京東 (JD) 2022 Q1 法說會逐字稿

Hello, and thank you for standing by for JD.com's First Quarter 2022 Earnings Conference Call. (Operator Instructions) Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Mr. Sean Zhang, Director of Investor Relations. Please go ahead.

您好，感謝您參與京東 2022 年第一季度收益電話會議。 （操作員說明）今天的會議正在錄製中。如果您有任何異議，您可以在此時斷開連接。我現在想將會議轉交給今天會議的主持人，投資者關係總監 Sean Zhang 先生。請繼續。

Thank you, Michelle. Good evening, and good morning, everyone. Welcome to our first quarter 2022 earnings conference call. Joining us on the call today are Mr. Lei Xu, our CEO; and Ms. Sandy Xu, our CFO. For today's call, they will kick off with opening remarks, and Sandy will discuss the financial highlights. After that, we'll open the call to questions from analysts.

謝謝你，米歇爾。大家晚上好，早上好。歡迎參加我們的 2022 年第一季度收益電話會議。今天加入我們電話會議的是我們的首席執行官徐磊先生；和我們的首席財務官 Sandy Xu 女士。對於今天的電話會議，他們將以開幕詞開始，桑迪將討論財務亮點。在那之後，我們將打開分析師提問的電話。

Before we continue, let me remind you, today's call will include forward-looking statements, and please refer to our latest safe harbor statement in the earnings press release on our IR website, which applies to this call. Also during this call, we'll discuss certain non-GAAP financial measures. Please also refer to our earnings press release, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures. Finally, please note, unless otherwise stated, all figures mentioned in this call are in RMB.

在繼續之前，讓我提醒您，今天的電話會議將包括前瞻性陳述，請參閱我們 IR 網站收益新聞稿中的最新安全港聲明，該聲明適用於本次電話會議。同樣在本次電話會議中，我們將討論某些非公認會計原則的財務措施。另請參閱我們的收益新聞稿，其中包含非公認會計原則措施與可比公認會計原則措施的對賬。最後，請注意，除非另有說明，本次電話會議中提及的所有數字均以人民幣為單位。

And now, I would like to turn the call over to Mr. Lei Xu, our CEO. (foreign language).

現在，我想把電話轉給我們的首席執行官徐磊先生。 （外語）。

[Interpreted] Hello, everyone. This is Xu Lei. Thank you for joining JD.com's 2022 first quarter earnings call.

[翻譯]大家好。這是徐磊。感謝您參加京東 2022 年第一季度財報電話會議。

Since the start of 2022, we have seen many challenges arise in our external environment, including the COVID resurgence, supply chain disruptions, and soft consumer sentiment, among others. As a supply chain based technology and service provider, JD is strongly committed to social responsibility of its leadership. And thanks to the supply chain that we (inaudible), we are able to take concrete action to help ensure supplies of daily necessities and to mitigate the impact of the pandemic on society and economy.

自 2022 年初以來，我們看到外部環境中出現了許多挑戰，包括 COVID 死灰復燃、供應鏈中斷和消費者信心疲軟等。作為基於供應鏈的技術和服務提供商，京東堅定地致力於其領導層的社會責任。並且由於我們（聽不清）的供應鏈，我們能夠採取具體行動來幫助確保日常必需品的供應，並減輕大流行對社會和經濟的影響。

JD's solid business foundation positions us to navigate the current challenges, which we believe are short-term in nature.

京東堅實的業務基礎使我們能夠應對當前的挑戰，我們認為這些挑戰本質上是短期的。

In the first quarter, we once again delivered high-quality results, thanks to our supply chain capabilities and resilient business model. Our total revenues saw a solid year-on-year growth of 18%. This reflects increasing trust we have gained from our consumers and business partners. It also demonstrates that we have better control across our entire business process and supply chain. Therefore, we projected greater visibility than the overall sector during times of change. Moreover, we also recorded steady profitability in this quarter, driven by better operating efficiency and more focused business strategies.

憑藉我們的供應鏈能力和彈性的商業模式，我們在第一季度再次取得了高質量的業績。我們的總收入同比穩健增長 18%。這反映了我們從消費者和業務合作夥伴那裡獲得的越來越多的信任。它還表明我們可以更好地控制整個業務流程和供應鏈。因此，我們預計在變革時期比整個行業具有更高的知名度。此外，在更好的運營效率和更專注的業務戰略的推動下，我們在本季度也錄得穩定的盈利能力。

In terms of COVID, JD has always walked at frontline and spared no efforts. Once coronavirus first broke out in January 2020, we mobilized quickly to establish a special line for COVID to ensure transport capacity, providing essentials to affected regions, donating protection and medical materials that were in urgent need, and launched a set of supportive measures for our merchants and suppliers.

在疫情方面，京東一直走在前線，不遺餘力。 2020 年 1 月新冠病毒首次爆發後，我們迅速動員起來，建立了新冠肺炎專線，以確保運輸能力，為受災地區提供生活必需品，捐贈急需的防護和醫療物資，並推出了一系列支持措施。商家和供應商。

This time, facing the more transmissible Omicron variant, JD once again fully leveraged our supply chain and mobilized all of the group's forces to fight the epidemic and ensure supply of daily necessities across China. Taking Shanghai as an example, JD Retail, Logistics, Health, Dada, and other business segments have sourced goods, allocated transport and logistics resources, and delivered tens of thousands of home supplies to Shanghai, including staple foods and baby care products and more. We have also recruited and deployed over 4,000 (inaudible) employees to fully support operations and deliveries in Shanghai.

這一次，面對傳染性更強的Omicron變種，京東再次充分利用我們的供應鏈，調動全集團力量抗擊疫情，保障全國生活必需品供應。以上海為例，京東零售、物流、大健康、達達等業務板塊已經採購了貨源，調配了運輸和物流資源，向上海運送了數以萬計的家居用品，包括主食和嬰兒護理用品等。我們還招募和部署了 4,000 多名（聽不清）員工，全力支持上海的運營和交付。

On behalf of JD, I'd like to express our most crucial gratitude and respect to our employees, especially those working on frontline, for their selfless devotion and dedication. In addition, as a new type of real economy enterprise, JD has also introduced a series of new and existent initiatives for merchants and SMBs that have suffered from the epidemic in order to lower their operating costs and help them gradually resume function.

