewed the strategic cooperation agreement with Tencent, for a period of three years starting from May 27, 2019. Tencent will continue to offer the company prominent level 1 and level 2 access points on its WeChat platform to provide traffic support, and the two parties also intend to continue to cooperate in a number of areas including communications, advertising and membership services, among others.
It is estimated that such traffic support, advertising spending, and other cooperation will amount to over US$800 million, which will be paid or spent over the next three years.
JD will issue to Tencent a certain number of the company’s Class A ordinary shares for a total consideration of over US$250 million at prevailing market prices at certain pre-determined dates during the three-year period.
Financing for JD Health
On May 9, 2019, the company entered into definitive agreements for the non-redeemable series A preferred share financing of its healthcare subsidiary, JD Health, with investors including CPEChina Fund, CICC Capital, and Baring Private Equity Asia, among others.
The total amount expected to be raised is over US$1 billion, representing over 14.5% of the equity interest of JD Health on a fully diluted basis, subject to closing conditions including regulatory approval applicable to certain investors.
JD will remain the majority shareholder of JD Health after the completion of the transaction. The new financing will enable JD Health to further expand its core business, attract industry talent and explore new initiatives in the broader healthcare sector.