Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD) [1][32] Core Insights - Revenue and profit fell short of market expectations, but monetization capabilities continue to improve. In Q3 2024, Pinduoduo achieved revenue of RMB 99.35 billion, a year-over-year increase of 44%, but below Bloomberg's consensus estimate of RMB 102.83 billion. The Non-GAAP net profit was RMB 27.459 billion, up 61% year-over-year but down 20% quarter-over-quarter, also below the consensus estimate of RMB 29.207 billion [1][17] - The company is increasing investments in its platform ecosystem, with advertising revenue of RMB 49.351 billion (up 24% year-over-year) and commission revenue of RMB 50 billion (up 72% year-over-year), although the latter was below market expectations [2][19] - The platform's governance system is continuously optimized to reduce product safety risks, with significant investments in compliance teams and proactive management of product listings [2][23] Summary by Sections Revenue and Profit Growth - In Q3 2024, Pinduoduo's revenue reached RMB 99.35 billion, a year-over-year increase of 44% and a quarter-over-quarter increase of 2%, but below market expectations [1][17] - The company continues to enhance its platform ecosystem, launching initiatives to reduce merchant transaction costs and improve operational efficiency [2][19] Gross Margin and Profitability - The gross margin for Q3 2024 was 60.03%, a decrease of 1 percentage point year-over-year and a decline of 5.25 percentage points quarter-over-quarter [3][25] - The report indicates that while profitability may be under pressure in the short term, there is potential for long-term improvement [3][30] Earnings Forecast and Investment Rating - Due to lower-than-expected profit release in Q3 2024, the forecast for Non-GAAP net profit for 2024-2026 has been adjusted to RMB 1211.9 billion, RMB 1486.3 billion, and RMB 1817.1 billion, respectively, with corresponding PE ratios of 8.3, 6.8, and 5.5 [3][32]

Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD.O) with a current price of $104.09 [1]. Core Views - Pinduoduo's Q3 2024 financial report shows a revenue of 99.35 billion yuan, a year-over-year increase of 44%. The Non-GAAP net profit attributable to ordinary shareholders was 27.46 billion yuan, up 61% year-over-year. However, both revenue and profit fell short of market expectations due to increased investments in the domestic platform ecosystem and overseas compliance [1][2]. - As of September 2024, Pinduoduo's cash and cash equivalents, along with short-term investments, amounted to 308.5 billion yuan, indicating a strong cash position compared to 284.9 billion yuan at the end of June 2024 and 202.8 billion yuan at the end of September 2023 [1]. Summary by Sections Revenue Breakdown - Online marketing services revenue reached 49.35 billion yuan, growing 24% year-over-year, contributing nearly 50% of total revenue. Transaction services revenue was 50 billion yuan, a 72% year-over-year increase, but the growth rate slowed due to changes in commission rates and an increase in the share of Temu's semi-managed services [2][3]. - Pinduoduo launched several merchant support initiatives, including a 10 billion yuan reduction plan and a new merchant support plan, aimed at enhancing the platform and merchant ecosystem for long-term development [2][3]. Profit Forecast and Investment Recommendations - The company is expected to achieve revenue growth rates of 61.7%, 27.6%, and 20.9% for 2024, 2025, and 2026, respectively. Non-GAAP net profits are projected to be 116.5 billion yuan, 148.2 billion yuan, and 188.4 billion yuan for the same years, corresponding to price-to-earnings ratios of 9.0, 7.1, and 5.6 [3][4]. - The report expresses confidence in Pinduoduo's ability to capture market share in both domestic and international markets, maintaining the "Buy" rating and continuous recommendation [3].