我謹代表京東，向我們的員工，尤其是在一線工作的員工，向他們無私的奉獻和奉獻表示最深切的感謝和敬意。此外，作為新型實體經濟企業，京東還為受疫情影響的商家和中小企業推出了一系列新的和現有的舉措，以降低其運營成本，幫助其逐步恢復運作。

JD Supermarket also works together with JDDJ to help (inaudible) to Shanghai to resume online operations and provide delivery manpower in a timely manner by leveraging Dada (inaudible) solution.

京東超市還與京東合作，借助達達（聽不清）的解決方案，幫助（聽不清）上海恢復在線運營並及時提供送貨人力。

We hope to join hands with all of our partners to tackle these challenges and difficulties and together contribute to stabilize the people's businesses and the economy.

我們希望與所有合作夥伴攜手應對這些挑戰和困難，共同為穩定人民企業和經濟做出貢獻。

In terms of challenges, JD always looks to harness our advantages and (inaudible) solutions that move the needle. Certainly, we have made proactive adjustments to our user strategy. With a steady expansion of our user scale, we have been increasingly focused on improving user quality. In Q1, our annual active users reached 580 million. And more importantly, user purchasing frequency and ARPU still accelerating growth, both of which were at or near record highs. This merely reflects the increasing recognition and trust that users are placing in JD.

在挑戰方面，京東總是希望利用我們的優勢和（聽不清）解決方案來推動工作。當然，我們已經對我們的用戶策略進行了積極的調整。隨著我們用戶規模的穩步擴大，我們越來越注重提高用戶質量。第一季度，我們的年活躍用戶達到了 5.8 億。更重要的是，用戶購買頻率和ARPU仍在加速增長，均處於或接近歷史高位。這僅僅反映了用戶對京東的日益認可和信任。

The increasing user (inaudible) in having experienced high user growth for the top (inaudible) and China's Internet industry is entering a more mature development stage going forward as we optimize and expand our omnichannel ecosystem and we continue to expand and meet the diversity of our users creating long-term user value.

隨著我們優化和擴展我們的全渠道生態系統，我們不斷擴大和滿足我們的多樣性用戶創造長期用戶價值。

We're also proactively optimizing and adjusting the investment pace in our new businesses based on our analysis of the macro and industrial landscape. In Q1, before the shift in focus to regions where we saw improving scale and efficiency as well as better synergies with our core Beijing business. In such regions JD's efforts to improve user experience, sales channels, local supply chains as well as digital operations have begun to bear fruit.

我們還根據對宏觀和產業格局的分析，積極優化和調整新業務的投資節奏。在第一季度，在將重點轉移到我們看到規模和效率提高以及與我們的核心北京業務更好的協同作用的地區之前。在這些地區，京東在提升用戶體驗、銷售渠道、本地供應鏈以及數字化運營方面的努力已經初見成效。

We are proud that JD's supply chain capabilities and the business model have proven themselves valuable in the fight against the epidemic. For example, this Beijing's COVID resurgence starting at the end of April (inaudible) our community group purchase business has seen average daily GMV and new users nearly doubled, with better operating efficiency and UE. In the future, we will continue to optimize overall operating efficiency and drive a sustainable high-quality growth with healthy cash flow and profitability.

我們很自豪京東的供應鏈能力和商業模式在抗擊疫情中證明了自己的價值。例如，從 4 月底開始的北京 COVID 復甦（聽不清），我們社區團購業務的日均 GMV 和新用戶幾乎翻了一番，運營效率和 UE 更好。未來，我們將繼續優化整體運營效率，以健康的現金流和盈利能力推動可持續的高質量增長。

The current challenges also provided JD with upside opportunities. Firstly, our efforts and commitment to social responsibility during COVID enabled us to fulfill society's trust and resulted in stronger reputation and appreciation among our users and business partners. This is highly significant for our long-term development.

當前的挑戰也為京東提供了上行機會。首先，我們在 COVID 期間對社會責任的努力和承諾使我們能夠履行社會的信任，並在我們的用戶和業務合作夥伴中獲得更高的聲譽和讚賞。這對我們的長遠發展意義重大。

Secondly, JD's supply chain as well as our organizing and coordinating capabilities have withstood the pressure of the epidemic and become stronger.

其次，京東的供應鏈以及我們的組織協調能力頂住了疫情的壓力，變得更加強大。

Thirdly, despite increasing uncertainties, we have persistently executed on our long-term strategies and built up four competencies such as our supply chain middle platform, marketplace ecosystem and omnichannel and infrastructure capabilities.

第三，在不確定性增加的情況下，我們堅持執行長期戰略，構建了供應鏈中台、市場生態、全渠道和基礎設施能力等四大能力。

In pursuit of more disciplined investment (inaudible) and higher efficiency, JD also helps business partners to generate higher efficiency and more profitability without external disruption. As such, we have gained recognition from our business partners during the epidemic.

為了追求更規範的投資（聽不清）和更高的效率，京東還幫助業務合作夥伴在不受外部干擾的情況下產生更高的效率和更高的盈利能力。因此，在疫情期間，我們得到了商業夥伴的認可。

We are encouraged to see that merchant participation and engagement has reached a higher level than previous years in the preparation for the upcoming 618 Grand Promotion.

在為即將到來的618大促做準備的過程中，我們很高興看到商家的參與度和參與度比往年更高。

Fourth, the complex epidemic situation and macro economy have caused companies to reexamine their sales and supply chain and procurement systems. Many of them have realized the irreplaceable value of integrated supply chain logistics services. This helped to drive the growth of JD Logistics' revenues from external customers, which accounted for a record high revenue percent of total revenue in Q1, further optimizing JDL's revenue structure.

四是複雜的疫情形勢和宏觀經濟導致企業重新審視自己的銷售供應鍊和採購體系。他們中的許多人已經意識到綜合供應鏈物流服務的不可替代的價值。這有助於推動京東物流來自外部客戶的收入增長，該收入佔第一季度總收入的比例創歷史新高，進一步優化了京東的收入結構。

Moreover, in this quarter, JDL's profitability improved year-on-year, thanks to its optimized operations and better customer structure. JDL also made steady progress in building up its logistics capacity. By the end of Q1, it operated approximately 1,400 warehouses with a total gross floor area over 25 million square meters under management. All of these advantages constitute a solid foundation for JDL to further expand in the industry-leading position and market share over the long term.

