PDD(PDD) Soochow Securities·2025-06-05 08:23Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD) [7][24] Core Views - The company's Q1 2025 performance fell short of expectations, with revenue of RMB 95.67 billion, a year-on-year increase of 10%, but below the Bloomberg consensus estimate of RMB 101.6 billion. Non-GAAP net profit was RMB 16.92 billion, down 45% year-on-year, also below the expected RMB 27.88 billion [12][16] - Pinduoduo is focusing on high-quality platform ecology and supply chain capability construction, emphasizing sustainable development through various measures such as "reduction, support, and governance" [13][16] - The company is implementing a RMB 100 billion support initiative to bolster both merchant and consumer sides, aiming to stimulate demand and assist small and medium-sized businesses [16][24] Summary by Sections Revenue Growth and Ecosystem Development - In Q1 2025, Pinduoduo's advertising revenue reached RMB 48.72 billion, up 15% year-on-year, exceeding market expectations, while commission revenue was RMB 46.95 billion, up 6% year-on-year, but below expectations [12][13] - The company continues to promote its high-quality development strategy and platform ecosystem, leveraging digital advantages to expand "new quality supply" and create a win-win ecosystem for users, merchants, and the platform [13][16] Gross Margin and Profitability Challenges - The gross margin for Q1 2025 was 57.2%, a decrease of 5.1 percentage points year-on-year, indicating short-term profitability challenges [18][21] - The report notes an increase in expenses, with sales expense ratio rising to 34.9%, up 7.9 percentage points year-on-year, while management and R&D expense ratios remained relatively stable [21][24] Earnings Forecast and Investment Rating - Due to increased investments in ecosystem development, the report adjusts the Non-GAAP net profit forecasts for 2025-2027 to RMB 98.55 billion, RMB 130.32 billion, and RMB 153.98 billion, respectively, with corresponding PE ratios of 10.2, 7.7, and 6.5 [24][28]