Our previous purchase of JD Logistics proved to be a successful investment. Following our initial buy recommendation, the stock rose sharply, allowing us to realise a 25% gain in just one month. This type of company requires an active investment approach, which is why we have continued to monitor the stock closely over the past few weeks. Our original investment thesis remains fully intact. JD Logistics still operates one of the most advanced logistics networks in China, with strong positions in automation, supply chain software, and AI-driven infrastructure. At the same time, the valuation remains exceptionally low. The company continues to trade at an EV/EBITDA multiple of around 3.5x, despite strong free cash flow growth and a positive net cash position. We also believe a potential takeover by parent company JD.com cannot be ruled out. Just as we did previously, we are adding 1,500 shares to the portfolio. Following its quarterly earnings release on 12 May, JD Logistics initially rallied strongly. The company reported revenue growth of 29% to RMB 60.6 billion, while profit increased by more than 40%. Gross profit also showed a substantial improvement. Operationally, the results were particularly impressive. JD Logistics continues to expand aggressively outside China. During the first quarter, JoyExpress was launched across major European markets, including the Netherlands, Germany, France, and the United Kingdom. In addition, the company continues to invest heavily in automation, artificial intelligence, and robotics throughout its logistics network. Despite the strong results, market sentiment quickly turned negative again after the initial share price surge. Investors appear to be focusing primarily on the company’s rising cost base. JD Logistics is investing heavily in personnel, warehouses, freight capacity, and technology. As a result, operating expenses increased significantly. While the market initially reacted positively to the company’s growth figures, attention soon shifted almost entirely towards lower margins and the substantial level of ongoing investment. Conclusion Sharesunderten believes the market is once again focusing too heavily on the short term. In our view, JD Logistics’ operational position continues to strengthen. Approximately 68% of revenue now comes from external customers outside JD.com, allowing the company to evolve into an independent logistics platform rather than merely serving as JD.com’s internal delivery arm. Its international expansion is also progressing at an impressive pace. JD Logistics now operates more than 1,600 owned warehouses and maintains a logistics network covering virtually every region in China. At the same time, its European network is being rolled out rapidly. We believe this combination once again creates an attractive opportunity. Operational performance remains strong, while the share price continues to be driven largely by short-term market sentiment. We therefore do not view the recent pullback as a deterioration of the long-term investment case, but rather as a new opportunity to acquire a high-quality infrastructure business at an exceptionally attractive valuation. We are reiterating our Buy recommendation. Major ShareholdersJD.com: 63%Core Trust: 7.5% Fundamental DataCompany Name: JD Logistics, Inc.Ticker: 2618ISIN: KYG5074S1012Sector: LogisticsExchange: Hong Kong Stock ExchangeEUR/HKD Exchange Rate: 9.1Share Price (9 June): HKD 12.67 (£1.20)52-Week Low: HKD 10.2052-Week High: HKD 16.76Market Capitalisation: HKD 88.9 billion (£8.5 billion)Net Cash Position: HKD 6.5 billionPrice-to-Earnings Ratio (P/E): 7.0xDividend Yield: 0.0%Next Results: AugustWebsite: https://ir.jdl.com/?lang=en