What Worries Does Jingdong Stock Price Drop?

In the evening of May 9th, Jingdong released its first quarter financial report in fiscal 2016, its net revenue was 54 billion yuan, an increase of 47.3% over the same period last year.

Total paction volume (GMV) reached 129 billion 300 million yuan (about 20 billion 100 million US dollars). Last year, Jingdong's core pactions totaled 83 billion 600 million yuan, an increase of 55% over the same period last year.

Jingdong's operating loss in the first quarter of 2016 was 864 million 900 thousand (about 1.341 billion US dollars), compared with a loss of 822 million 600 thousand yuan in the same period last year.

Why usher in a crash?

Before the deadline, Jingdong's share price fell by 8% in pre trading.

As of 22:00 Beijing time, its shares fell 1.97 to 23.23 U.S. dollars, or 7.78%.

We know that the development of Jingdong depends largely on the huge cash flow. The huge cash flow brings benefits to enterprises.

If Jingdong's revenue is 36 billion yuan this year, a loss of 2 billion yuan, but the account period is one month. If its monthly revenue is calculated as an average of 3 billion yuan, then the Jingdong will have more than 1 billion yuan by the end of the year. The 1 billion yuan will always be in the account of Jingdong, which is the cash flow.

If the account period is extended to two months, the cash flow will be 4 billion yuan.

So as long as Jingdong's revenues are increasing and losses are not increasing substantially, Jingdong's money will last for many years.

Compared with the Jingdong's fourth quarter earnings in 2015, the net revenue of the Jingdong was 54 billion 600 million yuan and GMV was 145 billion 300 million yuan in this quarter.

In the two quarter comparison, we found that Jingdong's net revenues or GMV have declined.

In fact, this is not the first time that Jingdong's core data has slipped. In fact, the fourth quarter also showed a decline in data compared with the third quarter.

Obviously, the reason for Jingdong's share price decline is due to the market's response to the dissatisfaction of Jingdong's revenue growth.

Just this morning, Jingdong group announced that Li Yonghe, the head of the original Jingdong mall operation system, resigned for personal reasons. Perhaps this is a gesture made by Jingdong to the capital market.

We know that the growth of Jingdong depends largely on the continuous burning of money. If there is no money burning, there is doubt about whether Jingdong can survive.

With the winner taking all the Internet environment, the Jingdong's chances of beating Alibaba are getting smaller.

Although self built logistics has helped Jingdong set up its core competitiveness, the rising labor cost is probably not optimistic.

AI media consulting CEO Zhang Yi said, "Jingdong is a fast moving capital enterprise. When the left hand comes in, the right hand will go out immediately. For such an enterprise, if there is no money to deposit on the account, if there is a problem, such as slow down the money, competitors suddenly force, and so on, it is basically unfavourable.

For example, 8848 of the year was a very valuable business, which was due to the shortage of cash flow reserves.

Why does the core growth rate of 3C disappear?

In order to increase the total volume of pactions and narrow the gap with Tmall, Jingdong is actively pforming to the "one stop shopping platform".

We must know that 3C has always been the most important category of Jingdong. Jingdong can have the status in today's electricity supplier industry. 3C can be said to be outstanding.

Financial reports show that Jingdong's pformation has been successful to some extent.

3C and home appliances accounted for 52% of Jingdong's core GMV in the quarter, compared with 53% in the same period last year, while the proportion of commodities and other commodities increased slightly.

But in a report of China Securities Corporation, in 2014, 3C accounted for 88% of the offline channels, and only 4 years later, online channels could account for the total in 2018.

1/3.

It is believed that 3C products will remain the core component of Jingdong GMV for a long time.

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In April 7th this year, Ali and Suning announced "joint training" to open up channels such as logistics and services.

Suning's advantages under the line make up for the shortage of logistics in Ali.

The flow also supports the online expansion of Suning, and the two sides have a clear intention to attack Jingdong's watchdog 3C digital home appliances under the mode of merging online and offline.

Tmall and Suning chose the 3C appliances which were good at Jingdong as the main battlefield, which undoubtedly brought enormous pressure to Jingdong.

On the one hand, Jingdong pformation has weakened the emphasis on 3C products, and has directed more traffic to non 3C categories.

On the other hand, the joint encirclement and suppression of competitors has also reduced the growth space of Jingdong 3C to some extent.

Although the 3C products are highly competitive and the price is very pparent, it brings higher GMV while matching income which may not be brought, but 3C products have the flow entry effect.

This is a key battle for Jingdong to influence the lifeline of market share.

Will home and finance become the future of Jingdong?

In the first four months of 2016, Jingdong finance has successfully completed the four phase of asset securitization, with a total financing of more than 5 billion yuan.

In addition, in March, Jingdong finance was granted the total amount of 10 billion yuan ABS special program in Shenzhen Stock Exchange, which was issued in five phases in one year.

In April, Jingdong announced the merger with dada, China's largest crowdsourcing logistics platform.

Not long ago, foreign media said Jingdong was planning to issue $1 billion 500 million bonds. Its purpose is self-evident, developing Jingdong's home and Jingdong's two financial sectors to represent the future core business of Jingdong.

In the current quarter, Jingdong has made important progress in the new fields of finance, O2O and technology, to some extent, showing the potential of long-term sustainable growth.

But for Jingdong, Jingdong and Jingdong finance did not support the company.

Liu Qiangdong once said that Jingdong's losses are mainly from Jingdong's finance and Jingdong's two businesses.

Jingdong's coming home needs further extension to the line. It is a very heavy business. R & D, products and logistics systems need a lot of capital investment. The profit time may be a little long.

To some extent, Jingdong has become the only option for developing a company that is very close to money.

However, according to data compiled by Tencent, Jingdong financial losses in the first three quarters of 2015 amounted to 677 million yuan, with a net loss rate of 53.8%.

This loss is not accompanied by the expansion and layout of Jingdong.

In fact, in the quarterly earnings report, Jingdong also mentioned that the new business represented by O2O, finance and so on has reached a loss of 600 million in the first quarter.

From this point of view, the earlier issuance may further risk the Jingdong.

The purpose of the earlier issue of bonds is to lay the future, but this is somewhat like drinking poison to quench thirst.

Jingdong is still in a state of loss at the moment, and it still takes a long time for the home and financial businesses to make profits.

Here is not only a question, but what does a long-term deficit enterprise rely on? What debt is still due? For Jingdong, it still relies on strong cash flow growth, but now it has declined for two consecutive quarters, which is probably not good news for Jingdong.