We maintain our M/P recommendation on JD post its weak 2Q25 results; topline growth was a strong beat, but EBITDA margin materially narrowed due to hefty spending for its food delivery business; FOCF also contracted and gross debt metrics weakened, but JD still retained a strong net cash position. JD trades largely in-line to Asia A- corp which we view as fair; while we expect JD’s gross debt metrics to temporarily weaken over 2H25 due to its hefty investments into food delivery, we do not expect downgrade risk for the credit given the strong performance of its core retail and logistic segments, and we expect JD to still maintain a strong net cash position over the 12 months. Amongst the A-rated China tech credits, we continue to prefer Alibaba and Tencent.

While Chinese regulators have adopted a friendlier stance towards tech companies, any regulatory clampdowns may still adversely affect the business of JD (e.g. antitrust rules, data security & personal data protection laws).

Intensifying competition amongst Chinese eCommerce platforms with the entrance of new live-streaming/short-form video platforms and group buying discount platforms may result in slower topline growth and weaker EBITDA margin for JD as its increase its user/merchant incentives and promotional activities to defend its market share.

There are regulatory risks involving the use of variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers (ICPs). Specifically, VIE transactions involving “change in control” will be subject to antitrust regulatory processes.