STOCKS | Morgan Stanley Cuts JD Logistics Rating, Price Target By 25%

Morgan Stanley downgraded JD Logistics (02618) to Equal Weight from Overweight and cut its target price by 25% to HK$12.6 from HK$16.9, according to ETNet. The broker said JD Logistics' organic revenue growth has slowed, while persistently high fuel costs are limiting gross margin improvement. It added that earnings growth is increasingly dependent on cost savings rather than stronger business momentum, and that the market offers limited valuation support for that model. Morgan Stanley said second-quarter revenue growth excluding JD Daojia was only in the mid-single digits, and it expects the contribution from instant delivery to fade as consolidation effects ease. Overseas business still accounted for a mid-single-digit share of revenue and remained loss-making. The broker also said fuel-related expenses accounted for a high-single-digit percentage of revenue. Management expects fuel costs to remain a major pressure in the second half of 2026, while efficiency measures are unlikely to deliver a positive margin surprise. Morgan Stanley cut its 2026 to 2028 gross margin forecasts by 0.3 to 0.6 percentage points and lowered adjusted earnings per share estimates by 3% to 13%.