PDD(US:PDD) Huaan Securities·2024-05-26 01:31Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company's Q1 2024 performance significantly exceeded expectations, with net profit more than doubling year-on-year. Revenue reached 868.12 billion CNY, a year-on-year increase of 131%, surpassing Bloomberg's consensus estimate by 12.9% [18] - The company's transaction service revenue grew over three times, driven primarily by the expansion of Temu in overseas markets, which has become the most important revenue source [18] - The company is expected to maintain high revenue growth potential in the long term, with projected revenues of 4342 billion CNY, 5345 billion CNY, and 6213 billion CNY for 2024, 2025, and 2026 respectively [18] Financial Performance Summary - For 2023, the company reported operating revenue of 247,639 million CNY, with a year-on-year growth rate of 89.68%. The adjusted net profit for 2023 was 67,899 million CNY, reflecting a year-on-year increase of 71.8% [12][11] - The gross profit margin is projected to be 63.0% in 2023, decreasing to 59.7% by 2026 [12] - The return on equity (ROE) is expected to be 32.1% in 2023, declining to 25.7% by 2026 [12] Cash Flow and Investment - The net cash flow from operating activities for 2023 was 94,162 million CNY, with projections of 217,765 million CNY for 2024 [14] - The company is expected to see improvements in profit margins as it optimizes its cost structure, particularly in marketing and logistics [18] Key Financial Ratios - The company's asset-liability ratio is projected to decrease from 46.21% in 2023 to 24.30% in 2026, indicating improved financial stability [25] - The current ratio is expected to increase from 1.93 in 2023 to 4.02 in 2026, suggesting enhanced liquidity [25]