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JD.com’s shares soared by 12% in U.S. premarket trading on Wednesday after the company reported fourth-quarter revenue that surpassed analyst estimates.
The retailer also revealed plans to expand its share repurchase program, signaling confidence in its prospects.
Aggressive Price Cuts Drive Fourth-Quarter Growth of JD.com:
In the final months of 2023, JD.com implemented aggressive price cuts, particularly during China’s Singles Day shopping festival. This bolstered consumer demand amidst economic uncertainty, helping the company exceed revenue expectations for the quarter.
JD.com responded to China’s shaky economic growth, high youth unemployment, and lower wages by offering heavy discounts to attract cost-conscious consumers. Despite these challenges, the company’s popularity among price-sensitive buyers has continued to grow.
JD.com Announces Plans to Repurchase Shares:
JD.com unveiled plans to repurchase up to $3 billion worth of its shares, including American depository shares, over the next 36 months. This move underscores the company’s confidence in its financial strength and long-term growth prospects.
Analysts believe that the “suspicious practices” identified in an internal audit of JD.com’s Dada Nexus unit are unlikely to significantly affect the company’s overall revenue. This assurance has helped alleviate investor concerns and contributed to JD.com’s share price surge.
Reflecting on Net Income and Share Performance:
JD.com reported a net income attributable to shareholders of 3.4 billion yuan, marking a more than 13% increase from the previous year.
Despite recent declines in its U.S.-listed shares, the company’s strong financial performance in the fourth quarter signals resilience and potential for future growth.
