JD.com has arrange an progressive retail division to deal with its 7Fresh food market.
Bloomberg | Bloomberg |
Shares of a Chinese online retailer listed in Hong Kong JD.com rose 1.2% on Wednesday, outpacing the decline on Hang Seng Index after the corporate announced a $5 billion share buyback late Tuesday.
The company’s U.S.-listed shares rose 2.24 percent on Tuesday following the announcement. Both JD.com’s Hong Kong and U.S. shares have fallen about 20 percent because the starting of the yr.
In comparison, Hong Kong’s leading index, the Hang Seng, lost around 0.82 percent on Wednesday, but has risen by around 4 percent thus far this yr.
This announcement is JD.com’s second share buyback this yr, following a $3 billion share buyback announced in March.
Reacting to the move, Chelsey Tam, senior equity analyst at Morningstar, said the choice to announce the share buyback was “not surprising.” She explained: “This is a common phenomenon in China when stock prices and growth are low.”
Tam also referred to VIP Shopone other Chinese e-commerce player that increased its own share buyback program last week.
The Chinese e-commerce sector is affected by the weak domestic economy.
Earlier this month, Alibaba’s second-quarter results fell in need of expectations on each revenue and profit. On Monday, Pinduoduo, the owner of Temu, suffered its worst trading session ever after its second-quarter results fell in need of expectations on each revenue and earnings per share.
Back in February, Alibaba announced a $25 billion share buyback after missing its revenue targets for the fourth quarter of 2023.