此外，在本季度，JDL 的盈利能力同比有所提高，這得益於其優化的運營和更好的客戶結構。 JDL 的物流能力建設也穩步推進。截至一季度末，公司運營倉庫約1400個，管理總建築面積超過2500萬平方米。這些優勢為JDL長期進一步擴大行業領先地位和市場份額奠定了堅實的基礎。

It is evident that the first half of 2022 has brought many challenges and uncertainties. At this time, I believe it is important for companies to have a long-term mindset, remain unwavering on strategic priorities, while maintaining flexibility to adapt to short-term dynamics. JD has experienced many challenges over the past 19 years, but has taken each one as an opportunity for the company's total development.

可見，2022年上半年帶來了諸多挑戰和不確定性。在這個時候，我認為對於公司來說，重要的是要有長遠的心態，在戰略重點上堅定不移，同時保持靈活性以適應短期動態。 19年來，京東經歷了諸多挑戰，但都將每一次挑戰都視為公司整體發展的機遇。

Today, our business logic (inaudible) the supply chain at the core is very clear. Our core competency is highly differentiated, and the resilience of our business model has been proven many times and continues to evolve. As a new type of enterprise that is based on and always serves the real economy, JD today is an ever more solid brand.

今天，我們以供應鍊為核心的業務邏輯（聽不清）非常清晰。我們的核心競爭力是高度差異化的，我們商業模式的彈性已被多次證明並不斷發展。作為立足實體經濟、始終服務實體經濟的新型企業，今天的京東是一個更加堅實的品牌。

Looking ahead, we will continue to build upon our strength. We remain confident and determined to achieve healthy, high-quality, long-term development. Thank you all for your support and trust.

展望未來，我們將繼續發力。我們有信心、有決心實現健康、高質量、長遠的發展。感謝大家的支持和信任。

This concludes my remarks. Now I'd like to give the floor to Sandy.

我的發言到此結束。現在我想請桑迪發言。

Thank you, Lei. Hello, everyone. The latest Omicron outbreak across several regions in China in the past several months has been challenging for everyone. So I would like to echo what Lei said and add my thanks to our colleagues, especially the frontline workers, for their heroic efforts in serving our customers and providing clients with essential supplies during this critical time.

謝謝你，雷。大家好。過去幾個月在中國多個地區發生的最新一次 Omicron 疫情對每個人來說都是一個挑戰。因此，我想附和雷的發言，並感謝我們的同事，特別是一線工作人員，感謝他們在這個關鍵時刻為客戶服務和為客戶提供必需品的英勇努力。

In the first quarter, net revenues reached RMB 240 billion, representing solid 18% year-on-year growth against the high base from last year. In face of various uncertainties, we have been increasingly focusing on serving our users well and this has increased user lifetime value. Our annual active user base reached a total of 580.5 million, while average GMV per user in the last 12 months continued to increase.

一季度淨收入達到人民幣2400億元，在去年高基數的基礎上同比穩健增長18%。面對各種不確定性，我們越來越專注於服務好用戶，這增加了用戶的生命週期價值。我們的年度活躍用戶群總計達到 5.805 億，而過去 12 個月每用戶的平均 GMV 繼續增加。

We are also glad to see improvements in other user quality metrics. For example, average order per user recorded a healthy increase for both new and repeat customers. Our quarterly average DAU has been trending up and growing over 20% year-on-year, reflecting deepening user engagement. Not only did we see a spike in the AU growth during the Spring Festival Gala, effectively promoting JD brand nationwide, we were also inspired to live up to our users' (inaudible) while we saw a notable increase in DAU during COVID resurgence in March and April.

我們也很高興看到其他用戶質量指標的改進。例如，每位用戶的平均訂單記錄了新客戶和回頭客的健康增長。我們的季度平均 DAU 呈上升趨勢，同比增長超過 20%，反映了用戶參與度的加深。我們不僅在春晚期間看到了 AU 增長的飆升，在全國范圍內有效地推廣了京東品牌，我們也受到鼓舞，不辜負我們的用戶（聽不清），而在 3 月 COVID 復甦期間我們看到 DAU 顯著增長和四月。

As our revenue base continued to diversify, we also saw the varying impact of COVID on different segments in Q1. Our net product revenues, which mainly consist of our 1P retail business, grew at a solid 17% year-on-year, demonstrating remarkable resilience, underpinned by our proprietary supply chain infrastructure. Net service revenues continued to grow faster at 26% year-on-year, further diversifying our revenue base. While marketplace and marketing revenues grew at 25% year-on-year, our advertising revenues still grew at nearly 30% year-on-year, in line with the improving ROI of our advertising services.

隨著我們的收入基礎繼續多樣化，我們還看到了 COVID 對第一季度不同細分市場的不同影響。在我們專有的供應鏈基礎設施的支持下，我們的淨產品收入（主要包括我們的 1P 零售業務）同比增長 17%，顯示出非凡的彈性。淨服務收入繼續較快增長，同比增長 26%，進一步豐富了我們的收入基礎。雖然市場和營銷收入同比增長 25%，但我們的廣告收入仍同比增長近 30%，這與我們廣告服務的投資回報率不斷提高一致。

Our marketplace ecosystem continued to optimize as JD Retail continued to grow third-party merchant base by over 20% year-on-year in Q1. This showed that the support and value creation offered by JD are resonating with more and more third-party merchants who are struggling in a time of uncertainty.

隨著京東零售在第一季度的第三方商家基礎同比增長超過 20%，我們的市場生態系統繼續優化。這表明京東提供的支持和價值創造正在引起越來越多在不確定時期掙扎的第三方商家的共鳴。

Logistics and other services revenues grew by 28% year-on-year in Q1 as JDL continued to gain traction from external customers with its uninterrupted supply chain services during the Chinese New Year. I will discuss more about this later.

