PDD(US:PDD)2025-12-01 01:29Summary of PDD Holdings Inc. Conference Call Company Overview - Company: PDD Holdings Inc. (PDD) - Industry: Internet - Current Price: $113.49 (as of November 24, 2025) - Price Target: $130.00 (for December 2026) [1] Key Financial Changes - Adjusted EPS: - 2025E: Increased from RMB 72.08 to RMB 78.61 (+9.1%) [2] - 2026E: Slight increase from RMB 90.25 to RMB 90.31 (+0.1%) [2] - Revenue: - 2025E: Slight increase from RMB 435,205 million to RMB 435,318 million [2] - 2026E: Decrease from RMB 522,794 million to RMB 510,684 million (-2.3%) [2] - Adjusted EBIT: - 2025E: Increased from RMB 102,424 million to RMB 105,994 million (+3.5%) [2] - 2026E: Decreased from RMB 136,608 million to RMB 121,444 million (-11.1%) [2] Quarterly Forecasts - Adjusted EPS Forecasts: - Q1 2025: RMB 11.41 (actual) - Q2 2025: RMB 22.07 (actual) - Q3 2025: RMB 21.08 (actual) - Q4 2025: RMB 24.16 (forecast) [3] Investment Thesis - Concerns: - Slowing growth of core online marketing revenue (OMS) at +8% YoY in Q3 2025 raises questions about PDD's competitiveness in China [8][20] - Margin improvement at Temu is expected to face headwinds due to higher taxation from the EU and China, impacting bottom-line growth [8][20] - Valuation: Current share price downside is protected by low valuation (10x 2025E P/E) and stabilizing earnings [8][20] Performance Drivers - Market and Macro Factors: - Market performance is influenced by regional and macroeconomic factors, with a correlation of 0.73 with MSCI Asia Pac ex JP [16] - Quant Styles: - Value: 12% rank - Growth: 22% rank - Momentum: 30% rank - Quality: 5% rank - Low Volatility: 84% rank [4] Risks to Rating and Price Target - Downside Risks: - Potential profit decline due to increased investments [22] - High tariffs imposed by the US/EU on Chinese products affecting Temu's growth [22] - Deterioration in China’s consumption growth [22] - Upside Risks: - Profit rebound despite management's focus on investments [23] - Favorable tariff announcements from the US [23] - Aggressive stimulus policies from the Chinese government [23] Conclusion - Current Rating: Neutral - Price Target: $130.00 based on 10x 2026E P/E, reflecting concerns over transparency and financial visibility [21]