JD.com Inc.

The positive outlook reflects our expectations that JD.com's revenue will grow healthily at more than 18% and EBITDA will increase strongly at over 22% in the next one to two years. The growth is partly attributable to the company's more diversified product mix and improving scale. We expect the company to remain in a net cash position because it has a strong cash position of more than RMB120 billion as of Sept. 30, 2020, and generates healthy free operating cash flow. We could raise the rating if JD.com's revenue and EBITDA continue their robust growth and its debt-to-EBITDA ratio remains below 1.5x. This would happen if the company continues to gain market share and strengthen its business model to attract

...Cash inflows from listing of subsidiaries to satiate JD.com's increasing capital spending appetite. JD.com Inc. has listed its subsidiary JD Health International Inc. and raise US$3 billion¡US$4 billion in December 2020. We also expect subsidiary JD Logistics to be eventually listed, given its preferred shares were contingently redeemable. We view the listing of these subsidiaries as a credit positive to JD.com as it would reduce the internet retailer's gross debt balance and provide additional sources of liquidity to meet its investment appetite. The listing also improves transparency within JD.com's multiple business segments, although cash leakage could make it harder to upstream dividends when it becomes necessary. JD.com's prudent financial policy to support a net cash position over the next 12-24 months. We expect the company's investment appetite (including capital expenditure and acquisition) to stay elevated at Chinese renminbi (RMB) 20 billion to RMB24 billion a year in 2020 and...

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