UBS July 10th In-Depth Analysis: JD's $1.4B Food Delivery Bet Triggers 61% Profit Plunge

UBS's latest report reveals JD's Q2 food delivery investment of RMB 10B, with full-year projection of RMB 35B, directly causing adjusted net profit to plummet 61% YoY to RMB 5.6B. Despite near-term pressure, JD's retail business shows resilience with 14% revenue growth outpacing market's 7%, maintaining stable 3.9% profit margin. Key highlights: DAU/MAU growth leading e-commerce peers since April, significant traffic gains among female users and lower-tier cities, early signs of food delivery-retail synergy. UBS cuts target price to $50 but sees limited downside risk at current 8x core P/E valuation. Investors should focus on food delivery ROI inflection point and cross-selling effectiveness.