JD.com, Inc. (NASDAQ:JD) Q2 2019 Earnings Conference Call - Final Transcript
Aug 13, 2019 • 07:30 am ET
Sidney Xuande Huang
trailing 12 months has returned to a solid RMB7.4 billion. Let's turn to our third quarter outlook. In light of the accelerated growth momentum in the second quarter and July, we expect net revenue to grow between 20% and 24% on a year-over-year basis. We remain optimistic about the Chinese consumer market and JD.com's competitive market position despite uncertainties with the macro environment.
Finally, I would like to comment on our full year earnings outlook. Our non-GAAP net income attributable to ordinary shareholders in the first half of 2019 was RMB6.8 billion with a 2.5% net margin. In addition to economies of scale from JD Retail business and the rapid improvement in Logistics operating efficiencies, we also benefited from the newly enacted VAT Tax Reform as well as a couple of other items under other income, which totaled RMB1.8 billion during the first half that may be non-recurring in nature. We intend to reinvest these extra gains back into the business in the second half to drive our lower-tier cities strategy. Therefore, we are revising up our 2019 full year non-GAAP net income guidance to be between RMB8 billion and RMB9.6 billion, which reflect our second half investment strategy and our anticipation for continued macroeconomic uncertainties.
The new margin guidance is above the historical peak level in 2017 and we believe our reinvestment strategy in the second half will help drive sustained growth and continuously rising profitability into 2020. Overall, we are proud of the first half results, which speak for the success of the series of strategic and organizational changes we have implemented over the past several quarters. We hope you share our confidence in our unique supply chain capabilities and the deep competitive moat around our scale and technology-driven business model.
This concludes my prepared remarks, and we can now move to the Q&A session. Thank you.