JD Logistics’ Earnings Call: Optimism Amidst Challenges

JD Logistics, Inc. ((HK:2618)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call of JD Logistics, Inc. painted a picture of optimism amidst challenges. The company reported significant revenue growth and strategic expansions both domestically and internationally. However, it also faced hurdles such as a decline in non-IFRS profit, increased costs, and a leadership transition. Despite these challenges, the overall sentiment was positive, driven by strong revenue performance and strategic initiatives.

Strong Revenue Growth

JD Logistics achieved a remarkable total revenue of RMB 55.1 billion in Q3 2025, marking a 24.1% year-over-year increase. This impressive growth underscores the company’s robust business model and its ability to capture market opportunities effectively.

Significant Growth in Integrated Supply Chain Revenue

The company saw a substantial increase in revenue from its Integrated Supply Chain (ISC) customers, reaching RMB 13.1 billion, a 45.8% year-over-year rise. Notably, external ISC customers contributed RMB 8.9 billion to this growth, highlighting JD Logistics’ expanding influence in the supply chain sector.

Expansion of Warehouse Network

JD Logistics has significantly expanded its warehouse network, which now covers nearly all regions in China. The network includes over 1,600 self-operated warehouses and 2,000 third-party cloud warehouses, totaling more than 34 million square meters, enhancing its logistics capabilities.

Advancements in Automation and AI

The company is investing heavily in AI and automation technologies, deploying unmanned vehicles and robotic systems across logistics processes. These advancements are set to enhance operational efficiency and streamline logistics operations.

International Expansion

JD Logistics is making strides in international markets, with plans to double the gross area of its overseas warehouses by the end of 2025. The opening of a new spare parts warehouse in Dubai exemplifies its commitment to global growth.

Acquisition and Integration of Delivery Services

The acquisition of JD Group’s local on-demand delivery subsidiaries aims to enrich JD Logistics’ product portfolio and improve last-mile delivery efficiency, positioning the company for enhanced service delivery.

Decline in Non-IFRS Profit

Despite revenue growth, JD Logistics reported a decline in non-IFRS profit to RMB 2.02 billion, down 21.5% year-over-year. The non-IFRS EBITDA margin also decreased to 9.7%, reflecting increased operational challenges.

Increased Employee Benefit Expenses

Employee benefit expenses rose by 49.8% year-over-year, driven by the addition of full-time food delivery riders and operational employees, impacting the company’s cost structure.

Higher Operating Expenses

Operating expenses increased by 15.9% year-over-year, accounting for 6.7% of total revenue. This rise in expenses highlights the cost pressures faced by the company amidst its expansion efforts.

CEO Transition

The announcement of CEO Hu Wei’s departure, with Wang Zhenhui taking over, marks a significant leadership transition. This change could present challenges but also opportunities for strategic realignment.

Forward-Looking Guidance

Looking ahead, JD Logistics remains committed to its growth trajectory. The company aims to continue expanding its warehouse network and international presence, with plans to double the gross area of its overseas warehouses by the end of 2025. These strategic initiatives are expected to drive future growth and enhance the company’s competitive position.

In conclusion, JD Logistics’ earnings call reflected a blend of optimism and caution. While the company faces challenges such as declining profits and increased costs, its strong revenue growth and strategic expansions offer a promising outlook. The leadership transition presents both challenges and opportunities for the company as it navigates its future path.