JD.com Announces US$5.0 Billion New Share Repurchase Program

Rhea-AI Summary

JD.com, a leading supply chain-based technology and service provider, has announced a new share repurchase program approved by its board of directors. The program, effective from September 2024, allows the company to repurchase up to US$5.0 billion worth of its shares (including ADSs) over the next 36 months through the end of August 2027.

The repurchases may be made on the open market, through privately negotiated transactions, block trades, or other legal means, subject to market conditions and applicable regulations. The board will review the program periodically and may adjust its terms and size. This move demonstrates JD.com's confidence in its long-term growth prospects and commitment to enhancing shareholder value.

Positive

• Authorization of a substantial US$5.0 billion share repurchase program
• Flexibility in repurchase methods, allowing for optimal execution
• Long-term commitment with a 36-month program duration
• Potential to enhance shareholder value through reduced share count

Negative

• Significant cash outlay may impact available funds for other investments or operations
• Potential opportunity cost of not using funds for business expansion or acquisitions

Insights

Financial Analyst

JD.com's announcement of a $5 billion share repurchase program is a significant move that signals confidence in the company's financial health and future prospects. This substantial buyback, representing about 10% of JD.com's current market capitalization, could potentially boost earnings per share and stock price. The 36-month duration provides flexibility, allowing JD.com to strategically time its repurchases based on market conditions. However, investors should note that this program doesn't guarantee immediate stock price appreciation and may reduce cash available for other investments or operations. It's important to consider JD.com's cash flow, growth strategy and competitive position in China's e-commerce landscape when evaluating the long-term impact of this buyback.

Market Research Analyst

This share repurchase program reflects JD.com's strategic response to current market dynamics in China's tech sector. With regulatory pressures and economic headwinds affecting investor sentiment, JD.com is likely aiming to bolster shareholder confidence and demonstrate its financial strength. The $5 billion commitment over three years is substantial, potentially signaling that management views the stock as undervalued. However, it's important to consider the broader context:

• How does this compare to competitors' actions?
• What are the implications for JD.com's growth strategy in a slowing Chinese economy?
• How might this affect JD.com's ability to invest in new technologies or expand into new markets?

Investors should weigh these factors alongside the potential benefits of the buyback program.

Legal Expert

The structure of JD.com's share repurchase program adheres to standard legal and regulatory practices. Key points to note:

• The program's flexibility in execution methods (open market, private transactions, block trades) provides legal maneuverability.
• The Board's periodic review clause ensures ongoing compliance and adaptability to changing market conditions.
• The program's adherence to 'applicable rules and regulations' is crucial, especially given the complex regulatory environment for Chinese companies listed in the US and Hong Kong.

Investors should be aware that while this program is legally sound, it doesn't protect against potential future regulatory challenges that Chinese tech companies might face in international markets. The dual listing on NASDAQ and HKEX adds a layer of complexity to regulatory compliance.

BEIJING, Aug. 27, 2024 (GLOBE NEWSWIRE) -- JD.com, Inc. (“JD.com” or the “Company”) (NASDAQ: JD and HKEX: 9618 (HKD counter) and 89618 (RMB counter)), a leading supply chain-based technology and service provider, today announced that its board of directors (the “Board”) has approved a new share repurchase program (the “New Share Repurchase Program”), effective from September 2024. Pursuant to the New Share Repurchase Program, the Company may repurchase up to US$5.0 billion worth of its shares (including ADSs) over the next 36 months through the end of August 2027.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Board will review the share repurchase program periodically, and may authorize adjustment of its terms and size.

About JD.com        

JD.com is a leading supply chain-based technology and service provider. The Company's cutting-edge retail infrastructure seeks to enable consumers to buy whatever they want, whenever and wherever they want it. The Company has opened its technology and infrastructure to partners, brands and other sectors, as part of its Retail as a Service offering to help drive productivity and innovation across a range of industries.

For investor and media inquiries, please contact:

Investor Relations
Sean Zhang
+86 (10) 8912-6804
IR@JD.com

Media Relations
+86 (10) 8911-6155
Press@JD.com

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. JD.com may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in announcements made on the website of the Stock Exchange of Hong Kong Limited, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about JD.com’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: JD.com’s growth strategies; its future business development, results of operations and financial condition; its ability to attract and retain new customers and to increase revenues generated from repeat customers; its expectations regarding demand for and market acceptance of its products and services; trends and competition in China’s e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of the Chinese e-commerce market; laws, regulations and governmental policies relating to the industries in which JD.com or its business partners operate; potential changes in laws, regulations and governmental policies or changes in the interpretation and implementation of laws, regulations and governmental policies that could adversely affect the industries in which JD.com or its business partners operate, including, among others, initiatives to enhance supervision of companies listed on an overseas exchange and tighten scrutiny over data privacy and data security; risks associated with JD.com’s acquisitions, investments and alliances, including fluctuation in the market value of JD.com’s investment portfolio; natural disasters and geopolitical events; change in tax rates and financial risks; intensity of competition; and general market and economic conditions in China and globally. Further information regarding these and other risks is included in JD.com’s filings with the SEC and the announcements on the website of the Stock Exchange of Hong Kong Limited. All information provided herein is as of the date of this announcement, and JD.com undertakes no obligation to update any forward-looking statement, except as required under applicable law.

FAQ

What is the size of JD.com's new share repurchase program?

JD.com's new share repurchase program allows for the repurchase of up to US$5.0 billion worth of its shares, including ADSs.

When does JD's new share repurchase program start and end?

The program is effective from September 2024 and will run for 36 months through the end of August 2027.

How will JD.com execute its share repurchases?

JD.com may repurchase shares on the open market, through privately negotiated transactions, block trades, or other legally permissible means, depending on market conditions and applicable regulations.

Can JD.com's board adjust the share repurchase program?

Yes, JD.com's board will review the program periodically and may authorize adjustments to its terms and size.