JD.com Earnings 2019-12-31

JD.com Earnings 2019-12-31

JD 20F Annual Report

Balance Sheet	Income Statement	Cash Flow

Form 20-F

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

20-F

(Mark One)

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 .

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number:

001-36450

JD.com, Inc.

(Exact Name of Registrant as Specified in its Charter)

N/A

(Translation of Registrant’s Name

into English)

Cayman Islands

(Jurisdiction of Incorporation or Organization)

20th Floor, Building A

No. 18 Kechuang 11 Street

Yizhuang Economic and Technological Development Zone

Daxing District

, Beijing

101111

People’s Republic of

China

(Address of Principal Executive Offices)

Sidney Xuande Huang

, Chief Financial Officer

Telephone: +

86 10

8911-8888

Email: ir@jd.com

20th Floor, Building A

No. 18 Kechuang 11 Street

Yizhuang Economic and Technological Development Zone

Daxing District

, Beijing

101111

People’s Republic of

China

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
American depositary shares (one American depositary share representing two Class A ordinary shares, par value US$0.00002 per share) Class A ordinary shares, par value US$0.00002 per share*	JD	The Nasdaq Stock Market LLC (The N asdaq Global Select Market) The Nasdaq Stock Market LLC (The N asdaq Global Select Market)

*	Not for trading, but only in connection with the listing on The N asdaq Global Select Market of American depositary shares.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:


		2,483,366,264 Class A ordinary shares (excluding the 36,904,874 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under the Share Incentive Plan) and 453,672,011 Class B ordinary shares, par value US$ 0.00002 per share, as of December 31, 2019.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☒

Yes

☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐

Yes

☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act.

☐

†	The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:


U.S. GAAP ☒		International Financial Reporting Standards as issued by the International Accounting Standards Board ☐		Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐

Item 17

☐

Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act).

☐

Yes

☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐

Yes

☐

Table of Contents

TABLE OF CONTENTS


INTRODUCTION		1
FORWARD-LOOKING INFORMATION		1
PART I		3
Item 1.	Identity of Directors, Senior Management and Advisers	3
Item 2.	Offer Statistics and Expected Timetable	3
Item 3.	Key Information	3
Item 4.	Information on the Company	56
Item 4A.	Unresolved Staff Comments	97
Item 5.	Operating and Financial Review and Prospects	98
Item 6.	Directors, Senior Management and Employees	120
Item 7.	Major Shareholders and Related Party Transactions	130
Item 8.	Financial Information	136
Item 9.	The Offer and Listing	138
Item 10.	Additional Information	138
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	150
Item 12.	Description of Securities Other than Equity Securities	151
PART II		153
Item 13.	Defaults, Dividend Arrearages and Delinquencies	153
Item 14.	Modifications to the Rights of Security Holders and Use of Proceeds	153
Item 15.	Controls and Procedures	153
Item 16A.	Audit Committee Financial Expert	154
Item 16B.	Code of Ethics	154
Item 16C.	Principal Accountant Fees and Services	154
Item 16D.	Exemptions from the Listing Standards for Audit Committees	154
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	155
Item 16F.	Change in Registrant’s Certifying Accountant	155
Item 16G.	Corporate Governance	156
Item 16H.	Mine Safety Disclosure	156
PART III		157
Item 17.	Financial Statements	157
Item 18.	Financial Statements	157
Item 19.	Exhibits	157
SIGNATURES		163

Table of Contents

INTRODUCTION

Unless otherwise indicated or the context otherwise requires, references in this annual report to:

•

“ADSs” are to our American depositary shares, each of which represents two Class A ordinary shares;

•

“annual active customer accounts” are to customer accounts that made at least one purchase during the twelve months ended on the respective dates, including both online retail and online marketplace;

•

“China” or the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan;

•

“ordinary shares” are to our Class A and Class B ordinary shares, par value US$0.00002 per share; and

•

“we,” “us,” “our company” and “our” are to JD.com, Inc., its subsidiaries and its consolidated variable interest entities and their subsidiaries.