Investment Rating - The investment rating for Pinduoduo (PDD) is "Buy" (maintained) [2] Core Views - The report indicates that Pinduoduo's Q3 2024 performance was below expectations, with both revenue and profit impacted by fee reduction policies, leading to pressure on the main platform's profitability [2] - The company's revenue for Q3 2024 was 99.4 billion yuan, a year-on-year increase of 44%, but lower than Bloomberg's consensus estimate [2] - The report highlights that the online marketing services revenue was 49.4 billion yuan (up 24.3% year-on-year), while transaction services revenue reached 50 billion yuan (up 71.5% year-on-year), both of which were below expectations [2] - The introduction of various support measures for merchants, including fee reductions and refunds, is expected to increase uncertainty regarding profitability in the short term [2] - The overseas business, particularly the Temu platform, is progressing with a semi-managed model, but geopolitical factors and intensified competition are areas of concern [2] Summary by Sections Financial Performance - For Q3 2024, Pinduoduo's Non-GAAP net profit reached 27.5 billion yuan, a year-on-year increase of 61%, but below Bloomberg's consensus estimate by 6% [2] - The report provides financial projections for the next three years, estimating revenues of 387.3 billion yuan, 471.4 billion yuan, and 545.1 billion yuan for 2024, 2025, and 2026 respectively, with year-on-year growth rates of 56.4%, 21.7%, and 15.6% [4] Cost Structure - The report notes that the sales expense ratio, management expense ratio, and R&D expense ratio were recorded at 30.7%, 1.8%, and 3.1% respectively, with year-on-year changes of -0.9 percentage points, +0.7 percentage points, and -1.1 percentage points [2] Market Position - The report emphasizes the competitive landscape, particularly the impact of Amazon's low-price offerings in the mobile sector, which could affect Pinduoduo's market share [2] - The report suggests that while the overseas business is expected to improve profitability with the global rollout of the semi-managed model, the intensifying competition in the overseas e-commerce market remains a significant risk [2]

Investment Rating - The investment rating for the company is "Buy" with a target price of $132.0 per ADR [4]. Core Insights - The company reported Q3 total revenue growth of 44% year-on-year, reaching 99.35 billion yuan, slightly below market expectations of 102.83 billion yuan. Online marketing services and other revenues were 49.35 billion yuan, growing 24% year-on-year, while transaction service revenue was 50.0 billion yuan, up 72% year-on-year. Non-GAAP net profit attributable to shareholders was 27.46 billion yuan, a 61% increase, with earnings per ADS at 18.6 yuan, lower than the expected 20.2 yuan [1][5]. - The company is intensifying its focus on high-quality development strategies, investing in building a healthy platform ecosystem through product development, marketing operations, and supply chain management. This includes a series of fee reductions and support policies for merchants, such as a 10 billion yuan fee reduction plan [5]. - Despite the strong revenue growth, the company faces increased competition in the e-commerce sector, which may lead to a slowdown in revenue growth and a gradual decline in profit margins. However, initial positive feedback from merchants regarding the company's support measures indicates a foundation for long-term sustainable development [5]. Financial and Valuation Summary - The total market capitalization is approximately $144.557 billion, with a circulating market value of the same amount. The total number of ADRs is 1,389 million, and the total share capital is 5,555 million. The stock has a 12-month low/high of $164.69/$88.01 [4]. - The company’s valuation is considered attractive based on comparisons with leading Chinese internet companies and U.S. e-commerce peers, despite the outlook for business growth and expense ratios being below expectations. The target price corresponds to a price-to-earnings ratio of 10.5x for 2024 and 8.6x for 2025 [5].

Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD.US) with a target price of $142.40, representing a potential upside of 37% from the current price of $104.09 [3][5]. Core Insights - The domestic e-commerce sector is focusing on high-quality development, with a 3.2% year-on-year growth in retail sales of consumer goods in the first three quarters of 2024, and a 7.9% increase in online retail sales of physical goods [1]. - Pinduoduo is expected to continue supporting merchants through fee reductions and increased subsidies to maintain price competitiveness, which may impact short-term monetization and profit margins [1]. - The report anticipates that tariffs could negatively affect Temu, with projected global sales of $48 billion in 2024, as external factors may accelerate tariff-related risks [1]. Financial Summary - For Q3, Pinduoduo reported revenues of 99.354 billion RMB, a year-on-year increase of 44%, but below market expectations. Online marketing services revenue was 49.351 billion RMB, up 24% year-on-year, while transaction services revenue reached 50.003 billion RMB, up 72% year-on-year [2]. - Operating profit for the quarter was 29.292 billion RMB, with an operating margin of 24.5%, reflecting a 9 percentage point decline from the previous quarter [2]. - The company’s net profit was 24.981 billion RMB, a 61% increase year-on-year, resulting in a net margin of 25.1% [2]. Revenue and Profit Forecast - The revenue forecast for Pinduoduo has been adjusted to 409.1 billion RMB for 2024, 522.3 billion RMB for 2025, and 627.3 billion RMB for 2026, with corresponding operating profits of 113.3 billion RMB, 134.5 billion RMB, and 168.5 billion RMB respectively [3][4]. - The earnings per ADS are projected to be 83.0 RMB for 2024, 99.8 RMB for 2025, and 124.0 RMB for 2026 [3][4]. Market Position and Competition - The report highlights that the competition among platforms is intensifying, focusing on price competitiveness, user experience, and growth quality [1]. - Pinduoduo is expected to increase its subsidy efforts in Q4 to maintain its competitive edge in pricing [1].

Core Insights - The investment strategy focuses on acquiring strong businesses when they are undervalued, emphasizing the importance of quality and price in investment decisions [1] - The portfolio has evolved through various industries, including technology, banking, and emerging markets, with a current emphasis on high-quality businesses and expanding knowledge of their competitive advantages [1] - The investment philosophy is influenced by notable investors and CEOs, highlighting the significance of learning from successful figures in the industry [1] Investment Strategy - The approach prioritizes large tech companies with extensive user bases and content libraries, recognizing the potential for cross-selling opportunities [1] - Valuation is conducted at the EBIT plus R&D level, reflecting a belief in the potential of certain R&D investments [1] - The investment performance from February 2019 to October 2024 shows an annual return of 11.4% CAGR, which is below the market's 15.18% CAGR, but there is confidence in future outperformance due to enhanced knowledge [1] Portfolio Management - The strategy aims to minimize portfolio turnover, with a focus on holding existing investments rather than frequent buying and selling [1] - The investment philosophy rejects traditional "Buy" and "Sell" recommendations, advocating for a "Strong Buy" threshold for exceptional businesses and categorizing others as "Strong Sell" to free up capital for new opportunities [1] - A "Hold" position may be initiated for high-quality businesses if their pricing is not favorable [1]

Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD) [4][8][18] Core Insights - Pinduoduo reported Q3 2024 revenue of RMB 99.4 billion, a 44% year-on-year increase, with operating profit rising 46% to RMB 24.3 billion and non-GAAP net profit increasing 61% to RMB 27.5 billion [4][12][18] - The company has implemented a RMB 10 billion merchant support policy to enhance ecosystem optimization, which has temporarily impacted commission income growth [5][13][18] - Pinduoduo's gross profit for Q3 2024 was RMB 59.6 billion, with a gross margin of 60.0%, reflecting a slight decline [6][14] - The Temu platform has expanded into over 70 countries, achieving significant user growth and sales, becoming the second most visited e-commerce site globally [7][17][18] Financial Data and Profit Forecast - For 2024, Pinduoduo's projected revenue is RMB 395.7 billion, with a year-on-year growth rate of 59.77% [9][22] - Non-GAAP net profit is forecasted to reach RMB 123.5 billion in 2024, with continued growth expected in subsequent years [9][18]

Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD) [4] Core Insights - In Q3 2024, Pinduoduo achieved revenue of 99.35 billion yuan, a year-over-year increase of 44.3%, but fell short of consensus expectations by 3.4% due to lower-than-expected transaction service revenue [1] - Non-GAAP net profit reached 27.46 billion yuan, reflecting a year-over-year growth of 61.3%, but also below consensus expectations by 6.0% [1] - The report forecasts revenues for 2024, 2025, and 2026 to be 393.4 billion yuan, 500.8 billion yuan, and 606.2 billion yuan respectively, with corresponding Non-GAAP net profits of 115.8 billion yuan, 144.2 billion yuan, and 171.8 billion yuan [2][4] Revenue and Profitability Analysis - Q3 2024 online marketing revenue was 49.35 billion yuan, up 24.3% year-over-year, exceeding consensus expectations by 0.7% [1] - Transaction service revenue was 50.0 billion yuan, a year-over-year increase of 71.5%, but fell short of expectations by 5.7% due to unexpected supply-side support measures [1] - Gross profit for Q3 2024 was 59.65 billion yuan, with a gross margin of 60.0%, which was below consensus expectations by 2.1 percentage points [1] Cost and Expense Overview - Operating costs and sales expenses exceeded expectations, leading to a significant decline in net profit margin [1] - Sales expenses were 30.48 billion yuan, a year-over-year increase of 40.2%, higher than consensus expectations by 1.0% [1] - Management expenses were 1.81 billion yuan, reflecting a year-over-year increase of 138.1%, slightly below expectations [1] Financial Projections - The report projects a Non-GAAP EPS of 12.21, 20.85, and 26.10 for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 9.0, 7.2, and 6.1 [2][4] - The expected growth rates for revenue and Non-GAAP net profit are 58.88% and 70.75% for 2024, respectively [12]

Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD NASDAQ) [2] Core Viewpoints - Pinduoduo's Q3 2024 performance fell short of expectations due to slower monetization rate growth in the domestic market and adjustments in commission policies [3] - Revenue for Q3 2024 was RMB 99 4 billion, up 44% YoY but below Bloomberg consensus of RMB 102 8 billion [3] - Non-GAAP net profit for Q3 2024 was RMB 27 5 billion, up 61% YoY but below Bloomberg consensus of RMB 29 2 billion [3] - The company's future valuation recovery depends on the accelerated profitability improvement of TEMU [2] Financial Performance - Online marketing revenue for Q3 2024 was RMB 49 4 billion, up 24% YoY, with GMV growth and monetization rate potentially slowing due to intense domestic e-commerce competition [3] - Transaction revenue for Q3 2024 was RMB 50 billion, up 72% YoY, with slower growth attributed to domestic competition and reduced service fees [3] - Gross margin for Q3 2024 was 60%, down 1 0pct YoY and 5 3pct QoQ, influenced by the rising proportion of TEMU revenue [3] - Marketing expense ratio for Q3 2024 was 30 7%, down 0 9pct YoY but up 3 9pct QoQ, reflecting increased investment in specific categories to maintain price advantages [3] Future Outlook - Short-term profit fluctuations are expected due to intensified domestic competition and increased overseas uncertainties [4] - Long-term growth potential remains, with user loyalty and low-price offerings providing a competitive edge, though domestic GMV growth may align with industry averages [4] - TEMU's semi-hosted model expansion is expected to significantly reduce losses [4] Financial Projections - Revenue for 2024E is projected at RMB 400 813 billion, with a YoY growth of 61 9% [6] - Non-GAAP net profit for 2024E is projected at RMB 115 639 billion, with a YoY growth of 70 3% [6] - Gross margin for 2024E is expected to be 62 0%, with net margin at 28 9% [6] - EPS for 2024E is projected at RMB 21 8, with a P/E ratio of 9 1x [6] Valuation - Current stock price is USD 104 09, with a market cap of USD 144 555 billion [2] - The stock's 2024-2026 P/E ratios are projected at 9 1x, 7 0x, and 5 4x respectively [2]

Core Viewpoint - The company remains optimistic about PDD (NASDAQ: PDD) despite a 15% decline in share price following the 3Q24 earnings report, where revenue slightly missed consensus expectations [1]. Group 1: Company Performance - PDD's revenue in 3Q24 did not meet consensus estimates, leading to a pullback in share price [1]. - Management's commentary during the quarter suggested implicit guidance regarding competitive dynamics in the market [1]. Group 2: Investment Insights - Astrada Advisors emphasizes actionable recommendations to enhance portfolio performance and identify alpha opportunities, leveraging a strong track record in investment research [1]. - The firm specializes in technology, media, internet, and consumer sectors across North America and Asia, focusing on high-potential investments and complex industry navigation [1]. - The research integrates fundamental analysis with data-driven insights, providing a comprehensive understanding of key trends, growth drivers, and competitive landscapes [1].