JD.com & Tencent Music Beat Earnings Expectations
6 Min. Read Time
JD.com Q1 Earnings Overview
JD.com announced Q1 2026 financial results after the Hong Kong close that beat analyst expectations. JD's foray into the restaurant delivery business, challenging the dominance of Meituan, kicked off a subsidy competition that wrecked the bottom line of both companies and, to a lesser degree, Alibaba, due to its Ele.me business, though Alibaba's AI capex is a factor, as well.
JD Food Delivery, part of the New Businesses segment along with foreign E-Commerce efforts, reported revenue up 9.1% to RMB 6.28 billion ($910 million). Net cash provided by operating activities turned positive RMB 555 million, up from last year’s loss of RMB 18.26 billion! Clearly, the foot is coming off the subsidies, i.e. cash burn, gas pedal.
During the call, the company highlighted that “JD Retail reported income from operations of RMB 15.0 billion ($2.2 billion) for the first quarter of 2026, compared to RMB 12.8 billion for the first quarter of 2025. The operating margin of JD Retail was 5.6% for the first quarter of 2026, compared to 4.9% for the first quarter of 2025.
- Revenue increased by 4.9% to RMB 315.7 ($45.8B) from RMB 301B, versus expectations of RMB 311B
- Adjusted Net Income declined to RMB 7.4B ($1.1b) from RMB 12.8B, versus expectations of RMB 5.3B
- Adjusted EPS declined to RMB 5.12 ($0.74) from RMB 8.41, versus expectations of RMB 3.57
- The company repurchased a total of approximately 44.5 million Class A ordinary shares (equivalent to 22.3 million American depositary shares (ADSs), which represents 1.6% of shares outstanding for a total of $631 million during Q1
Tencent Music Q1 Earnings Overview
Tencent Music Entertainment (TME), the Spotify of China, reported Q1 2026 financial results after the Hong Kong close that beat analyst expectations. The company reported that “Revenues from membership services were RMB4.57 billion ($662 million), representing 6.6% year-over-year growth, compared with RMB 4.28 billion in the same period of 2025.” Subscription is a key factor for TME that investors will focus on. The company paid a dividend of $0.12 in April, though I don’t see anything on that.
- Revenue increased by +7.3% to RMB 7.9B ($1.15B) from RMB 7.34B, versus expectations of RMB 7.89B
- Adjusted Net Income increased by +7% to RMB 2.27B ($330mm) from RMB 2.12B, versus expectations of RMB 2.24B
- Adjusted EPS increased to RMB 1.46 ($0.21) from RMB 1.37, versus expectations of RMB 1.39
Key News
Asian equities were largely lower on rising oil prices and a stronger US dollar amid ongoing Middle East tensions, as South Korea declined on comments about an AI wealth tax. Meanwhile, India was off nearly 2%, though I do not see a rationale.
The renminbi bucked the regional currency weakness, appreciating to a new 52-week high versus the US dollar.
President Trump’s China visit includes CEO include Boeing, Tesla, Cargill, GE Aerospace, Illumina, Micron, Qualcomm, Visa, Mastercard, Blackstone, BlackRock, and Goldman Sachs. It was funny to see the negative reaction to the possibility of a larger and better-than-expected Trump/Xi deal.
Hong Kong faded on light volumes as investors wait for tomorrow’s financial results from Tencent, which fell -1.55% and was Hong Kong’s most heavily traded stock by value, and Alibaba, which fell by -0.45%, despite a table-pounding reiteration by a sell-side analyst.
The State Administration of Market Regulation (SAMR) approved Tencent's stake in Himalayan Company, an online audio and music platform, which Mainland media took as a sign of the government’s easing of regulations on “platform” companies, i.e., internet companies. Just yesterday, the government-run Global Times published a front-page article about Alibaba’s AI efforts.
Kuaishou gained +1.94% following yesterday’s report of spinning off its Kling AI video platform via a Hong Kong IPO.
Hong Kong had a defensive feel overnight, as banks, oil & gas, and non-ferrous metals stocks underperformed, while growth stocks were largely lower on light volumes. Similar to Hong Kong, breadth was off, though Mainland China saw strong volumes amid reports of inflows into locally-listed ETFs.
Semiconductors and technology hardware stocks were mixed, led by the most heavily traded by value in Mainland China, which were Innolight, which gained +8.28%, Eoptolink, which gained +5.11%, and Cambricon, which gained +6.49%.
