External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>PDD Holdings (PDD) announced (23 May) 1Q23 results: revenue was up 58.2% YoY to RMB37.6bn, 15/17% ahead of our/Bloomberg consensus estimates, which we attributable to robust GMV growth, and increase in monetization.</li><li>The stronger-than-expected revenue growth propelled better-than-expected operating leverage and drove a beat on earnings.</li><li>Non-GAAP net income increased by 141.1% YoY to RMB10.1bn, 69% ahead of consensus.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PDD Holdings (PDD) announced (23 May) 1Q23 results: revenue was up 58.2% YoY to RMB37.6bn, 15/17% ahead of our/Bloomberg consensus estimates, which we attributable to robust GMV growth, and increase in monetization.The stronger-than-expected revenue growth propelled better-than-expected operating leverage and drove a beat on earnings.Non-GAAP net income increased by 141.1% YoY to RMB10.1bn, 69% ahead of consensus.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PDD Holdings (PDD US) – Core Business Delivered Quality Growth

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pdd-holdings-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">PDD Holdings Inc (PDD US)</a> shares rose 19% on last Friday following 1Q23 revenue of RMB 37.6bn (consensus: RMB 31.9bn) and OP of RMB 6.9bn (consensus: RMB 5.0bn).</li>
<li>The declining margin trend is a significant concern as Pinduoduo won't appear cheap if margins fall short of expectations.</li>
<li>Meanwhile, the existence of Temu could be at risk if the US government takes measures to address the De minimis loophole.</li>
</ul>



PDD Holdings Inc (PDD US) shares rose 19% on last Friday following 1Q23 revenue of RMB 37.6bn (consensus: RMB 31.9bn) and OP of RMB 6.9bn (consensus: RMB 5.0bn).
The declining margin trend is a significant concern as Pinduoduo won't appear cheap if margins fall short of expectations.
Meanwhile, the existence of Temu could be at risk if the US government takes measures to address the De minimis loophole.


Pinduoduo: Margin Downtrend and Temu's De Minimis Risk

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.

<ul>
<li>In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.</li>
<li>We believe the company benefited from its low-price products and the low comparison base last year.</li>
<li>We conclude the stock has an upside of 40% and a price target of US$100.</li>
</ul>


In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.
We believe the company benefited from its low-price products and the low comparison base last year.
We conclude the stock has an upside of 40% and a price target of US$100.


Pinduoduo (PDD): 1Q23, Up by 58% YoY, 40% Upside

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>The odds are high for PDD to miss consensus for 1Q results this Friday due to high base and deflating domestic growth drivers, despite TEMU's momentum.</li>
<li>Among major China tech companies, PDD is likely to be the only one to register stagnant or even negative earnings growth for FY23, which has not been in the price.</li>
<li>A down cycle for PDD's earnings growth leads us to assign 12x P/E to an estimated non-GAAP net profit of RMB39 billion for FY23, implying 15% downside. </li>
</ul>


The odds are high for PDD to miss consensus for 1Q results this Friday due to high base and deflating domestic growth drivers, despite TEMU's momentum.
Among major China tech companies, PDD is likely to be the only one to register stagnant or even negative earnings growth for FY23, which has not been in the price.
A down cycle for PDD's earnings growth leads us to assign 12x P/E to an estimated non-GAAP net profit of RMB39 billion for FY23, implying 15% downside. 


Pinduoduo(PDD US): The Worst Is yet to Come

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

Horizon Construction Development / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a> raised around US$210m in its Hong Kong IPO.</li>
<li>HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.</li>
<li>In this note, we will talk about the trading dynamics and valuation.</li>
</ul>



Horizon Construction Development (1887128D HK) raised around US$210m in its Hong Kong IPO.
HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.
In this note, we will talk about the trading dynamics and valuation.


Horizon Construction Dev IPO Trading - Subscription Rates Still Weak, Despite Cornerstone Support

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)