由於 JDL 在農曆新年期間不間斷的供應鏈服務繼續吸引外部客戶，物流和其他服務收入在第一季度同比增長 28%。稍後我將對此進行更多討論。

Now let's turn to our segment performance. JD Retail continued to deliver a resilient top line growth amidst the latest COVID developments. JD Retail's revenue reached RMB 218 billion in Q1, growing at 17% year-on-year in the quarter. The COVID impact began to appear across the performance of our categories. General merchandise revenues grew 21% year-on-year in Q1, outperforming the electronics and home appliance category growth of 14% year-on-year.

現在讓我們轉向我們的細分市場表現。在最新的 COVID 發展中，京東零售繼續實現有彈性的收入增長。京東零售第一季度營收達到2180億元人民幣，本季度同比增長17%。 COVID 影響開始出現在我們類別的表現中。第一季度日用百貨收入同比增長 21%，優於電子和家電類別 14% 的同比增長。

Since the latest outbreak, customers notably shifted their purchases from nonessential products to essential items. Our supermarket category saw stronger demand with its order volume outgrowing JD Retail in Q1 and in the first half of Q2 and attracted the most number of first-time buyers among all categories.

自最近一次疫情爆發以來，客戶的購買明顯從非必需品轉向了必需品。我們的超市品類需求強勁，其訂單量在第一季度和第二季度上半年超過京東零售，並在所有類別中吸引了最多的首次購買者。

Although our supply chain was heavily disrupted in certain regions, JD Retail and JD Logistics quickly worked together to source and dispatch essential products by utilizing our nationwide warehouse and delivery networks. Once again, this demonstrated our customer-first operating philosophy and our unique business model that enables us to quickly respond to unexpected changes and mobilize our proprietary supply chain capabilities in upholding customer service.

儘管我們的供應鏈在某些地區受到嚴重干擾，但京東零售和京東物流迅速合作，利用我們遍布全國的倉庫和配送網絡，採購和配送必需品。這再次證明了我們以客戶為先的經營理念和獨特的商業模式，使我們能夠快速響應意外變化並調動我們專有的供應鏈能力來維護客戶服務。

We even went beyond our traditional B2C (inaudible) warehouse model to address rising customer needs. Growth of our omnichannel supermarket, including semi-fresh, accelerated in Q1 and as they provided our customers with timely omnichannel fulfillment for grocery and household staples in this critical time window.

我們甚至超越了傳統的 B2C（聽不清）倉庫模式來滿足不斷增長的客戶需求。我們的全渠道超市（包括半生鮮）在第一季度加速增長，因為它們在這個關鍵的時間窗口為我們的客戶提供了及時的全渠道雜貨和家庭主食。

Moving on to JD Retail's profitability. Operating margin was 3.6% this quarter compared with 4% a year ago, primarily due to the marketing expenses in relation to the Spring Festival Gala sponsorship, and to a lesser extent, the softer fulfilled gross margin during the outbreak. That said, we expect to see additional COVID-related costs and expenses, particularly in fulfillment, as well as margin impact caused by product mix shift due to the uneven performance of our different product categories in the short term.

轉向京東零售的盈利能力。本季度營業利潤率為 3.6%，而去年同期為 4%，主要是由於與春晚贊助相關的營銷費用，以及在較小程度上，疫情期間的毛利率較軟。也就是說，我們預計會看到額外的與 COVID 相關的成本和費用，尤其是在履行方面，以及由於我們不同產品類別在短期內表現不均衡而導致的產品組合轉變對利潤率的影響。

JD Logistics, or JDL, maintained a healthy top line growth with an improved revenue mix and continued year-on-year margin improvement. Its Q1 revenues grew 22% year-on-year to RMB 27 billion. Revenues from external customers maintained growth momentum, driven by both the number and ARPU of external customers and once again achieved a record high revenue contribution of 58%.

京東物流 (JDL) 保持了健康的收入增長，收入組合得到改善，利潤率繼續同比提高。其第一季度收入同比增長 22% 至人民幣 270 億元。外部客戶收入保持增長勢頭，在外部客戶數量和ARPU的雙重推動下，收入貢獻再次創下58%的歷史新高。

JDL acted quickly and spared no effort to ensure continued fulfillment of essential products to customers and support our business partners in the COVID affected areas. As a result, it incurred additional costs and expenses due to the operational difficulties and disruptions, particularly asset mobilized workforce and resources across different regions where some of our warehouses and the delivery stations were under lockdown restrictions in certain affected areas.

JDL 迅速採取行動，不遺餘力地確保繼續向客戶提供基本產品，並支持我們在 COVID 影響地區的業務合作夥伴。因此，由於運營困難和中斷，特別是在不同地區調動了資產的勞動力和資源，我們的一些倉庫和交付站在某些受影響地區受到封鎖限制，因此產生了額外的成本和費用。

However, we still found some silver linings. The customer awareness of the unique advantages of JDL's integrated supply chain logistics services has meaningfully increased, boding well for the future customer conversion and total addressable market expansion. And thanks to the growth of external business and continuous improvement in operating efficiency, driven by technology, JDL was able to absorb the additional costs to a certain extent and continued to improve its margin in Q1. This non-GAAP operating loss narrowed by more than 55% from a year ago. JDL has once again improved the design and efficiency of its nationwide supply chain network in this challenging market situation.

但是，我們仍然發現了一些希望。客戶對 JDL 集成供應鏈物流服務的獨特優勢的認識顯著提高，預示著未來的客戶轉換和整體可尋址市場擴展。而得益於外部業務的增長和運營效率的不斷提升，在技術的推動下，JDL能夠在一定程度上消化額外成本，並在Q1繼續提升利潤率。這種非公認會計原則的經營虧損比一年前縮小了 55% 以上。在這個充滿挑戰的市場形勢下，JDL 再次改進了其全國供應鍊網絡的設計和效率。

Since we received all required regulatory approvals and completed the additional investment in Dada Group by the end of February, we consolidated the financial results of Dada in our segment reporting starting from March this year. During the consolidation period, Dada reported revenues of RMB 688 million and an operating loss of RMB 191 million.

