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S&P: JD-SW's New Biz Expansion May Weaken Core Biz Strength
Recommend 28 Positive 35 Negative 12 |
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JD-SW (09618.HK) is strengthening its business, said rating agency S&P. The rapidly growing department store category and logistics business have made the company more resilient, while the proposed acquisition of Germany's Ceconomy AG will contribute to its investment portfolio. That being said, the still-substantial losses from new businesses like food delivery will limit JD-SW's earnings growth. In S&P's estimate, JD-SW will see its EBITDA margin recover to 2.8% by 2026, as it is striving to reduce losses in its food delivery business by improving operational efficiency. The company's EBITDA margin decreased from 5.3% in 2024 to 2.2% in 2025, the same year when losses from new businesses eroded 82% of the operating profit from retail and logistics businesses. S&P believes it won't be easy for JD-SW to achieve a turnaround. JD-SW's zero-commission merchant promotion ended in 2025, and whether merchants will continue to stay on its platform without this promotion remains to be seen. On top of that, competition is still very fierce, as MEITUAN-W (03690.HK) and BABA-W (09988.HK) are committed to maintaining or expanding their market share. AAStocks Financial News |
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