FORWARD-LOOKING INFORMATION

This annual report on Form

20-F

contains forward-looking statements that reflect our current expectations and views of future events. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to, among other things:

•

our goals and strategies;

•

our future business development, financial conditions and results of operations;

•

the expected growth of the retail and online retail markets in China;

•

our expectations regarding demand for and market acceptance of our products and services;

•

our expectations regarding our relationships with customers, suppliers and third-party merchants;

•

our plans to invest in our fulfillment infrastructure and technology platform as well as new business initiatives;

•

competition in our industry; and

•

relevant government policies and regulations relating to our industry.

Table of Contents

We would like to caution you not to place undue reliance on these forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in “Item 3.D. Key Information—Risk Factors.” Those risks are not exhaustive. We operate in an evolving environment. New risks emerge from time to time and it is impossible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements except as required under applicable law. You should read this annual report and the documents that we reference in this annual report completely and with the understanding that our actual future results may be materially different from what we expect.

Our reporting currency is Renminbi, or RMB. Unless otherwise noted, all translations from RMB to U.S. dollars in this annual report are made at a rate of RMB6.9618 to US$1.00, the exchange rate in effect as of December 31, 2019 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. We make no representation that any RMB amounts could have been, or could be, converted into U.S. dollars, as the case may be, at any particular rate, or at all.

Table of Contents

PART I

Item 1.

Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.

Offer Statistics and Expected Timetable

Not applicable.

Item 3.

Key Information

Selected Financial Data

The following table presents the selected consolidated financial information of our company. As of June 30, 2017, we deconsolidated our finance business operated by Beijing Jingdong Financial Technology Holding Co., Ltd. (now known as Beijing Jingdong Digital Technology Co., Ltd., or JD Digits), as a result of the reorganization of JD Digits. Accordingly, the historical financial results of JD Digits are reflected as discontinued operations in our consolidated financial statements for periods from January 1, 2015 to June 30, 2017, except for consolidated balance sheets as of December 31, 2015 as the impact of JD Digits was not material during this period. Please see “Item 4. Information on the Company—A. History and Development of the Company” for further information. The selected consolidated statements of operations data for the years ended December 31, 2017, 2018 and 2019, selected consolidated balance sheets data as of December 31, 2017, 2018 and 2019 and selected consolidated cash flow data for the years ended December 31, 2017, 2018 and 2019 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page

F-1.

The selected consolidated statements of operations data for the years ended December 31, 2015 and 2016, selected consolidated balance sheets data as of December 31, 2015 and 2016 and selected consolidated cash flow data for the year ended December 31, 2016 have been derived from our audited consolidated financial statements not included in this annual report, and the cash flow data for the year ended December 31, 2015 have been retrospectively adjusted as a result of the new accounting guidance adopted on January 1, 2018 (see note (6) below for more details). Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.


	For the Year Ended December 31,
	2015			2016			2017			2018			2019
	RMB			RMB			RMB			RMB			RMB			US$
	(in millions, except for share, per share and per ADS data)
Selected Consolidated Statements of Operations Data:
Net revenues:
Net product revenues		167,936			237,944			331,824			416,109			510,734			73,362
Net service revenues		13,106			20,346			30,508			45,911			66,154			9,503

Total net revenues		181,042			258,290			362,332			462,020			576,888			82,865

Cost of revenues		(158,960	)		(222,935	)		(311,517	)		(396,066	)		(492,467	)		(70,738	)
Fulfillment		(12,367	)		(18,560	)		(25,865	)		(32,010	)		(36,968	)		(5,310	)
Marketing		(7,233	)		(10,159	)		(14,918	)		(19,237	)		(22,234	)		(3,194	)
Research and development		(2,902	)		(4,453	)		(6,652	)		(12,144	)		(14,619	)		(2,100	)
General and administrative		(2,188	)		(3,436	)		(4,215	)		(5,160	)		(5,490	)		(789	)
Impairment of goodwill and intangible assets		(2,750	)		—			—			(22	)		—			—
Gain on sale of development properties		—			—			—			—			3,885			558

Income/(loss) from operations (1)(2)(3)		(5,358	)		(1,253	)		(835	)		(2,619	)		8,995			1,292

