PDD(US:PDD) Goldman Sachs·2025-05-06 02:43Investment Rating - The report maintains a "Buy" rating for PDD Holdings with a target price (TP) of US$152, unchanged despite recent developments [2][10][12]. Core Insights - The suspension of Temu's full-entrusted model for US shipments is more drastic than previously anticipated, leading to a significant reduction in US GMV estimates [2][19]. - The shift towards local merchants and warehouses is expected to accelerate, particularly in Europe, as Temu adapts to new tariff regulations [2][19]. - The current valuation of PDD at 10X 2025E P/E does not reflect the potential of Temu's global business, indicating a potential undervaluation [2][19]. Financial Projections - Revenue estimates for PDD have been revised downwards by 10% for 2025E, 21% for 2026E, and 22% for 2027E due to the reduction in Temu's GMV forecasts [19]. - The projected global GMV for Temu is now US$50 billion, US$53 billion, and US$70 billion for FY25E, FY26E, and FY27E respectively, compared to previous estimates of US$63 billion, US$84 billion, and US$106 billion [19]. - PDD's overall non-GAAP EBIT changes are minimal, with EPS adjustments ranging from -2% to 1% for 2025E-2027E [19]. Market Dynamics - Temu's online advertising expenditure in the US has been significantly reduced since April, which is expected to positively impact loss margins [2]. - The report notes a decline in Temu app downloads, which have fallen out of the top 50 rankings after consistently being in the top 10 for two years [2]. - The report highlights geopolitical uncertainties affecting investor focus, particularly regarding European de-minimis policies and potential ADR delisting risks [19].