JD.com (JD) is still filed in most investors’ minds under “big-box e-commerce and logistics,” a mature giant fighting for share in a brutally competitive market. But inside that familiar story, a newer one is taking shape: JD is quietly building a national food-delivery and local on-demand platform atop its existing rails.
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It’s a business most investors still treat as a footnote, even as it starts to show up in the numbers and in management’s priorities. So, let’s take a look at how JD slipped into food delivery, how this segment is changing the company’s growth profile, how it sits alongside the rest of JD’s operations – and why, at today’s valuation, the market is giving almost no credit for any of it.
How JD Slipped Into the Takeaway Wars
JD has been flirting with “instant retail” for nearly a decade. Its JD ‘Daojia’ on-demand platform, launched back in 2015, started by delivering groceries and supermarket items for partners like CR Vanguard and later sat within the “Shop Now” business, jointly developed with Dada Group.
What changed this year is that JD stopped flirting and went all in on actual restaurant takeaway. Back in February, it officially launched a dedicated food-delivery service, often referred to as JD Takeaway or JD Food Delivery, recruiting “quality dine-in restaurants.” And they did it with a very aggressive opening offer of zero commission fees for merchants who joined before 1 May. In some cities, online takeaway orders on JD reportedly surged more than 100x in the first weeks after launch.
Since then, the ramp has been remarkably fast. By November, JD noted that its food-delivery platform had onboarded over 2 million restaurants, with daily orders from the top 300 brands running 13x higher than in the launch month. The company layered on classic JD touches, including nationwide logistics infrastructure, promises of better worker benefits for full-time riders, and transparent subsidies, including a campaign offering 10 million hot meals at just 0.01 yuan to lure users away from Meituan (MPNGF) and Ele.me.
You see the impact in the Q3 segment numbers. JD’s “New Businesses” division, mainly consisting of JD Food Delivery plus JD Property, Jingxi discount retail, and some overseas operations, saw revenue more than triple year-on-year to about RMB 15.6 billion (~$2.2 billion). Internally, this sits in New Businesses, but in JD’s revenue charts, most of the food-delivery income is recorded under “Logistics and Other Services,” which is why that bar is swelling.
Note that, along with strong revenue growth, the division posted an operating loss of roughly RMB 15.7 billion (also ~$2.2 billion), almost entirely due to food-delivery subsidies. However, high investments are really needed to break into this business, so I don’t see what would otherwise seem like a harsh headline as a concern. After all, JD has a long history of delivering successfully on new investments.
Beyond Takeaway, the Core Business Is Still Firing
But besides the relatively new and exciting takeaway business, the core business is still going strong. In Q3, group net revenues rose 14.9% year-on-year, continuing a run of mid-teens growth that began late last year.
JD Retail, the core e-commerce and general merchandise arm, grew net revenues 11.4%, due to subsidies on appliances and a healthier mix of higher-margin supermarket and lifestyle categories. JD Logistics, the separately listed supply-chain arm, did even better, with Q3 revenue jumping 24.1%, while logistics and other service revenues were up around 35%, supported by new delivery volume from the food-delivery business.
Note that at the group level, JD’s operating margin swung from +4.6% in Q3 2024 to roughly –0.4% this quarter, and net profit fell to RMB 5.3 billion (~$0.75 billion), down about 55% year-over-year. However, management has been explicit that this is almost entirely the cost of buying market share in food delivery and funding other “New Businesses,” not a collapse in the economics of retail or logistics.
Regardless, JD beat EPS estimates by a wide margin in Q3, with adjusted EPS landing at $0.53, well above the $0.39 consensus estimate.
Cheap, Cash-Rich, and Ignored
Here’s where the disconnect gets hard to ignore. Over the past year, JD’s share price has fallen 17%, even as revenue has re-accelerated and user growth has held up. This has led the stock to trade at just about 8.6x forward earnings, which I believe is an extremely depressed multiple, even if we were to apply a “China discount.” For context, the S&P 500 (SPX) has a forward P/E of 22.4x, and JD is growing much faster than many of its constituents.
Of course, amid regulatory crackdowns, geopolitical tensions, and a bruising price war across e-commerce and food delivery, investors are demanding a considerable margin of safety before owning any mainland platform. But JD has that, boasting a net cash position of $22 billion, or about half today’s market cap. This also means the company has the option to buy back a significant chunk of its share capital if the valuation remains depressed.
Is JD a Good Stock to Buy Now?
JD currently holds a Strong Buy consensus on Wall Street, based on the view of nine analysts. Specifically, JD stock now carries eight Buy ratings and just one Sell rating. At $40.61, the average JD stock price forecast implies ~40% upside potential over the next 12 months. This highlights that most analysts do recognize the stock is likely highly undervalued today.
JD’s Margin Hit Masks a Strategically Expanding Growth Engine
JD’s push into food delivery has undeniably pressured near-term margins and rattled investors who focus on quick results. Yet beneath the surface-level volatility, the underlying data points to a business that is scaling rapidly and doing so in a way that aligns strategically with JD’s strengths in retail and logistics.
All of this comes packaged in a stock trading at single-digit earnings while holding roughly half its market value in net cash—an unusually conservative balance sheet for a company still expanding its reach. For investors willing to stomach China’s macro swings and regulatory unpredictability, JD’s setup merits more than a passing glance.