Morgan Stanley has released a report predicting that JD.com (JD.US)      invested over RMB10 billion in its food delivery business in 2Q25, leading to a 63% YoY decline in non-GAAP net profit.

Based on the broker's observation, however, JD.com's core e-commerce business didn't experience significant cross-selling or other synergies from this investment. JD Retail's revenue growth didn't show a noticeable quarterly growth, nor did its profit margins show any substantial improvements.

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Morgan Stanley lowered its 2025-27 earnings forecasts for JD.com by 39%/ 32%/ 30% to reflect the impact of the investment in the delivery business. The broker also cut its target price for the company from USD39 to USD28. It believed that the valuation level was reasonable, aligning with the similar valuation multiples of BABA-W (09988.HK)  +0.300 (+0.264%)    Short selling $1.71B; Ratio 15.246%   's e-commerce business. The rating was kept as Equalweight.

Under pressure from intensified subsidies offered by BABA-W and MEITUAN-W (03690.HK)  -2.100 (-1.664%)    Short selling $1.14B; Ratio 20.121%   , Morgan Stanley predicted JD.com to maintain at least the same level of investment in its food delivery business during the summer peak season as it did in 2Q25.
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