Other income/(expense):
Share of results of equity investees		(2,852	)		(2,782	)		(1,927	)		(1,113	)		(1,738	)		(250	)
Interest income		673			1,227			2,530			2,118			1,786			257
Interest expense		(73	)		(619	)		(964	)		(855	)		(725	)		(104	)

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	For the Year Ended December 31,
	2015			2016			2017			2018			2019
	RMB			RMB			RMB			RMB			RMB			US$
	(in millions, except for share, per share and per ADS data)
Others, net		(147	)		1,544			1,317			95			5,375			772

Income/(loss) before tax		(7,757	)		(1,883	)		121			(2,374	)		13,693			1,967
Income tax benefits/(expenses)		15			(166	)		(140	)		(427	)		(1,803	)		(259	)

Net income/(loss) from continuing operations		(7,742	)		(2,049	)		(19	)		(2,801	)		11,890			1,708

Net income/(loss) from discontinued operations, net of tax		(1,376	)		(1,365	)		7			—			—			—

Net income/(loss)		(9,118	)		(3,414	)		(12	)		(2,801	)		11,890			1,708
Net loss from continuing operations attributable to non-controlling interests shareholders		(10	)		(48	)		(135	)		(311	)		(297	)		(42	)
Net loss from discontinued operations attributable to non-controlling interests shareholders		—			(4	)		(5	)		—			—			—
Net income from continuing operations attributable to mezzanine equity classified as non-controlling interests shareholders		—			—			—			2			3			0
Net income from discontinued operations attributable to mezzanine equity classified as non-controlling interests shareholders		—			445			281			—			—			—

Net income/(loss) attributable to ordinary shareholders		(9,108	)		(3,807	)		(153	)		(2,492	)		12,184			1,750

Including : Net loss from discontinued operations attributable to ordinary shareholders		(1,376	)		(1,806	)		(269	)		—			—			—

Net income/(loss) from continuing operations attributable to ordinary shareholders		(7,732	)		(2,001	)		116			(2,492	)		12,184			1,750

Net income/(loss) per share
Basic
Continuing operations		(2.83	)		(0.71	)		0.04			(0.87	)		4.18			0.60
Discontinued operations		(0.50	)		(0.64	)		(0.09	)		—			—			—
Net income/(loss) per share		(3.33	)		(1.36	)		(0.05	)		(0.87	)		4.18			0.60
Diluted
Continuing operations		(2.83	)		(0.71	)		0.04			(0.87	)		4.11			0.59
Discontinued operations		(0.50	)		(0.64	)		(0.09	)		—			—			—
Net income/(loss) per share		(3.33	)		(1.36	)		(0.05	)		(0.87	)		4.11			0.59
Net income/(loss) per ADS (4)
Basic
Continuing operations		(5.65	)		(1.43	)		0.08			(1.73	)		8.37			1.20
Discontinued operations		(1.01	)		(1.29	)		(0.19	)		—			—			—
Net income/(loss) per ADS		(6.66	)		(2.71	)		(0.11	)		(1.73	)		8.37			1.20
Diluted
Continuing operations		(5.65	)		(1.43	)		0.08			(1.73	)		8.21			1.18
Discontinued operations		(1.01	)		(1.29	)		(0.18	)		—			—			—
Net income/(loss) per ADS		(6.66	)		(2.71	)		(0.11	)		(1.73	)		8.21			1.18
Weighted average number of shares:
Basic		2,735,034,034			2,804,767,889			2,844,826,014			2,877,902,678			2,912,637,241			2,912,637,241
Diluted		2,735,034,034			2,804,767,889			2,911,461,817			2,877,902,678			2,967,321,803			2,967,321,803

(1)	Includes share-based compensation expenses as follows:

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For the Year Ended December 31,

20-F	2019-12-31	Filed 2020-04-15
20-F	2018-12-31	Filed 2019-04-15
20-F	2017-12-31	Filed 2018-04-27
20-F	2016-12-31	Filed 2017-05-01
20-F	2015-12-31	Filed 2016-04-18

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Large accelerated filer

Accelerated filer

Non-accelerated
filer

Emerging growth company