由於我們在 2 月底前獲得了所有必要的監管批准並完成了對達達集團的額外投資，因此我們從今年 3 月開始將達達的財務業績合併到我們的分部報告中。合併期內，達達實現營業收入6.88億元，營業虧損1.91億元。

Dada is an indispensable part of our omnichannel strategy. Shop Now, the on-demand retail brand that we launched together on JD's main app, has been expanding at a triple-digit growth rate year-on-year in Q1 and now made this service available to users in over 400 cities. We are excited to further expand our supply chain service networks in the fast-growing on-demand (inaudible) with Dada.

達達是我們全渠道戰略不可或缺的一部分。 Shop Now是我們在京東主應用上共同推出的按需零售品牌，在第一季度以三位數的增長率同比增長，現已向400多個城市的用戶提供這項服務。我們很高興與達達一起在快速增長的按需（聽不清）中進一步擴展我們的供應鏈服務網絡。

Finally, turning to our New Businesses segment, where we took proactive optimization measures to improve operating efficiency, particularly in Jingxi business. We further focused our resources in a fewer number of selected markets to strengthen local supply chain capabilities and improve the UE model. These measures resulted in the moderation of revenue growth to 12% year-on-year, but a meaningful reduction in operating loss of nearly RMB 1 billion sequentially in Q1.

最後，轉向我們的新業務板塊，我們採取了積極的優化措施來提高運營效率，特別是在京西業務。我們進一步將資源集中在少數選定的市場，以加強當地供應鏈能力並改進 UE 模式。這些措施導致收入同比增長放緩至 12%，但在第一季度顯著減少了近 10 億元人民幣的經營虧損。

Our JD Property business remained a profitable business in a hyper-growth stage. It has successfully acquired a controlling stake in China Logistics Property Holdings, or CLP, further enhancing its logistics infrastructure. JDP has also entered into definitive agreements with approximately USD 800 million nonredeemable Series B financing in the quarter.

我們的京東地產業務在高速增長階段保持盈利。它已成功收購中國物流地產控股有限公司（CLP）的控股權，進一步加強其物流基礎設施。 JDP 還與本季度約 8 億美元不可贖回的 B 輪融資達成了最終協議。

So far, you can tell that JD's unique supply chain based business model not only ensured our capabilities in navigating different economic cycles, it also allowed us to proactively and quickly adjust our business strategies for better sustainability.

到目前為止，您可以看出，京東獨特的基於供應鏈的商業模式不僅確保了我們在不同經濟周期中的駕馭能力，還讓我們能夠主動、快速地調整我們的業務戰略，以實現更好的可持續發展。

Moving to the consolidated bottom line. Total expense ratios in Q1 declined by 63 bps year-on-year. As a result, Q1 non-GAAP net income attributable to ordinary shareholders was RMB 4 billion with non-GAAP net margin of 1.7%. Our free cash flow for the trailing 12 months this quarter was healthy at RMB 27.2 billion. By the end of Q1, cash, cash equivalents, restricted cash, and short-term investments grew to RMB 186 billion, thanks to the stable cash flow contributed by our core businesses in the past few years. Earlier this month, we also announced a special cash dividend of USD 0.63 per ordinary share or UDS 1.26 per ADS, which reflects our confidence in JD's long-term growth trajectory and strong balance sheet.

移動到合併的底線。第一季度總費用率同比下降 63 個基點。因此，第一季度非美國通用會計準則歸屬於普通股股東的淨利潤為人民幣40億元，非美國通用會計準則淨利潤率為1.7%。本季度過去 12 個月的自由現金流為 272 億元人民幣。到一季度末，得益於我們過去幾年核心業務貢獻的穩定現金流，現金、現金等價物、受限現金和短期投資增長至人民幣1860億元。本月早些時候，我們還宣布了每股普通股 0.63 美元或每股美國存託憑證 1.26 美元的特別現金股息，這反映了我們對京東的長期增長軌跡和強勁的資產負債表的信心。

While we continue to explore the hot and exciting investment opportunities, we constantly take a holistic view and consider different measures as appropriate to give back to our shareholders in the long term.

在我們不斷探索熱門和令人興奮的投資機會的同時，我們不斷以整體的眼光看待並考慮採取不同的措施以長期回饋我們的股東。

Looking ahead, the Omicron situation remains very fluid and adds a lot of variables to our business. The magnitude and duration of the COVID impact will present many uncertainties to the overall consumer behavior, supply chain and our fulfillment infrastructure. But one thing is for certain, after 19 years of efforts in building our core supply chain competencies and differentiated business model, we are uniquely positioned to swiftly adjust and respond to any dynamic situation and able to be among the first to help our customers, partners and communities during this tough time.

展望未來，Omicron 的情況仍然非常不穩定，並為我們的業務增加了很多變數。 COVID 影響的幅度和持續時間將為整體消費者行為、供應鍊和我們的履行基礎設施帶來許多不確定性。但有一點是肯定的，經過 19 年的努力打造我們的核心供應鏈能力和差異化的商業模式，我們具有獨特的優勢，能夠迅速調整和應對任何動態情況，並能夠率先幫助我們的客戶、合作夥伴在這個艱難時期和社區。

When the COVID disruption subsides, we are confident that JD will emerge stronger with expanded consumer market share, more trusted partnerships, and deeper ties with our communities and users. All of these will reinforce our mid- to long-term growth prospects.

當新冠疫情的影響消退時，我們相信京東將變得更加強大，消費者市場份額的擴大、更值得信賴的合作夥伴關係以及與我們社區和用戶的更深層次的聯繫。所有這些都將加強我們的中長期增長前景。

This concludes my prepared remarks, and we can now move to the Q&A.

我準備的發言到此結束，我們現在可以進入問答環節。

(Operator Instructions) Our first question comes from Ronald Keung with Goldman Sachs.

（操作員說明）我們的第一個問題來自高盛的 Ronald Keung。

(foreign language) My question would be on, when we compare with 2 years ago, that we've gained a lot of share and grew much faster than industry during the first quarter in the COVID outbreak. We've seen some of the industry numbers for April were relatively weak. So I want to know how are we doing in retail business compared with the industry, some of the differences that we see versus 2 years ago, and our targets and how we see the second quarter and second half growth as a result?

