Chinese e-commerce firm JD.com's quarterly revenue up 38 percent

JD.com, China's second-largest e-commerce firm, said on Tuesday its third-quarter revenue grew 38 percent from a year ago, slightly ahead of analysts' expectations.

The rise, along with fourth-quarter predictions that could potentially end a recent trend of slowing growth, sent the company's U.S.-listed shares higher in pre-market trading.

The online shopping firm, whose shares have fallen 26.5 percent this year against a 10.5 percent rise for larger rival Alibaba Group Holding Ltd (BABA.N), also said it aims to restructure its finance unit and hold no equity stake.

JD.com said revenue for the three months ended September was 60.7 billion yuan ($8.9 billion), just beating an average estimate of 60.2 billion yuan, according to a Thomson Reuters survey of 15 analysts.

JD.com in August forecast third-quarter revenue of 59-61 billion yuan, amid concerns that China's online retail sector is saturated and would be hit by a slowing economy.

The company's net loss for the quarter expanded to 807.9 million yuan from 534.9 million yuan a year earlier.

It predicts fourth quarter revenue of 75-77.5 billion yuan, similar to this quarter's near 40 percent growth rate.

JD.com made a net loss of 0.64 yuan ($0.10) per American Depository Share in the third quarter, compared with a loss of 0.39 yuan a year earlier.

FINANCE ARM RESTRUCTURING

The company now plans to reorganise its JD Finance arm to make it a wholly Chinese-owned entity.

The move would put the business in a similar position to that of Alibaba's Ant Financial Services Group, a domestic Chinese entity still closely tied to the original e-commerce company.

JD.com CEO Richard Liu was the only planned buyer named, though the company intends for others to participate.

The move will enable it to apply for licenses that Chinese law forbids foreign-invested companies from owning, such as for securities and mutual funds.

Liu, on a conference call with analysts, also cited fundraising concerns, saying that "without a domestic structure it may become increasingly difficult to raise new capital above the previous valuation level."

He declined to give a timeframe for the deal, but said that the company wants to "move ahead as quickly as we can."

Afterwards, JD.com will receive 40 percent of any pre-tax profit JD Finance makes. If Chinese regulators allow it, the e-commerce company can in the future convert its rights back into a 40 percent stake.

In January, JD Finance raised $1 billion from investors including Sequoia Capital China, China Harvest Investments and China Taiping Insurance and was valued at 46.65 billion yuan ($6.8 billion).

Despite the intention to become a domestic entity, JD Finance is not yet profitable and can only list in China after having been so for three years.