JD.com (JD.US), a prominent Chinese online retailer, is celebrating a legal victory against its rival Alibaba, which was fined 1 billion yuan ($140.68 million) for monopolistic practices. The High People's Court of Beijing ruled that Alibaba and its affiliates had abused their market dominance and engaged in monopolistic practices, causing significant damage to JD.com. This ruling, hailed as a landmark moment in upholding market fairness and competition order, marks a significant moment in China's anti-monopoly legal process. Despite this win, JD.com's shares have faced challenges, slumping about 50% year-to-date due to intense competition and a slowing Chinese economy.
Looking ahead to 2024, JD.com has announced plans to increase the salaries of its employees, nearly doubling the fixed salaries for procurement, sales, and other front-line staff starting January 1. This move comes as the company seeks to navigate a period of intense competition and uncertain consumer spending in China. Despite the tough market conditions, JD.com's recent earnings report showed a 6.9% year-over-year growth in non-GAAP net income per American depositary share and a 1.7% increase in net revenues, surpassing analysts' estimates. As the company prepares for the upcoming year, analysts hold a generally positive outlook, with a consensus EPS estimate of $0.66 for the fourth quarter and a revenue estimate of $41.97B. The salary increase and favorable forecasts position JD.com to potentially rebound and strengthen its market presence in 2024.
JD.com shares are rebounding from a bottom formed around $25. Historically, the $20-$25 range was a key consolidation level. Currently, the share price is over 75% lower than the historical highs of 2020. The open question remains whether the recent positive reports will be able to permanently change the trend on the company's shares and help rebound from the lowest levels of recent years. Source: xStation 5
