PDD(US:PDD) SPDB International·2025-11-19 11:02Investment Rating - The report maintains a "Hold" rating for Pinduoduo (PDD.US) with a target price of $123, indicating a potential upside of 3% from the current price of $119.58 [1][2][8]. Core Insights - Pinduoduo's revenue growth has stabilized, with a 9% year-on-year increase in Q3 2025, primarily driven by record high transaction service revenue, which grew by 10% [8]. - Adjusted net profit for Q3 2025 was 314 million RMB, exceeding market expectations of 251 million RMB, reflecting a 14% year-on-year growth [8]. - The company is cautious about future guidance, indicating that ongoing investments may lead to profit volatility [8]. Financial Performance Summary - Revenue Forecasts: - FY23: 247,639 million RMB - FY24: 393,836 million RMB - FY25E: 430,832 million RMB - FY26E: 480,330 million RMB - FY27E: 548,415 million RMB [2][9]. - Profitability Metrics: - Operating profit for FY25E is projected at 94,679 million RMB, with an adjusted net profit of 109,881 million RMB [2][9]. - The adjusted net profit margin for Q3 2025 was 29.0%, slightly down from 31.5% in Q2 2025 [8]. - Valuation Ratios: - The adjusted target P/E ratio for FY25E is set at 12x, with a projected decline to 9.1x by FY27E [2][9]. Market Expectations - The report indicates a cautious outlook for Pinduoduo, with short-term catalysts lacking for revenue growth, suggesting that the company may align more closely with overall market growth rates [8].