Bulletin: JD.com In Balancing Act From A New Financial Policy

This report does not constitute a rating action. HONG KONG (S&P Global Ratings) March 13, 2023--JD.com's increased shareholder returns will limit its investment capacity. The China-based e-retailer may moderate its investments over the next six to 12 months as expansion in free operating cash flow slows. JD (A-/Stable/--) has an outstanding share repurchase program expiring in March 2024. The company also recently announced a US$1.0 billion dividend payment in 2023 and plans to adopt an annual dividend policy. We estimate shareholder returns of about Chinese renminbi (RMB) 14 billion for 2023. Capital expenditure and acquisitions could amount to about RMB30 billion. The combined amount would exceed the RMB40 billion operating cash flow we forecast for 2023. To fund the deficit,

...HONG KONG (S&P Global Ratings) March 13, 2023--JD.com's increased shareholder returns will limit its investment capacity. The China-based e-retailer may moderate its investments over the next six to 12 months as expansion in free operating cash flow slows. JD (A-/Stable/--) has an outstanding share repurchase program expiring in March 2024. The company also recently announced a US$1.0 billion dividend payment in 2023 and plans to adopt an annual dividend policy. We estimate shareholder returns of about Chinese renminbi (RMB) 14 billion for 2023. Capital expenditure and acquisitions could amount to about RMB30 billion. The combined amount would exceed the RMB40 billion operating cash flow we forecast for 2023. To fund the deficit, JD is likely to dip into its strong net cash position of about RMB102 billion as of Dec. 31, 2022. Meanwhile, JD's growth could slow as offline retailers regain traffic with improved mobility in China. Consumer spending also remains fragile. JD's active user base...

Bulletin