JD.com has created an innovative retail division that includes its grocery business 7Fresh.
Bloomberg | Bloomberg | Getty Images
Shares of Chinese online retailer listed on Hong Kong Stock Exchange JD.com It rose 1.2% on Wednesday, outperforming the decline seen in Hang Seng Index After the company announced a $5 billion share buyback plan late Tuesday.
The company’s U.S.-listed shares rose 2.24% Tuesday after the announcement. JD.com’s shares in Hong Kong and the U.S. have fallen about 20% since the start of the year.
By comparison, Hong Kong's benchmark Hang Seng Index fell about 0.82% on Wednesday, but is up about 4% year-to-date.
This announcement is JD.com's second buyback this year, following a $3 billion buyback announcement in March.
Responding to the move, Chelsea Tam, a senior equity analyst at Morningstar, said the decision to announce a share buyback was “not surprising.” She explained: “It’s a common theme in China when stock prices and growth are low.”
Tam also pointed out that Vape Shopanother Chinese e-commerce company that increased its share buyback program last week.
China's e-commerce sector is suffering from a slowing domestic economy.
Earlier this month, Alibaba’s second-quarter results missed expectations on both earnings and net profit. On Monday, Pinduoduo, the parent of Teemu, had its worst session ever after its second-quarter results missed expectations on both revenue and earnings per share.
In February, Alibaba announced a $25 billion share buyback after missing revenue targets for the fourth quarter of 2023.
