Goldman Sachs comments on JD's performance: Overall encouraging, differentiated advantages underestimated by the market.
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JD Group’s performance in the fourth quarter and full year of 2025 was marked by numerous highlights, with retail business profits reaching a historic high, faster growth in the logistics segment, and an active shareholder return policy that boosted investor confidence.
Goldman Sachs released a research report on March 6, noting that although JD Retail’s revenue in the fourth quarter saw a slight year-on-year decline due to the high base impact of government trade-in subsidies, strong growth in advertising revenue and narrowing losses in food delivery, coupled with management’s cautiously optimistic guidance for 2026, all exceeded market expectations.
The report stated, “JD is an underestimated, differentiated company in China’s internet sector, featuring the scale of a large retailer, a unique self-operated + platform dual-engine model, and industry-leading self-built warehousing and supply chain capabilities.”
This performance has validated JD Retail’s profit resilience. The company’s outlook for mid-single-digit revenue growth and stable profit margins in 2026, alongside JD Logistics’ stronger-than-expected growth guidance—over 20% revenue growth and even faster profit growth—provides investors with clear fundamental support. At the same time, the continued advancement of share repurchases and dividends also provides a margin of safety for the stock price.
In terms of capital market performance, JD’s Hong Kong shares surged nearly 10% today, as investors showed real financial support for the earnings report.
Key Data for Q4: Retail Profit Margin Exceeds Expectations, New Business Losses in Line with Forecasts
According to Goldman Sachs, JD Group’s fourth quarter revenue grew 2% year-on-year, which was basically in line with market expectations. Breaking it down, net product revenue fell 3% year-on-year, while net service revenue jumped 20%.
Electronics and home appliance category revenue declined 12% year-on-year, slightly better than Goldman’s forecast of -15%, mainly due to the high base from the trade-in subsidy policy launched in September 2024.
General merchandise revenue increased 12% year-on-year, maintaining double-digit growth for five consecutive quarters, though slightly below Goldman’s estimate of 16%. Marketplace and advertising revenue climbed 15% year-on-year, far exceeding Goldman’s expectation of 8%, benefiting from AI advertising technology, platform traffic increase, and incremental ad revenue from food delivery.
Notably, profitability continued to improve. JD Retail’s operating profit margin in the fourth quarter reached 3.1%, surpassing Goldman’s forecast of 2.7%. Full-year operating profit was RMB 51.4 billion, up 25% year-on-year and above Goldman’s estimate of RMB 49 billion; full-year operating margin rose from 4.0% in 2024 to 4.6%, a record high. New business segment posted a loss of RMB 14.8 billion, nearly matching Goldman’s estimate of RMB 14.9 billion, with food delivery losses narrowing by 20% quarter-on-quarter.
2026 Outlook: Steady Retail Growth, Accelerated Logistics
Management gave a rather positive business outlook for 2026. JD Retail expects mid-single-digit revenue growth with stable profit margins year-on-year, with improved operational efficiency offsetting pressure from the diminishing effects of national subsidy policies.
In the long run, the company aims to lift JD Retail’s operating margin to high-single-digit levels, mainly driven by optimizing sourcing capabilities, improving general merchandise and supermarket operational efficiency, and optimizing category structure.
Electronics and home appliances will continue to face high base pressure in the first half of 2026, but are expected to recover gradually in the second half as the comparative base loosens—government subsidy consumption was higher in the first half of 2025 than the second half, providing a favorable year-on-year basis for the second half of 2026.
General merchandise and supermarket businesses are expected to maintain double-digit growth, with increased penetration in healthcare and fashion categories serving as the main drivers. As of the reporting period, JD had over 730 million annual active users, with JD PLUS members exceeding 40 million.
For JD Logistics, Goldman noted its guidance was stronger than expected: projected revenue growth over 20% in 2026, with even faster profit growth. In the fourth quarter, JD Logistics revenue rose 22% year-on-year to RMB 63.5 billion, slightly beating Goldman’s forecast of 21%, with integrated internal supply chain revenue soaring 68% year-on-year, mainly driven by expansion in on-demand delivery services.
Multiple New Businesses Progressing, AI Empowers Operational Efficiency
Goldman’s report outlined JD’s progress in multiple emerging business areas.
In food delivery and retail innovation, food delivery operations maintained scale in the fourth quarter while compressing losses by 20% quarter-on-quarter; in 2026, further narrowing is expected via optimizing subsidy and fulfillment efficiency. By February 2026, there were more than 50 7FRESH restaurant locations.
For international business, JoyBuy is in trial operation stage, with positive user feedback on fulfillment experience; the company expects investment to increase quarter-on-quarter but will maintain a cautious pace.
In the lower-tier market, Jingxi focuses on supplying white-label goods to lower-tier cities; management expects a slight increase in investment this year, with unit economics continuously improving.
Meanwhile, AI adoption is accelerating across the company. JD AI digital assistant JoyStreamer was used by over 50,000 merchants in the fourth quarter; the AI customer service system handled more than 4.2 billion user inquiries during Singles Day; over 50,000 internal AI agents have been deployed.
The self-developed large model JoyAI supports over 1,000 real business scenarios, with token use increasing nearly 100-fold compared to 2024; JoyAgent annual active users exceeded 150 million, with user penetration over 20%, and the company targets a doubling in users by 2026.
Annual Return Rate Over 10%, Share Repurchase Continues
Goldman’s report shows JD’s shareholder returns were notable in 2025. In the fourth quarter, the company repurchased US$1.5 billion in shares as part of the US$5 billion repurchase plan (effective until August 2027), with a total repurchase of US$3 billion for the year, representing about 6.3% of total shares outstanding.
By year-end 2025, US$2 billion was left in the repurchase quota. The company also paid out US$1.4 billion in cash dividends for the year, about US$1 per ADS, resulting in a total annual shareholder return rate of more than 10%.
Goldman believes, JD Retail’s strong profitability in 2025 gives the company sufficient financial room to increase investment in new growth areas such as food delivery, Jingxi, and international business starting from the second quarter, helping build more sustainable growth momentum once the benefits of trade-in policies wane.
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