Shares of Chinese e-commerce giant JD (NASDAQ:JD).com have fallen to their lowest level since June 2020, due to a combination of factors including economic uncertainty, reduced consumer spending, and the fallout from China's property sector debt crisis. The company's American Depositary Receipts (ADRs) are projected to open at nearly $26.50 per share on Friday, with a market capitalization above $40 billion, anticipated sales of $14.6 billion, and net income close to $3 billion.
Analysts from Citi Research, Daiwa, and Jefferies have revised their financial projections for JD.com ahead of its mid-November financial disclosure following Singles' Day. Citi Research has cut its revenue forecasts for JD.com in Q3 and Q4 by 3.4% and 4.3% respectively. This comes after JD.com missed its Q4 revenue targets and faced the challenging task of restoring consumer trust in the post-pandemic era.
JD.com is also grappling with intense competition from rival platforms such as Alibaba (NYSE:BABA) Group's Taobao and Tmall, as well as PDD Holding's Pinduoduo (NASDAQ:PDD). The company's growth has been further hampered by restructuring adjustments and the broader tech crackdown initiated by President Xi Jinping in late 2020. Despite these challenges, some analysts remain more concerned about the resilience of China's economy than JD.com's operations.
In another development, rumors have circulated about the arrest of chairman Richard Liu, leading JD.com to file a police report over these unverified claims. Liu, who resigned as CEO in April 2022, sold a significant portion of his stake in JD.com following his departure.
The downward trajectory of JD.com's share price underscores the current difficulties facing Chinese tech companies amid regulatory pressures and economic headwinds. Despite China's stimulus policies, JD.com has not seen any significant retail improvement, reflecting the broader subdued consumption trend in the country.
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