China's e-commerce giant JD.com has beat market expectations recording a full-year profit for the first time.
The Nasdaq-listed company announced its financial results on Tuesday evening, reporting a net income of 1 billion yuan ($144.9 million) for 2016. That's a dramatic turnaround from a 900 million yuan loss in 2015.
However, based on accounting standards commonly used in the United States, the company saw a net loss of 3.5 billion yuan.
That's still a big improvement on the 9.4 billion yuan loss in 2015, due to better-than-expected sales in the fourth quarter which pushed net revenue up 44 percent to 260.2 billion yuan.
The results come as JD decided to spin off its finance arm for 14.3 billion yuan and 40 percent of the future pre-tax profit of JD Finance, according to the financial statement, setting the stage for its expansion in a head-to-head competition with rivals including Alibaba's Ant Finance and Tencent's WeChat Pay.
In addition, JD.com will be able to convert its profit sharing right into 40 percent of JD Finance's equity interest, subject to applicable regulatory approvals.
The spinoff will be completed by the middle of 2017, with buyers apart from Chief Executive Officer Richard Liu still unclear.
Richard Liu will acquire an approximately 4.3 percent equity stake of JD Finance and will obtain a majority of voting rights in the fintech company through his equity stake and voting proxy and/or other arrangement with other investors and ESOP participants.
JD Finance, which was established in September 2012 and has been operating separately since October 2013, completed 6.65 billion yuan Series A funding in January 2016, at a valuation of 46.65 billion. Funding was led by Sequoia Capital China, Harvest Capital Management, and China Taiping Insurance Holdings.
