Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD) [1] Core Insights - Pinduoduo achieved revenue of RMB 103.99 billion in Q2 2025, a year-on-year increase of 7.1%, aligning with Bloomberg's consensus estimate of RMB 103.98 billion. The Non-GAAP net profit was RMB 32.71 billion, a decrease of 5.0% year-on-year, but significantly above the market expectation of RMB 22.39 billion. The net profit margin stood at 31.5%, down 4.0 percentage points year-on-year [7][12] - Advertising revenue grew significantly by 13.4% year-on-year to RMB 55.7 billion, exceeding market expectations, while commission revenue increased by only 0.7% year-on-year to RMB 48.28 billion, falling short of expectations [14] - The company continues to focus on high-quality development and platform ecosystem construction, implementing measures such as "reduction, support, and governance" across various operational aspects [7][12] Revenue and Profitability - The overall gross margin for Q2 2025 was 55.9%, reflecting a decline of 9.4 percentage points year-on-year and 1.3 percentage points quarter-on-quarter [19] - The report indicates a decrease in sales and management expense ratios, with sales expense ratio at 26.2% (down 0.7 percentage points year-on-year) and management expense ratio at 1.5% (down 0.4 percentage points year-on-year). R&D expense ratio increased to 3.5%, up 0.5 percentage points year-on-year [22] Earnings Forecast and Valuation - The report adjusts the Non-GAAP net profit forecasts for 2025-2027 to RMB 100.40 billion, RMB 126.46 billion, and RMB 152.41 billion, respectively. The corresponding PE ratios for these years are projected to be 12.1, 9.6, and 7.9 times [23] - The report emphasizes the need for continued investment in ecosystem development due to intensified competition in the e-commerce sector [23]

Core Insights - The "6.18" shopping festival marks a critical turning point for e-commerce platforms, shifting towards value-based competition and sustainable development [1] - The relationship between platforms, merchants, and consumers is crucial for the industry's future, with a focus on balancing interests and fostering a high-quality development path [1] Group 1: E-commerce Strategies - Pinduoduo has launched a "100 billion support" plan, committing over 100 billion RMB in resources over the next three years to enhance the e-commerce ecosystem [1] - The emphasis on supporting merchants reflects a strategic pivot from consumer subsidies to merchant empowerment, indicating a balanced relationship among platforms, merchants, and consumers [1] Group 2: Market Dynamics - The county-level market is gaining attention, with projections indicating that the GDP of this market will reach 109.9 trillion RMB this year, contributing over two-thirds of future consumption growth [2] - Data from the "6.18" event shows that county and rural markets have demonstrated strong consumption momentum, with order volume increasing by over 130% and user scale growing by over 140% year-on-year [2] Group 3: Logistics and Regional Development - Pinduoduo's "e-commerce westward" initiative aims to reduce logistics costs by covering the logistics transfer fees for merchants in remote areas like Tibet and Gansu [3] - To unlock the potential of the western market, a comprehensive logistics system and talent development are essential, which will drive sustainable high-quality growth in the e-commerce sector [3]