Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD US) with a target price of 104.09 [1][4][10]. Core Insights - The report highlights that the implementation of a 10 billion yuan subsidy policy has led to lower-than-expected commission income and profits, with Q3 performance falling short of expectations primarily due to reduced commission rates [1][2]. - The forecast for 2024 and 2025 profits has been revised down by 5% and 7% respectively, reflecting uncertainties in profit growth and risks associated with overseas tariff policies [1][3]. - The report anticipates continued pressure on commission rates into Q4, which may disrupt profit growth expectations [1][2]. Financial Performance Summary - Q3 revenue increased by 44% year-on-year to 993.5 billion yuan, aligning with expectations but slightly below Bloomberg consensus by 3% [2]. - Adjusted net profit for Q3 was 274.6 billion yuan, a 61% increase year-on-year, but 6% lower than Bloomberg consensus due to higher-than-expected revenue costs [2]. - Advertising and commission revenues grew by 24% and 72% year-on-year respectively, with commission income falling short of Visible Alpha consensus by 5% [2]. - The report projects Q4 adjusted net profit to be 315.8 billion yuan, with a year-on-year profit margin decline of 3 percentage points [2][7]. Earnings Forecast Changes - Revenue forecasts for 2024E and 2025E have been adjusted to 403,922 million yuan and 540,049 million yuan respectively, with minor changes of -0.1% and +0.3% [3]. - Adjusted net profit forecasts for 2024E and 2025E are now 124,076 million yuan and 156,038 million yuan, reflecting downward adjustments of -5.2% and -7.5% [3][14]. - The adjusted operating profit margin is expected to decline, with projections of 30.1% for 2024E and 29.6% for 2025E [3][14]. Market Position and Competitive Landscape - The report notes that recent domestic appliance subsidy policies favor e-commerce platforms primarily operating through official flagship stores, which may require the company to increase subsidies to maintain competitive pricing [2][5]. - The company is expected to continue strategic support for quality merchants, which will involve sustained investment impacting Q4 profits [2][5].
拼多多：百亿减免政策落地导致佣金收入及利润不及预期，预计投入持续