JD reported 1Q21 net revenue of Rmb203bn, up 39% yoy, and non-GAAP net profit of Rmb3.97bn, up 33% yoy, both slightly above our expectations. In the rest of FY21F, JD will invest heavily in Jingxi Pinpin by building up more short-chain supply chains for grocery products and 3P merchants and by offering subsidies to increase Pinpin’s brand recognition. On April 1, JD’s AAU exceeded 500m with about 80% of new users in 1Q21 from lower-tier markets. Reiterate Add with a lower DCF-based TP of HK$379 to reflect margin risk, as JD will step up its heavy operating investment in its Jingxi business group in FY21F.
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