PDD Reddit Mentions | ChartExchange

**TL;DR:** JD trades at 0.22x sales and 3.8x EV/EBITDA. $22B in net cash = 54% of market cap. Core retail generated $7.4B in operating profit in FY2025. The entire earnings collapse has one identifiable cause — a food delivery price war that management has guided will normalize in 2026. At $28.32, the downside is capped and the upside over 3 years is 140–280%+ depending on scenario. This is the most asymmetric large-cap setup I've seen in years.
# The setup
At \~$28/ADS, the market is valuing JD's operating business at roughly $19B enterprise value.
That business did **$187B in revenue** and **$7.4B in core retail operating profit** in FY2025. Growing 13% YoY. With expanding margins.
Strip out $22B in net cash and you're paying under 2.5x operating income for a company with 700 million active customers and the largest self-owned logistics network in China. That is not a typo.
# So what's wrong with it?
One thing: **food delivery**.
In February 2025, JD launched JD Takeaway — a direct assault on Meituan and Ele.me. Zero merchant commissions. Full employment for riders (health insurance, housing funds — a first in China). All-out price war.
The cost in FY2025: approximately **$4.7B in losses** from the New Businesses segment. That single line item is responsible for nearly the entire collapse in consolidated earnings — from $4.26 non-GAAP EPS in FY2024 to $2.75 in FY2025. Q4 2025 was JD's first quarterly GAAP net loss in over 3 years.
The market read this as structural impairment. It is not. It is a **deliberate, time-limited investment cycle.**
# Why the market is wrong
Management has been unambiguous: food delivery investment will **decrease materially in 2026** with focus on unit economics. JD Takeaway already has \~5% market share with narrowing sequential losses every quarter since launch.
The historical precedent is Meituan itself — which went through exactly the same investment cycle before becoming the dominant player with industry-leading margins. JD is following the same playbook.
Meanwhile, underneath the food delivery drag:
* JD Retail operating margin: **5.9% in Q3 2025** (exit rate into FY2026 is well above the 4.6% full-year average)
* General merchandise growing **19% YoY** in Q3 2025 at higher margins
* AI handling 4.2 billion customer inquiries during 11.11 alone — structural cost reduction, not a press release
* JD Logistics (HKEX: 2618) growing **24% YoY** and increasingly monetizing third-party volume
* JD Industrials IPO'd December 2025 on HKEX — more hidden value crystallized
# The EPS recovery math
|Year|Non-GAAP EPS|Food Delivery Drag|
|:-|:-|:-|
||
|FY2024A|$4.26|\-$0.7B|
|FY2025A|**$2.75 (trough)**|**-$4.7B**|
|FY2026E|$4.80|\-$2.5B|
|FY2027E|$7.00|\-$0.8B|
|FY2028E|$9.00|\~$0|
From trough to normalized: **3.3x EPS recovery**, driven by three knowable, finite processes. Not speculation. Not a turnaround story. Just food delivery losses going away and retail margins compounding.
# Valuation vs. peers
||JD|Alibaba|Coupang|Amazon|
|:-|:-|:-|:-|:-|
||
|P/S|**0.22x**|1.1x|1.5x|3.5x|
|EV/EBITDA|**3.8x**|9.2x|22x|23x|
|Fwd P/E|**5.9x**|10.5x|38x|35x|
|Net Cash / Mkt Cap|**54%**|\~20%|neg.|\~10%|
Coupang is the closest structural comparable — owned logistics, 1P model, same-day delivery. JD trades at **one-seventh** of Coupang's EV/EBITDA.
# The balance sheet floor
$22B in net cash. The $10.5B drawdown from end-2024 reflects food delivery investment (\~$4.7B), $3B in buybacks, and $1.4B in dividends. As losses normalize, net cash recovers to an estimated $28B by FY2028.
JD is currently returning **\~10%+ of market cap annually** through buybacks + dividends. $2B+ buyback authorization through August 2027, being fully utilized at these prices. That's management buying back the business at a 75%+ discount to what it should rationally trade at.
# Price targets
|Scenario|Probability|3-Year PT|IRR|
|:-|:-|:-|:-|
||
|Bear|15%|$35|\~13%|
|**Base**|**60%**|**$68**|**\~42–44%**|
|Bull|25%|$108|\~75%+|
|**Prob.-Weighted**||**\~$72**|**\~42–44%**|
**Bear case at $35 still gives you a 24% total return.** That's the floor. The setup is genuinely asymmetric.
The 12-month catalyst: **Q1 2026 results in May 2026** — first quarter showing a measurable sequential decline in food delivery investment. That's the moment the market reprices the normalized earnings trajectory.
# Yes, the risks are real
* **ADR delisting** (\~15–20% probability over 3 years). Mitigant: JD has a primary listing on HKEX (9618) with institutional liquidity. Not an OTC rescue — a real exchange. This differentiates JD from names like PDD with no HK listing.
* **VIE structure** (<5% probability but severe). Standard for Chinese tech.
* **China macro.** JD is 97% domestic consumption. Not tariff-exposed directly.
* **Food delivery war extends.** $22B net cash absorbs it. But each extra year of losses delays the thesis.
The geopolitical discount is real. It's also already embedded in a 0.22x P/S multiple. You're not ignoring the risk — you're deciding whether it's already over-priced in.
# HKEX note
For anyone serious about this: consider holding HKEX 9618 directly rather than the Nasdaq ADR. The fundamental value is identical. The tail risk from a forced delisting is materially lower. Most brokers support HK-listed equities.
*I've been doing deeper research on this and a few other special situations. If you want the full write-up — financial model, segment breakdown, catalysts timeline, and the full geopolitical risk framework — I put it all together over at* ***The Catalyst Capital*** [https://open.substack.com/pub/thecatalystcapital/p/jdcom-the-most-mispriced-large-cap?r=3o8jb6&utm\_campaign=post&utm\_medium=web](https://open.substack.com/pub/thecatalystcapital/p/jdcom-the-most-mispriced-large-cap?r=3o8jb6&utm_campaign=post&utm_medium=web) *. Free to read.*
*As always — not financial advice, do your own research, positions can go against you.*
**Positions:** Long JD via HKEX 9618.
*What's your take? Anyone else been watching this setup?*

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