Shares of JD.com (NASDAQ:JD) were moving higher Monday after the Chinese e-commerce giant topped estimates in its second-quarter earnings report. As China rebounded from the pandemic, the company saw strong demand in areas like grocery and general merchandise, which drove its better-than-expected results.
As of 3:45 p.m. EDT, the stock was up 7.5%.
JD's revenues rose 33.8% to $28.5 billion, compared to expectations of $27.5 billion, as services revenue grew 36.4% and revenue from general merchandise jumped 45.4%.
JD is also building out businesses like its marketplace, adding new third-party retailers to JD Mall, and it grew revenue from its third-party logistics business by 54.4% to $2.2 billion. JD Health also raised an $830 million investment from Hillhouse Capital; its health division has grown rapidly during the COVID-19 pandemic.
During the quarter, the company completed a successful listing on the Hong Kong Stock Exchange, bringing in about $4.5 billion that the company plans to invest in "supply chain-based technology initiatives to further enhance customer experience and improve operating efficiency."
Operating profits about doubled in the quarter as revenues rose and the losses it is incurring as it builds out new businesses like logistics narrowed. Spending on operating expenses in categories such as research and development and general and administrative were also close to flat.
The improvement in operating margins helped lift adjusted earnings per share $0.33 to $0.50, beating estimates for $0.38.
"Our scale advantages and cost efficiency enabled us to provide attractive prices during our June 18 sales promotions, benefiting consumers and society as China's economy emerges from the difficult pandemic period, and helped drive solid top and bottom line results for the second quarter," said CFO Sandy Xu.
JD did not provide new guidance, but the company appears to be building momentum again now that China has largely contained its COVID-19 outbreak -- within the country of 1.4 billion people, there are now only around 100 new cases being reported each day, according to the Johns Hopkins University Coronavirus Resource Center.
With a strong and fast-growing e-commerce business anchoring its investments in areas like healthcare and logistics, JD continues to have a promising long-term growth path. Trading at a P/E ratio of 56.5, this Chinese tech stock looks reasonably priced relative to its growth potential.