Gelonghui, May 22 | Pinduoduo (PDD.US) rose 1% to US$146.9 before the market opened.
Pinduoduo is about to announce its results before the market opens. The agency predicts first-quarter revenue of 76.558 billion yuan, a year-on-year increase of 103.41%; U.S. stock earnings are 9.66 yuan, a year-on-year increase of 74.13%.
In addition, UBS recently issued a report stating that the market is overly pessimistic about the geopolitical risks faced by Temu, a subsidiary of Pinduoduo, while ignoring the huge total potential market (TAM) it provides for low-income consumers who are underserved overseas.
Temu\’s innovative managed e-commerce model should result in higher profit margins compared to the third-party marketplace model.
It is expected that by 2028E, Temu\’s merchandise turnover operating profit margin will reach 8%. Market expectations are 4%, exceeding the 3% profit margin in Pinduoduo\’s core market.
Therefore, the target price of Pinduoduo was raised from US$217 to US$248. The buy rating was reiterated.
UBS pointed out that catalysts for Pinduoduo\’s re-rating include narrowing of Temu\’s losses; strong revenue growth despite a competitive environment; Temu is expected to achieve breakeven by the end of 2025.
Pinduoduo rose 1% before the market opened, and will announce results soon.
Gelonghui, May 22 | Pinduoduo (PDD.US) rose 1% to US$146.9 before the market opened.
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May 22, 2024 5:59 pm