Summary of PDD Holdings Inc (PDD.O) Conference Call Company Overview - **Company**: PDD Holdings Inc (PDD.O) - **Industry**: E-commerce and online marketplace Key Points and Arguments 1. **3Q25 Earnings Expectations**: PDD is expected to report 3Q25 results by the end of November, with potential for better-than-expected profits due to the rebound of Temu sales in the US and continued growth in Europe [1][3][11] 2. **Profitability Management**: Management indicated that the profit levels achieved in 2Q25 are not sustainable due to ongoing commitments to merchant support, suggesting a cautious approach to future earnings expectations [1][2] 3. **Sales Projections**: Total revenues for 3Q25 are projected to increase by 8% year-over-year to RMB 107.0 billion, with online marketplace services expected to grow by 15% year-over-year [3][10] 4. **Temu Performance**: Temu's sales in the US are projected at RMB 37 billion (approximately US$5.19 billion), reflecting a 5% year-over-year decline, but with signs of recovery in user engagement [3][45] 5. **Market Positioning**: PDD's China business is expected to remain resilient, with GMV growth likely outpacing peers due to the absence of a tough comparative base from last year [1][3] 6. **Cost Adjustments**: Adjustments have been made to net interest income and selling & marketing expenses for 2H25 and 2026-27, reflecting a more realistic forecast and diligent cost control [2][10] 7. **Traffic Growth for Temu**: Temu's global monthly active users (MAU) increased by 42% year-over-year to 192 million for iOS and 63% year-over-year to 305 million for Android, with notable growth in the US market [4][37] 8. **Promotional Strategies**: Temu is extending its Black Friday campaign to a 51-day period, focusing on price competitiveness and algorithm-driven product selection [4][33] 9. **Financial Metrics**: Adjusted net profit for 2025 is projected to decline by 5% year-over-year to RMB 106.5 billion, with a net profit margin of 24% [3][10] 10. **Target Price Adjustment**: The target price for PDD has been adjusted to US$167, maintaining a "Buy" recommendation with an expected share price return of 31.1% [6][10] Additional Important Insights 1. **Double 11 Promotions**: PDD's Double 11 Grand Promotion will run from October 16 to November 14, featuring various subsidy games to engage users [14] 2. **Technical Service Fee Adjustments**: PDD is adjusting technical service fee rates for certain categories in its "10 Billion Subsidy" program, indicating a strategic focus on high-profit potential categories [12] 3. **Kuai Tuan Tuan Testing**: PDD is testing a "Meal Ordering" service under its community group buying product, Kuai Tuan Tuan, to enhance user engagement [16] 4. **E-commerce Trends**: The overall online retail sales in China showed a year-to-date growth of 9.6% as of August 2025, indicating a positive trend in the e-commerce sector [23][30] This summary encapsulates the critical insights from the conference call, highlighting PDD's strategic positioning, financial expectations, and market dynamics.