Citi Research was surprised by JD.com, Inc. (JD.US) 's convertible note issuance, believing that it reflects the Company's continued accelerated pace for share buybacks in the near term, Citi Research issued a research report saying.
Management is confident on its business growth prospects, and might think that its current share price is attractive. The Company repurchased 49.2 million ADS for US$1.3 billion from January to May, with outstanding amount of US$2.3 billion under the existing buyback plan.
Citi Research believed that JD's one-stop shopping mechanism is well-positioned. Together with the 618 shopping festival, Citi Research believed there is room for upside to its 2Q24 and full-year growth forecasts.
Potential hedging activities related to the proposed issuance of convertible notes will provide a buying opportunity if it causes any share price correction. Citi Research kept rating at Buy, with a target price of US$43.
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