JD.com shares fall 13%, hits record low; banks cut Q3 growth target on retail slowdown
Chinese e-commerce giant JD.com fell as much as 13% to a record low on Friday after several banks and brokers cut price targets and revenue growth forecasts for the firm, citing a weaker-than-expected recovery in consumer spending.
The brokerages and banks including Citi, Daiwa and Jefferies, which issued notes to clients on Thursday and Friday with the revised estimates.
JD.com, which is listed in Hong Kong and the United States, is expected to report quarterly financial data in mid-November following China's main online shopping festival, Singles' Day.
Shares in JD.com, which is also China's largest home appliance retailer, closed at their lowest level since their June 2020 debut.
A debt crisis in the key property sector has contributed to slowing China's economic growth after the pandemic, while many Chinese have cut back on spending due to concerns over the economy and job security, hurting the retail sector.
In March, JD.com warned it would take time to rebuild consumer confidence post-pandemic as it missed fourth-quarter revenue forecasts.
Citi Research lowered its revenue assumption for JD.com by 3.4% and 4.3% for the third and fourth quarter, saying that it now estimates 0.8% and 1.3% growth respectively.
The bank's analysts cited a «relatively muted consumption trend, high base, intense competition, and on-going impact from restructuring adjustment» for the change in estimates.
Nomura said JD.com had yet to see any meaningful improvement in retail since the third quarter, adding that the company had also missed on any positives from the stimulus policies China has rolled out since September to rescue the property market.
JD.com said it had no comment on the analyst revisions and its share price
