Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>Both advertising revenue and commission revenue grew dramatically in 4Q23.</li>
<li>Chinese consumers are seeking low price goods, after the economy went weak.</li>
<li>PDD’s overseas brand, TEMU, is expanding rapidly in the U.S.</li>
</ul>


Both advertising revenue and commission revenue grew dramatically in 4Q23.
Chinese consumers are seeking low price goods, after the economy went weak.
PDD’s overseas brand, TEMU, is expanding rapidly in the U.S.


PDD (PDD): 4Q23, Time for Low Price Goods, Revenue up by 123% YoY

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.</li>
<li>13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%</li>
<li>New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.</li>
</ul>


Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.
13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%
New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.


Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>We see further upside to our previous above-consensus 4Q23 results estimates on low base, enhanced monetization, and faster TEMU expansion.</li>
<li>That said, we believe market focus already shifted to outlook for 2024, in particular an imminent slowdown in 1Q24 and renewed concern around US curb on TEMU.</li>
<li>30% share price correction is pricing in the above scenario and valuation should gradually improve as PDD delivers back-loaded bottom line growth in 2024.</li>
</ul>


We see further upside to our previous above-consensus 4Q23 results estimates on low base, enhanced monetization, and faster TEMU expansion.
That said, we believe market focus already shifted to outlook for 2024, in particular an imminent slowdown in 1Q24 and renewed concern around US curb on TEMU.
30% share price correction is pricing in the above scenario and valuation should gradually improve as PDD delivers back-loaded bottom line growth in 2024.


Pinduoduo (PDD US): Pricing in an Imminent Slowdown

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>We expect PDD to report CY4Q23 top-line and non-GAAP net income 14.3% and 21.2% vs. consensus. Main model changes are increased Temu revenue per order and PDD take-rate;</li>
<li>Temu continued increasing prices despite the holiday shopping season, and merchants reported that Temu began charging service fees. PDD upgraded its ads tools, which we expect boosted China take rate.</li>
<li>We maintain our BUY rating and raise our TP to US$ 178.</li>
</ul>


We expect PDD to report CY4Q23 top-line and non-GAAP net income 14.3% and 21.2% vs. consensus. Main model changes are increased Temu revenue per order and PDD take-rate;
Temu continued increasing prices despite the holiday shopping season, and merchants reported that Temu began charging service fees. PDD upgraded its ads tools, which we expect boosted China take rate.
We maintain our BUY rating and raise our TP to US$ 178.


[PDD Holdings Inc. (PDD US, BUY, TP US$178) TP Change]: Fine-Tuned Extraction of Merchant Profits

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<ul>
<li>A recent report shows apparent gains by Temu against US "dollar" store chains</li>
<li>In this insight we introduce the "dollar" store concept and share our experiences</li>
<li>We conclude that Temu &amp; SHEIN don't likely view some categories as priorities</li>
</ul>


A recent report shows apparent gains by Temu against US "dollar" store chains
In this insight we introduce the "dollar" store concept and share our experiences
We conclude that Temu &amp; SHEIN don't likely view some categories as priorities


Temu Versus Dollar Tree: More Online & Offline Adventures in Pursuit of Ultra-Cheap Stuff

China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

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PDD Holdings (PDD US)

PDD (PDD): 4Q23, Time for Low Price Goods, Revenue up by 123% YoY

Both advertising and commission revenues grew dramatically in 4Q23. Chinese consumers are seeking low price goods. PDD’s overseas brand, TEMU, is...

Ming Lu

Pinduoduo, Inc: Rotation Continues

Ownership levels in Pinduoduo Inc, among active Asia Ex-Japan equity funds hit record highs as funds continue to add exposure.

Steven Holden

Pinduoduo (PDD US): Pricing in an Imminent Slowdown

The market is looking beyond strong 4Q23 and pricing in an imminent slowdown in 1Q24 and renewed concern over potential US curb on TEMU. 30% share...

Eric Chen

[PDD Holdings Inc. (PDD US, BUY, TP US$178) TP Change]: Fine-Tuned Extraction of Merchant Profits

PDD expected to report strong earnings with increased revenue and net income, driven by higher Temu revenue and improved take-rate. Analysts...

Blue Lotus Research Institute

Temu Versus Dollar Tree: More Online & Offline Adventures in Pursuit of Ultra-Cheap Stuff

In this insight, we introduce readers to the US "dollar" store concept, then compare our experiences shopping for cheap stuff at Dollar Tree and...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

PDD (PDD): 4Q23, Time for Low Price Goods, Revenue up by 123% YoY

Both advertising and commission revenues grew dramatically in 4Q23. Chinese consumers are seeking low price goods. PDD’s overseas brand, TEMU, is...

Ming Lu

Pinduoduo, Inc: Rotation Continues

Ownership levels in Pinduoduo Inc, among active Asia Ex-Japan equity funds hit record highs as funds continue to add exposure.

Steven Holden

Pinduoduo (PDD US): Pricing in an Imminent Slowdown

The market is looking beyond strong 4Q23 and pricing in an imminent slowdown in 1Q24 and renewed concern over potential US curb on TEMU. 30% share...

Eric Chen

[PDD Holdings Inc. (PDD US, BUY, TP US$178) TP Change]: Fine-Tuned Extraction of Merchant Profits

​PDD expected to report strong earnings with increased revenue and net income, driven by higher Temu revenue and improved take-rate. Analysts...

Blue Lotus Research Institute

Temu Versus Dollar Tree: More Online & Offline Adventures in Pursuit of Ultra-Cheap Stuff

In this insight, we introduce readers to the US "dollar" store concept, then compare our experiences shopping for cheap stuff at Dollar Tree and...

Tracking Traffic

PDD expected to report strong earnings with increased revenue and net income, driven by higher Temu revenue and improved take-rate. Analysts...