The STAR Board outperformed based on semiconductor stock strength, though CATL fell by -3.33%, weighing on Shenzhen. It was a very quiet night, though indices stayed above key levels.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.2% |
| Hang Seng Tech | HSTECH Index | -0.7% |
| Hong Kong Turnover | HKTurn Index | -9% |
| Hong Kong Short Sale Turnover | HKSST Index | -19.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 100.898722860792 |
| China (Shanghai) | SHCOMP Index | -0.2% |
| China (Shenzhen) | SZCOMP Index | -0.6% |
| China (STAR Board) | Star50 Index | 0.4% |
| Mainland Turnover | .chturn Index | -8.5% |
| Japan | NKY Index | 0.5% |
| India | SENSEX Index | -1.9% |
| Indonesia | JCI Index | -0.7% |
| Malaysia | FBMKLCI Index | 0.3% |
| Pakistan | KSE100 Index | -1% |
| Philippines | PCOMP Index | -0.2% |
| South Korea | KOSPI Index | -2.3% |
| Taiwan | TWSE Index | 0.3% |
| Thailand | SET Index | -0.4% |
| Singapore | STI Index | 0.1% |
| Australia | AS51 Index | -0.4% |
| Vietnam | VNINDEX Index | 0.3% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 101 | 160 |
| Advancing Stocks | 172 | 1177 |
| Declining Stocks | 333 | 3892 |
| Outperforming Factors | Large Caps, EPS Revision | |
| Underperforming Factors | Growth, Liquidity, Buyback | Liquidity, Quality, Growth |
| Top Sectors | Energy, Materials, Utilities | Utilities, Tech |
| Bottom Sectors | Tech, Communication, Industrials | Communication, Industrials, Discretionary |
| Top Subsectors | Paper/Packaging, Petroleum/Petrochemical, Household Appliances | Land Transport, Power, Electronic Components |
| Bottom Subsectors | Consumer Durables/Apparel, Machinery, Household/Personal Products | Construction Machinery, Internet, Leisure Products |
| Southbound Connect Buys | Alibaba, CIG, Deepexi Tech (Tiny) | N/A |
| Southbound Connect Sells | Hua Hong Semi, Kuaishou, Tencent (Moderate), SMIC, YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.3 |
| Communication Services | 11 | -1.1 |
| Consumer Discretionary | 28 | -0.45 |
| Consumer Staples | 12 | -0.17 |
| Energy | 6 | 1.72 |
| Financials | 25 | 0.36 |
| Health Care | 16 | 0.11 |
| Industrials | 19 | -0.81 |
| Information Technology | 15 | -1.12 |
| Materials | 14 | 1.07 |
| Real Estate | 1 | -0.44 |
| Utilities | 6 | 0.9 |
| Mainland China Listed | 11 | -0.25 |
| Communication Services | 11 | -1.99 |
| Consumer Discretionary | 26 | -1.31 |
| Consumer Staples | 18 | -1.11 |
| Energy | 11 | -0.48 |
| Financials | 64 | -0.2 |
| Health Care | 29 | -0.05 |
| Industrials | 60 | -1.36 |
| Information Technology | 113 | 0.65 |
| Materials | 58 | -0.23 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.6 |
| Alibaba HK | 9988 HK Equity | -0.4 |
| JD.com HK | 9618 HK Equity | -0.1 |
| NetEase HK | 9999 HK Equity | 1.8 |
| Yum China HK | 9987 HK Equity | -0.1 |
| Baozun HK | 9991 HK Equity | 1 |
| Baidu HK | 9888 HK Equity | -0.9 |
| Autohome HK | 2518 HK Equity | -0.3 |
| Bilibili HK | 9626 HK Equity | -1.2 |
| Trip.com HK | 9961 HK Equity | 0.5 |
| EDU HK | 9901 HK Equity | -0.6 |
| Xpeng HK | 9868 HK Equity | 0.2 |
| Weibo HK | 9898 HK Equity | -0.9 |
| Li Auto HK | 2015 HK Equity | -0.6 |
| Nio Auto HK | 9866 HK Equity | 1.4 |
| Zhihu HK | 2390 HK Equity | 0.6 |
| KE HK | 2423 HK Equity | 0.4 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.5 |
| Meituan HK | 3690 HK Equity | -0.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1.6 |
| KUAISHOU TECHNOLOGY | 1.9 |
| ALIBABA GROUP HOLDING LTD | -0.4 |
| SEMICONDUCTOR MANUFACTURI-H | 0 |
| YANGTZE OPTICAL FIBRE AND-H | 4.5 |
| HUA HONG SEMICONDUCTOR LTD-H | -3.4 |
| POP MART INTERNATIONAL GROUP | -2.7 |
| XIAOMI CORP-CLASS B | -0.8 |
| ZIJIN MINING GROUP CO LTD-H | 1.7 |
| DEEPEXI TECHNOLOGY CO LTD-H | 12.3 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 8.3 |
| EOPTOLINK TECHNOLOGY INC L-A | 5.1 |
| CAMBRICON TECHNOLOGIES-A | 6.5 |
| MONTAGE TECHNOLOGY CO LTD-A | -3.4 |
| SUZHOU DONGSHAN PRECISION-A | 0.5 |
| JIANGSU ZHONGTIAN TECHNOLO-A | 0.5 |
| VICTORY GIANT TECHNOLOGY -A | -0.7 |
| SUZHOU TFC OPTICAL COMMUNI-A | 3.2 |
| ACCELINK TECHNOLOGIES CO -A | 1.4 |
| CHINA GREATWALL TECHNOLOGY-A | 8.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.79 versus 6.80 yesterday
- CNY per EUR 7.97 versus 7.99 yesterday
- Yield on 10-Year Government Bond 1.76% versus 1.76% yesterday
- Yield on 10-Year China Development Bank Bond 1.83% versus 1.84% yesterday
- Copper Price +2.31%
- Steel Price -0.34%
