JD.com (JD) is set to report fourth quarter earnings Tuesday. Current consensus is for the company to report a Q4 loss of CNY 0.12 per share on revenues of CNY 51.69 bln.

Guidance/Key Metrics

• Guidance for Q4 revenues of CNY 51.0-52.5 bln (+47-51% Y/Y)

• GMV

  • GMV is the total value of all orders for products and services placed in their online direct sales business and on their online marketplace, regardless of whether the goods are sold or delivered or returned.
  • GMV in Q3 was CNY 115.0 bln, which represented a 71% Y/Y increase. Excluding Paipai.com, which is a C2C service that the company recently discontinued, GMV grew 76% Y/Y. Core GMV from the company's marketplace business grew 121% in Q3 and accounted for nearly 45% of their core GMV during the period. Sequentially, it grew 13% over the seasonally strong Q2.
• Annual active customer accounts
  • This metric represents accounts that made at least one purchase during the previous twelve months.
  • Annual active customer accounts increased by 59% to 131.9 million in the 12 months ended September 30, 2015 from 82.8 million in the 12 months ended September 30, 2014. Excluding Paipai.com unique customers, annual active customer accounts increased by 62% to 126.9 million in the same period ended September 30, 2015.
• Orders fulfilled
  • Orders fulfilled is the total number of orders delivered net of orders returned.
  • In Q3 fulfilled orders were 329.7 million, an increase of 85% from 178.2 million for the same period in 2014. Fulfilled orders placed through mobile accounted for approximately 52% of total orders fulfilled in the third quarter of 2015, an increase of more than 210% compared to the same period in 2014.

China Growth

• During the Q3 conference call, JD stated that they suspect the macroeconomic headwinds in China may have some impact on their business. They also stated that they still see a very robust growth rate and that the overall consumption rate, at that time, had not been much impacted by the slowing macro environment.

Implied Move

Based on JD options, the current implied volatility stands at ~ 60%, which is 20% lower than historical volatility (over the past 30 days). Based on the JD Weekly Mar04 $26straddle, the options market is currently pricing in a move of ~11% in either direction by weekly expiration (Friday).