TMTPOST -- The American depositary receipts (ADRs) of JD.com fell as much as 7.1% at morning trading and finished around 6.6% lower Thursday. Shares closed at their lowest since September 25, wiping out all the gains following China’s economic stimulus measures unveiled late September despite JD’s earnings beat announced earlier Thursday.

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JD posted mixed results for the quarter ended September 30. The bottom line topped Wall Street expectation though slowed from the previous quarter. On non-GAAP basis, the ajusted diluted net income per American depositary share (ADS) grew 29.5% year-over-year (YoY) to RMB8.68, or US$1.20, much better than analysts’ estimate of RMB7.57 polled by FactSet. Net income surged 47.8% YoY to RMB11.7 billion, also beating anlaysts’ projection. Adjusted net income,which excludes share-based compensation and fair-value changes of long-term investments, among other items, jumped 23.9% YoY to RMB13.2 billion, compared with a 69% YoY increase for the June quarter.

Adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization, gained 17% YoY to RMB15.1 billion, exceeding analysts’ projected RMB13.8 billion, and adjusted EBITDA margin was 5.8%, higher than estimated 5.27%. In comparison, the adjusted EBITDA climbed 30% with a margin of 4.6% for the June quarter.

JD’s top line accelerated from a 1.2% modest YoY increase for the previous quarter. The total net revenue advanced 5.1% YoY to RMB260.39 billion, whereas analysts polled by FactSet expected revenue would be RMB260.43 billion and LSEG data showed estimates of RMB261.45 billion. Net product revenues increased 4.8% YoY and net service revenues up 6.5% for the third quarter. The quarter ended September traditionally is a lull in Chinese consumption between major shopping festivals in June and November, while the Chinese government  in August rolled out an expansive trade-in policy across multiple sectors, ranging from automobiles and home appliances to real estate, to boost consumption. Given the government’s efforts to stimulate consumer spending, JD’s revenue expansion miss suggests consumers still felt cautious on spending prior to Beijing’s new round of stimulus bazooka unveiled late September.

JD said in a statment that the government-backed trade-in program have been launched on JD platform since August 26 and the trade-in offerings have been well received by customers. JD CEO Sandy Xu highlighted the significant push in the trade-in program. “The National Bureau of Statistics reported that September sales of household appliances and consumer electronics grew significantly compared to July and August. So, this trend is also mirrored on JD.com, where the trade-in program has driven our increased demand of sales for home appliances and computer in September. Our sales on these categories increased sequentially in each of the three months in the third quarter," Xu told analysts on an earnings conference.

Xu noted the potential of the trade-in policy has yet to be fully realized in the third quarter, partly because some of the consumers hasn't been completely aware of this policy, let alone to take advantage of the policy. On the other side, the high demand for some subsidized goods may not be met due to limited production capacity. “While we see consumer sentiment starts to improve, we understand it takes time for the benefits of the policies to feed through,” Xu said.

Xu expressed optimism on the more forceful fiscal stimulus plans unveiled recently and the expansion of the trade-in program in greater scale. Xu said the policy remains attractive to consumers as reflected during JD's Singles Day Grand Promotion in the fourth quarter, where JD’s home appliances and computer sales continue to grow steadily.”We hope the policy will continue and expand to other categories to sustain this meaningful momentum,” said Xu.

By segment, JD Retails brought RMB224.99 billion with a 6.1% YoY increase, compared with a gain of 1.5% in the June quarter. Operating income of the core business stood at RMB11.61 billion with a 5.5% YoY increase following a rise of 24.2% three months earlier. Revenue from JD Logistics gained 6.6% YoY to RMB44.34 billion following a 7.7% increase in the second quarter. Operating income for the June quarter soared 624.3% YoY to RMB2.09 billion. Revenue from New Businesses, which includes Dada, JD Property,Jingxi and overseas businesses, dropped 25.7% YoY to RMB4.64 billion, compared with a 35% decline for the second quarter. The segment widened operating loss 220% YoY to RMB615 million for the third quarter.