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QS Research · Michael Burry's Scion Capital analyst template · 2006

JD.com, Inc. (JD)

As of 2026-11-02 · 11/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case 0% · downside -18% · upside +50%

JD trades at 0.06x TTM EV/Sales and 6.0x EV/EBITDA with a net cash position of about $25.28B against a $36.52B market cap, but its TTM EBITDA is only $1.88B, so the market is not clearly mispricing the business on current earnings. Applying the peer EV/EBITDA range of 2.5x–15.7x to that EBITDA and adding net cash gives a downside of $21.8 per ADS (-18%) and an upside of $39.9 per ADS (+50%), while the current 6.0x multiple implies about $26.6 per ADS (0%). The long rule requires a base case of at least +30%, so the stock is not a long yet, but the downside protection from net cash and aggressive buybacks makes it a watch rather than a pass or short. Q2 2026 shows a profit inflection (operating income RMB4.5B vs a loss) even as revenue declined, so the problems may be temporary, but the base case lacks the required margin of safety.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    JD.com is a supply chain-based technology and service provider. It earns revenue from online retail (buying and reselling products), marketplace commissions, logistics services, healthcare, industrial supply chain, property management, and a food delivery business launched in February 2025. Revenue grew from CN¥745.80B in FY2020 to CN¥1,309.09B in FY2025, and as of December 31, 2025 it operated over 1,600 warehouses. Key consolidated subsidiaries include JD Logistics, JD Health, JD Industrials, and JD Property; Dada was taken private and CECONOMY is being acquired.

  2. ✓ 2. Competitive advantage

    JD’s competitive position rests mainly on its nationwide self-operated fulfillment network and the JD brand, but the online retail market is intensely competitive (Alibaba, Suning, and others). FY2025 shows the squeeze: revenue rose to CN¥1,309.09B but operating income fell to CN¥2.77B, marketing expense rose to 6.4% of revenue, and inventory turnover days increased. The sources do not demonstrate a durable high-margin advantage; FY2025 reported net income was supported by non-operating items, not operating profit.

  3. ✓ 3. 10-Q takeaways

    In Q2 2026, JD.com's net revenues fell 2.9% YoY to RMB346.4 billion on a high base, but operating income swung to RMB4.5 billion from a loss, and net income attributable rose to RMB7.1 billion. JD Retail operating margin hit 4.6%, and marketing spend was cut sharply while fulfillment and R&D rose. The company repurchased US$1.0 billion of shares in H1 2026 and management cited strong bottom-line growth and narrowing New Business losses, but gave no numerical guidance.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ○ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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