(Yicai) Aug. 16 -- JD.Com’s shares surged after the Chinese e-commerce giant said profit almost doubled in the second quarter from a year ago because the company used its supply chain capabilities to offer competitive prices.

JD.Com [HKG: 9618] closed 8.9 percent higher at HKD108.20 (USD13.88) a share in Hong Kong today. Its New York-listed stock [NASDAQ: JD] closed 4.3 percent up at USD27 yesterday.

Net profit soared 91 percent to CNY12.6 billion (USD1.7 billion) in the three months ended June 30, the Beijing-based firm’s trading report showed yesterday. Non-GAAP net profit was CNY14.5 billion, an almost 70 percent gain. Revenue rose 1.2 percent to CNY291.4 billion (USD40.1 billion).

Chinese online retailers such as JD and Alibaba Group Holding have been cutting prices in response to consumers tightening their belts and stiff competition from PDD Holdings, which runs the low-price shopping app Temu, as well as more recent market entrants like Douyin, Kuaishou, and Xiaohongshu.

“Facing a very dynamic and competitive market, we delivered a solid set of results, notably achieving the highest single quarter non-GAAP net profit in our history,” Chief Executive Officer Sandy Xu said on the firm’s earnings conference call with analysts.

She cited increasing economies of scale and procurement efficiencies for the gains. “Instead of addressing the shifting market environment with hefty subsidies for short-term pipeline performance, we continue to focus on leveraging our core strengths in supply chain capabilities to offer competitive prices and better user experience,” Xu said.

Revenue rose at a slow pace because of a high base in the electronics and home appliance businesses last year, which offset robust growth in JD’s general merchandise and supermarket divisions, Chief Financial Officer Ian Shan explained.

Gross margin widened 137 basis points to a record high of 15.8 percent, Shan said, adding that it has increased year-on-year every quarter for nine straight quarters. “These high-quality results, coupled with our accelerated share repurchase, highlight JD's commitment to creating long-term value for our shareholders,” he said.

In the quarter, JD bought back 136.8 million of its own Class A ordinary shares, equal to 68.4 million American depository shares, for a total of USD2.1 billion. It repurchased 224.3 million Class A shares, equal to 112.2 million ADS, for USD3.3 billion in the first half of the year.

“We are confident that as we stay focused on executing our long-term strategies to offer lower-cost, higher efficiency, and best user experience, we will maintain a healthy growth of our business scale, profit, and cash flow and solidify our market position in the long term,” she concluded.

Editor: Futura Costaglione