PDD(US:PDD) CMS·2025-08-26 03:17Investment Rating - The report maintains a "Strong Buy" rating for the company [4] Core Views - The company reported Q2 2025 revenue of 104 billion yuan, a year-over-year increase of 7.1%, and a Non-GAAP net profit of 32.7 billion yuan, a year-over-year decrease of 5%, exceeding expectations [1][2] - The company is implementing a 100 billion yuan support plan to enhance the health of its merchant ecosystem, which is expected to drive sustainable long-term growth [1][2] - The report expresses optimism about the company's long-term growth potential in both domestic and overseas markets, particularly with the gradual improvement of tariff impacts on TEMU [2] Financial Performance Summary - Q2 2025 revenue was 1040 billion yuan, with advertising revenue at 557 billion yuan (up 13.4% YoY) and commission revenue at 482.8 billion yuan (up 0.7% YoY) [1][5] - The company's gross margin for Q2 2025 was 56%, a decrease of 9.4 percentage points year-over-year [5] - Non-GAAP net profit for Q2 2025 was 32.7 billion yuan, significantly exceeding expectations due to lower-than-expected sales expenses and increased interest and investment income [5] Financial Projections - Expected Non-GAAP net profits for 2025, 2026, and 2027 are projected to be 122.4 billion yuan, 158 billion yuan, and 189.1 billion yuan respectively, with growth rates of 0%, 29%, and 20% [2][3] - The report estimates a target price of $147 to $184 per share based on a 12-15 times PE ratio for 2025 Non-GAAP net profit [2][4] Market Position and Shareholder Information - The company has a total market capitalization of $146.2 billion and a current share price of $127 [4] - Major shareholder Huang Zheng holds a 24.8% stake in the company [4]