Jingdong (09618) traded higher in early trading, with a temporary rise of over 2.3% at the time of submission, and a 1.08% increase at the time of submission, reaching HKD 102.8, with a turnover of HKD 0.324 billion.
According to the company's announcement, the board of directors has approved a new share repurchase plan, which will take effect from September 2024. Under the new share repurchase plan, the company can repurchase shares (including American depositary shares) worth no more than 5 billion USD within the next 36 months ending August 2027.
Citigroup believes that JD.com's newly announced $5 billion share buyback plan sends a stronger signal, indicating that the management cares about shareholder returns and considers the current stock price to be undervalued. Citigroup holds a positive view on this, believing that the plan is earlier than expected. Citigroup analysts, including Alicia Yap, stated in the report that, after announcing in March that the buyback plan would not exceed $3 billion in shares, JD.com has taken action in just five months. The company's profitability has improved, and the government's introduction of the home appliance trade-in subsidy and the new buyback plan are expected to act as short-term catalysts for the stock price. The buy rating for JD.com is reiterated, with an ADR target price of $41.