（外語）我的問題是，當我們與 2 年前相比時，在 COVID 爆發的第一季度，我們獲得了很多份額並且增長速度遠快於行業。我們已經看到 4 月份的一些行業數據相對疲弱。所以我想知道與行業相比，我們在零售業務方面的表現如何，我們看到的與兩年前的一些差異，我們的目標以及我們如何看待第二季度和下半年的增長？

[Interpreted] This is Xu Lei, let me answer your question. We have this month the COVID outbreaks that affected Shanghai and other regions also caused a huge challenge to China's retail industry as well as JD.com.

【解釋】我是徐磊，我來回答你的問題。本月，影響上海和其他地區的新冠肺炎疫情也給中國零售業和京東帶來了巨大挑戰。

Let me share with you some observations on the difference between the outbreak now and 2 years ago. So the Omicron variant this time, it's highly contagious and spreads rapidly. Its R0 value is 9.5, twice that of Delta, while its generation time is only 2.83 days. Also, a certain proportion of the impacted people have no symptoms, making it more difficult to track and detect. So although our virus protection and control policies remain unchanged, there are more cities and consumers affected from the epidemic and the supply chain is under much bigger impact than that in 2021.

讓我與您分享一些關於現在和2年前爆發的差異的觀察。所以這次的Omicron變種，傳染性很強，傳播速度很快。它的 R0 值為 9.5，是 Delta 的兩倍，而它的生成時間僅為 2.83 天。此外，一定比例的受影響人沒有症狀，這使得追踪和檢測變得更加困難。所以雖然我們的疫情防控政策沒有變化，但受疫情影響的城市和消費者更多，供應鏈受到的衝擊也比2021年大得多。

In the past 2 years, the impact of COVID actually brought some positive effect to the Internet and e-commerce sector as there were only limited number of regions affected for limited time. During that time period some offline businesses have been shifted online at an accelerated pace. But this time around, both the online and offline enterprises are heavily affected.

在過去的 2 年裡，COVID 的影響實際上給互聯網和電子商務領域帶來了一些積極的影響，因為在有限的時間內受到影響的地區數量有限。在此期間，一些線下業務加速向線上轉移。但這一次，線上和線下企業都受到了嚴重影響。

And the lockdown of our warehouses and delivery stations in certain key regions have led to fulfillment challenges as both inbound and outbound shipping of merchandising from warehouses are affected. Fulfillment requires much longer time. There have been -- this has resulted some order cancellation rate increase in April, and the situation is getting better in May, but the cancellation rate remains high level year-on-year.

我們在某些關鍵地區的倉庫和配送站的封鎖導致了物流方面的挑戰，因為倉庫商品的進出境運輸都受到了影響。履行需要更長的時間。有——這導致4月份訂單取消率有所上升，5月份情況有所好轉，但取消率同比仍處於較高水平。

So this year, for the China's four big cities, the first tier cities, Beijing, Shanghai, Guangzhou and Shenzhen have all been affected. While Guangzhou and Shenzhen were only affected for a short period of time, Beijing and Shanghai have been affected for a longer period of time. And the sales contribution of the four cities account for a higher proportion of JD than the city's contribution in total retail sales in China.

所以今年對於中國四大城市來說，一線城市北京、上海、廣州、深圳都受到了影響。廣州和深圳受影響的時間很短，而北京和上海受影響的時間更長。並且四個城市的銷售貢獻在京東的佔比高於該城市在中國零售總額中的貢獻。

So a majority of brands and merchants lowered budgets at the beginning of the year considering this year's economic situation. They focused more on profitability. Therefore, the business environment also does not support a high growth from the supply perspective.

因此，考慮到今年的經濟形勢，大部分品牌商和商家在年初都降低了預算。他們更關注盈利能力。因此，從供應角度來看，商業環境也不支持高增長。

So in terms of the categories besides the supermarket and health-related categories, which continue to enjoy some high growth, for the market of electronics and home appliances and apparel category, the market has been changing dramatically.

因此，除了超市和健康相關品類繼續保持高增長的品類外，電子家電和服裝品類市場發生了翻天覆地的變化。

So take the IT and electronic categories, for example. In the past 2 years, due to the global supply shortage and JD's strong supply chain capabilities we've performed relatively well. And this year, this category is faced with the overall (inaudible) and the price level is going down.

以 IT 和電子類別為例。在過去的兩年中，由於全球供應短缺和京東強大的供應鏈能力，我們的表現相對較好。而今年，這一品類面臨整體（聽不清），價格水平正在下降。

And for the telecommunications, or the mobile phone category, due to the price rise and the chip shortage, consumers eliminate to replace their devices. The cycle has been expanded.

而對於電信，或者手機類，由於價格上漲和芯片短缺，消費者排除更換設備。循環已經擴大。

As for the apparel category, due to the epidemic and sluggish consumption, there is high level of inventory backlog of spring collections. And as a result, many factories are considering skip the production plan for the summer collection.

服飾品類方面，受疫情影響和消費低迷，春季系列庫存積壓程度較高。因此，許多工廠正在考慮跳過夏季系列的生產計劃。

The epidemic has affected consumers' income and confidence. The overall consumption is depressed, as you can see from the April statistics, and this especially affected the sales of some large ticket sized items, and even user traffic has reported in April, we have seen the ticket size is dropping year-on-year in April and May.

疫情影響了消費者的收入和信心。整體消費低迷，從4月份的統計數據可以看出，尤其是一些大件大件的銷售受到了影響，甚至4月份的用戶流量也有報告，我們看到門票規模同比下降在四月和五月。

In response to the above-mentioned situation, here are two aspects we have been doing. First, we have been conducting active communications with the local government and getting on a wide range of enterprises for essential supply of more regions and also to ensure the normal operations of our warehouses and fulfillment facilities, and the situation is getting improved now.

針對上述情況，以下是我們一直在做的兩個方面。首先，我們一直在與當地政府進行積極溝通，聯繫廣泛的企業，為更多地區的必需品供應，同時確保我們的倉庫和履行設施的正常運作，現在情況正在好轉。

And on the preparation of the 618 Grand Promotion, we have seen that majority of brands and merchants are under pressure this year. Therefore, they have been more proactively participating in JD 618 Grand Promotion than the previous year. And we hope that with this event, we can support them to boost their sales and the Q2 performance provided the COVID situation is getting better.

