Citi analyst Alicia Yap lowered the firm’s price target on JD.com (JD) to $51 from $56 and keeps a Buy rating on the shares. Following order volume doubling from 5M to 10M in 10 days, it becomes clear that JD is “serious in food delivery” while the company’s and Meituan’s share prices have traded down, reflecting investor concern on the profitability impact, the analyst tells investors in a research note. The firm says that while there remains uncertainty on the sustainability of volume momentum, given JD’s strength in supply chain and logistics, food delivery is a natural expansion for the company given the higher transaction frequency, cross-sell opportunity and effective new user acquisition channel.
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