JD.com (JD US & 9618 HK): 3Q26 preview: Earnings recovery hinges on spending discipline

Our Overweight thesis on JD rests on an earnings recovery, not a sharp sales rebound. The 3Q26 outlook remains consistent with that framework, although a slower demand recovery makes spending discipline more important. The key investor question on JD is whether operating improvements can support sustained profit growth or will be absorbed by another investment cycle. We estimate JD retail revenue growth of 3% yoy in 3Q26, improving qoq: Electronics & home appliances should narrow to roughly -1% yoy (from -11.8% in 2Q26) as the high 2025 trade-in base rolls off. General merchandise should accelerate to high single digits (from +5.6%), and marketplace commission and advertising should sustain high-single-digit growth. Food delivery losses narrowed more than 50% yoy in 2Q26, and we expect a further qoq reduction in 3Q26, with a credible path to breakeven around 2028 driven mainly by take rate normalization. We revise down our 2026/27 revenue forecast by 1%/4%, mainly reflecting a slower e