而在618大促的籌備上，我們看到今年大部分品牌和商家都面臨壓力。因此，他們比去年更積極地參與了京東618大促。我們希望通過這次活動，我們可以支持他們提高銷售額和第二季度的業績，前提是 COVID 情況正在好轉。

And finally, I just want to share a little bit more on the relationship between supply chain and the epidemic. And first, given the current macro environment, coupled with the impact of the pandemic, it has led the government and the industry have a very high recognition of the importance of the modernized supply chain, and this has been a very positive and clear signal.

最後，我只想多分享一點供應鏈與疫情的關係。首先，在當前的宏觀環境下，加上疫情的影響，讓政府和行業對現代化供應鏈的重要性有了非常高的認識，這是一個非常積極和明確的信號。

And second, when JD talks about our supply chain capabilities, it does not only refer to those tangible things people know about, about our logistics or logistic warehouses, vehicles, it is also our algorithm and the industry know-how that we have accumulated over the years, as well as our synergy capabilities with some key brands. And all of this is a combination of the tools, the expertise, the know-how, and our collaboration with other brands. And all of these cannot be immediately achieved through some excessive subsidies or cash procurement.

其次，京東說我們的供應鏈能力，不單單是指人們知道的那些有形的東西，比如我們的物流或者物流倉庫、車輛，還有我們的算法和積累的行業知識。年，以及我們與一些關鍵品牌的協同能力。所有這一切都是工具、專業知識、專有技術以及我們與其他品牌的合作的結合。而這一切都不能通過一些過度補貼或現金采購立即實現。

And thirdly, the key points for the supply chain is stability and certainty. Under the extreme circumstances of the COVID situation, JD will continue to leverage our professional expertise and our infrastructure capabilities to reach some innovative and new solutions in this difficult situation. And so far, we have gained recognition among our partners and users and delivered some satisfying performance so far.

第三，供應鏈的關鍵是穩定性和確定性。在新冠疫情的極端情況下，京東將繼續利用我們的專業知識和基礎設施能力，在這種困難的情況下達成一些創新和新的解決方案。到目前為止，我們已經獲得了合作夥伴和用戶的認可，並提供了一些令人滿意的表現。

Our next question comes from Thomas Chong with Jefferies.

我們的下一個問題來自 Jefferies 的 Thomas Chong。

(foreign language) My first question is relating to the upcoming June 18 marketing campaign. Can management comment about how we should think about the logistics situation, the consumer sentiment and how are we doing it differently compared to previous years and our KPI?

（外語）我的第一個問題與即將到來的 6 月 18 日營銷活動有關。管理層能否評論一下我們應該如何看待物流狀況、消費者情緒以及與往年和我們的 KPI 相比，我們的做法有何不同？

And my second question is regarding our spending. In particular, on user acquisitions as well as the investment in the new business. Would we adjust our investment strategies given the dynamic situation right now?

我的第二個問題是關於我們的支出。特別是在用戶獲取以及對新業務的投資方面。鑑於目前的動態情況，我們會調整我們的投資策略嗎？

And finally, on omnichannel. Can management comment about our long-term strategies as well as the revenue contribution that we should expect?

最後，在全渠道上。管理層能否評論我們的長期戰略以及我們應該期待的收入貢獻？

[Interpreted] And just more few words from Xu Lei on the 618. We have seen so glad that, except Shanghai, overall in China, the fulfillment is coming back to a normal operation level. So every day, there are some select situations due to the COVID situation, but overall, we maintain a normal operations. And in Shanghai, there are still a few orders that continue to be fulfilled. But overall, for the good preparation, it's on the right track.

【解讀】還有徐磊在618上的幾句話。我們看到很高興，除了上海，在中國整體上，履約率正在恢復到正常的運營水平。因此，每天，由於 COVID 情況，都會出現一些特定情況，但總體而言，我們保持正常運營。而在上海，仍有少數訂單在繼續履行。但總的來說，為了做好充分的準備，它走在了正確的軌道上。

As for the participating and engagement of brands and merchants to this year's Grand Promotion, they're very active and this is outside our expectations and everything is going on the right track.

至於今年大促的品牌和商家的參與和參與，他們非常積極，這超出了我們的預期，一切都在朝著正確的方向發展。

And in terms of the KPI, I think you are thinking of the sales target, because we are still facing uncertainties of the COVID situation and the (inaudible). So we don't have a very clear number to share. However, we continue to focus on improving user's experience, and our fulfillment efficiency is the most important thing we will safeguard the shopping festival.

就 KPI 而言，我認為您正在考慮銷售目標，因為我們仍然面臨 COVID 情況和（聽不清）的不確定性。所以我們沒有一個非常明確的數字可以分享。但是，我們繼續專注於改善用戶體驗，我們的履行效率是我們將保護購物節的最重要的事情。

And so for our new business development, we will focus on the priorities, our strategies, and focus on efficiency and sustainable development.

因此，對於我們的新業務發展，我們將專注於優先事項、我們的戰略，並專注於效率和可持續發展。

And for the users growth, there are certain pressures, but we will continue to focus on the operations of the existing users and also the quality growth of the new users, and we have seen a positive trend on both sides.

而對於用戶的增長，也有一定的壓力，但我們會繼續關注老用戶的運營和新用戶的質量增長，雙方都看到了積極的趨勢。

And around some adjustments and optimization of some new businesses, we have done series of adjustments on those businesses that are unable to deliver results after a certain period of time of investment. So in the coming period of time, we'll continue to optimize our four businesses and some more optimization and adjustment work will be done.

並且圍繞一些新業務的一些調整和優化，我們對那些經過一定時間投入後仍不能見效的業務進行了一系列的調整。所以在接下來的一段時間裡，我們會繼續優化我們的四項業務，還會做更多的優化和調整工作。

And on JD's omnichannel strategy, in the past year, it has delivered very fast growth. And in Q1, this business continued a higher than overall revenue growth rate. And this COVID situation will not affect our long-term strategies in this aspect, but we will make adjustments on the investment even in the macro environment situation.

