(Yicai) March 7 -- JD.Com’s shares jumped after the Chinese e-commerce giant said profit soared 133 percent last year following price cuts and it expects the country’s consumption recovery to strengthen. The online retailer also signed off on a USD3 billion stock buyback program.

JD.Com [HKG: 9618] closed 6 percent higher at HKD94.55 (USD12.09) a share in Hong Kong today, after earlier surging by as much as 9.7 percent. In New York yesterday, its stock [NASDAQ: JD] soared 16.2 percent to USD24.91.     

Net profit was CNY24.2 billion (USD3.4 billion) in the 12 months ended Dec. 31, the Beijing-based firm said in an earnings report released yesterday. Revenue rose 3.7 percent to CNY1.09 trillion (USD151.4 billion) from a year earlier, after climbing 9.9 percent in 2022. Based on non-generally accepted accounting principles, net profit jumped 25 percent to CNY35.2 billion last year. 

JD began a CNY10 billion (USD1.5 billion) subsidy campaign early in 2023 to compete with group-buying platform Pinduoduo, China’s e-commerce market leader for low-priced goods, and moved into livestream e-commerce, Douyin’s domain. In December, founder and Chairman Richard Liu said JD was bloated and inefficient and accepted responsibility for its failings. Urging staff not to “lie flat,” or give up working hard, he vowed change.

“JD's proactive actions have begun to produce results as our decisive focus on user experience, price competitiveness, and platform ecosystem drives deeper and more frequent user engagement and healthier user growth momentum,” Chief Executive Sandy Xu said in a press release to accompany the earnings.

JD upgraded its subsidy support for vendors in the third quarter with 20 new initiatives, Yicai learned. The number of third-party merchants on the platform surged 188 percent to nearly one million at the end of 2023 from a year earlier, while the number of stock-keeping units almost doubled from the start of the year.

JD’s marketing expenses rose 6.3 percent to CNY40.1 billion, while general and administrative costs fell 12.2 percent to CNY9.7 billion (USD1.4 billion), mainly due to a reduction in equity incentive expenses.

Though consumers have tightened their belts, JD noted the recovery trend in China’s economy and consumption amid government policy support.

“With the expected effects of the micro stimulus plans and consumption promotion policies, we believe the momentum of consumption recovery and expansion will be further consolidated or strengthened,” Xu said on the firm’s earnings conference call. “We maintain the confidence to outperform the overall broader market.”

JD.Com also said yesterday that it will repurchase as much as USD3 billion of its own stock, including American depository shares, over the next 36 months. Buybacks are generally aimed at buoying a firm's stock price by removing some of its shares from the market. JD’s shares have fallen over 46 percent in the past 12 months.

In an annual earnings report also published yesterday, JD Logistics, the online retailer’s courier arm, said it had turned a profit of CNY1.2 billion in 2023, after losing CNY1.1 billion the year before. Revenue jumped 21 percent to CNY166.6 billion (USD23.1 billion).

Adjusted net profit surged 219 percent to CNY2.8 billion, JD Logistics noted. External customer revenue rose 31 percent to CNY116.6 billion, accounting for 70 percent of the firm's total.

Editors: Shi Yi, Martin Kadiev