而在京東的全渠道戰略上，在過去的一年裡，它實現了非常快的增長。而在第一季度，該業務繼續保持高於整體收入的增長率。而這種新冠疫情不會影響我們在這方面的長期策略，但即使在宏觀環境的情況下，我們也會對投資進行調整。

And the omnichannel business is composed of two parts with both self-operated and our collaboration with external partners. (inaudible) in this format, we not only help those offline businesses and shops to pass the traffic, the user traffic difficulties given the COVID situation, it also helps JD to enrich our supply chain and product availability to satisfy the needs of our customers. And given the impact of the COVID situation, some self-developed omnichannel were affected. But overall, the volume is not big and certainly it has limited impact so far.

全渠道業務由自營和我們與外部合作夥伴的合作兩部分組成。 （聽不清）在這種形式下，我們不僅幫助那些線下商家和商店過流，在 COVID 情況下解決用戶流量困難，還幫助京東豐富我們的供應鍊和產品可用性，以滿足客戶的需求。並且鑑於新冠疫情的影響，一些自主研發的全渠道受到了影響。但總體而言，數量並不大，而且到目前為止影響肯定有限。

And for our on-demand retail business, as part of our omnichannel business, it achieved 3-digit growth in Q1. And so far, our Shop Now with the 1-hour delivery service has covered over 1,700 [counties] across the country and providing various product categories, and it has been connected with over 15,000 offline stores and we have experienced a rapid growth during the COVID situation.

對於我們的按需零售業務，作為我們全渠道業務的一部分，它在第一季度實現了 3 位數的增長。目前，我們的Shop Now提供1小時送貨服務，已覆蓋全國1700多個[縣]，提供各種產品類別，並已與15,000多家線下商店建立聯繫，我們在COVID期間經歷了快速增長情況。

The Shop Now program is supported by Dada's delivery infrastructure. We are using the existing networks and delivery services of Dada to perform our on-demand deliveries and this has accelerated JD's offline business expansion. And currently, together with Dada, we are supporting the digital transformation of more and more brands and offline retailers. And together, we explore the dividend of the omnichannel development.

Shop Now 計劃由達達的交付基礎設施提供支持。我們正在利用達達現有的網絡和配送服務來執行我們的按需配送，這加速了京東的線下業務擴張。而目前，我們正在與達達一起支持越來越多的品牌和線下零售商的數字化轉型。我們一起探索全渠道發展的紅利。

As the trends become more and more clear, JD is committed to bring faster and quicker services and user experience with more certainty to our consumers.

隨著趨勢越來越清晰，京東致力於為我們的消費者帶來更快捷、更確定的服務和用戶體驗。

This is Sandy. I'll add on a little bit on the revenue and GMV's contribution for our omnichannel business. So in terms of GMV and revenue contribution, they are both at a level of around 10% of our retail business. That includes our O2O on-demand sales, our 7Fresh offline fresh product business, as well as our offline home appliance franchise store business.

這是桑迪。我將補充一點收入和 GMV 對我們全渠道業務的貢獻。因此，就 GMV 和收入貢獻而言，它們都占我們零售業務的 10% 左右。這包括我們的 O2O 按需銷售、我們的 7Fresh 線下生鮮業務以及我們的線下家電加盟店業務。

Our last question comes from Kenneth Fong with Credit Suisse.

我們的最後一個問題來自瑞士信貸的 Kenneth Fong。

(foreign language) Congratulations on another strong set of results. Looking back, we did very well in cost discipline and control. Core GDR and new business up both with margins better than expected. How much more, and what are the ways that we should expect for further cost reduction or optimization over next 2 quarters?

（外語）恭喜又取得了不錯的成績。回顧過去，我們在成本紀律和控制方面做得很好。核心 GDR 和新業務的利潤率均好於預期。還有多少，我們應該期望在接下來的兩個季度進一步降低成本或優化哪些方式？

This is Sandy. Let me take this question. So since mid-March, we have been taking strict cost and expense control measures to step up financial discipline in face of the challenging external environment. We focus more on cash flow management.

這是桑迪。讓我來回答這個問題。因此，自 3 月中旬以來，面對充滿挑戰的外部環境，我們一直採取嚴格的成本和費用控制措施，加強財務紀律。我們更關注現金流管理。

For New Businesses, that's yet to show a trend of UE turnaround. As Lei Xu just mentioned, our operating efficiency improved. We adjusted the investment pace and further focused on fewer selected regions. So as a result of all these measures, despite additional COVID-related costs and expenses, especially procurement. So we expect overall, our group level bottom line, we will try to manage that to be less impacted by the COVID situation compared to top line or GMV.

對於新業務來說，這還沒有顯示出 UE 轉變的趨勢。正如徐磊剛才所說，我們的運營效率提高了。我們調整了投資節奏，進一步聚焦少數選定區域。因此，儘管有與 COVID 相關的額外成本和費用，尤其是採購，但所有這些措施的結果。因此，我們預計總體而言，我們的集團層面的底線，與頂線或 GMV 相比，我們將努力減少受 COVID 情況的影響。

So as I mentioned, the control measures just started in mid-March. So we will continue that in Q2, and we will manage our profitability and cash flow dynamically based on the overall macro environment.

正如我所提到的，控制措施是在 3 月中旬才開始的。因此，我們將在第二季度繼續這樣做，我們將根據整體宏觀環境動態管理我們的盈利能力和現金流。

We are now approaching the end of the conference call. I will now turn the call over to JD.com's Sean Zhang for closing remarks.

我們現在接近電話會議的尾聲。我現在將把電話轉給京東的 Sean Zhang 來做閉幕詞。

Thank you for joining us today on the call and for your questions. If you have any further questions, please contact me and our team. We appreciate your interest in JD.com and we look forward to talking to you again next quarter. Thank you very much.

感謝您今天加入我們的電話會議並提出您的問題。如果您有任何其他問題，請聯繫我和我們的團隊。感謝您對京東的關注，期待下個季度再次與您交流。非常感謝你。

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.

感謝您參加今天的會議。介紹到此結束。您現在可以斷開連接。再會。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此成績單中標記為 [已翻譯] 的部分由現場通話中的口譯員朗讀。]