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

Equity Bottom-Up

<ul>
<li>PDD reported C3Q23 top-line, non-GAAP EBIT, and GAAP net profit 9%, (4%) and in-line vs. our estimate, and 28%, 29%, and 42%, vs. consensus respectively.</li>
<li>We estimate that Temu reached positive gross profit for the first time in 3Q, one quarter ahead of our prior estimate.</li>
<li>We believe increased prices on its US platform was the main driver, while it was able to maintain supply prices.</li>
</ul>


PDD reported C3Q23 top-line, non-GAAP EBIT, and GAAP net profit 9%, (4%) and in-line vs. our estimate, and 28%, 29%, and 42%, vs. consensus respectively.
We estimate that Temu reached positive gross profit for the first time in 3Q, one quarter ahead of our prior estimate.
We believe increased prices on its US platform was the main driver, while it was able to maintain supply prices.


[PDD Holdings (PDD US, BUY, TP US$165) TP Change]: PDD and Temu Growth Tailwinds Will Continue

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>Stock rally on strong revenue growth suggests TEMU will be at center stage of the investment thesis for PDD down the road. </li>
<li>Besides soaring GMV, TEMU achieved blowout performance likely due to much higher-than-expected take-rate and disciplined marketing, resulting in narrower-than-expected losses.</li>
<li>We expect the company's growth will even accelerate in 4Q23 and generate adjusted net profit of US$12 bn for FY24, with a target market cap of US$240 bn (20xPE).</li>
</ul>


Stock rally on strong revenue growth suggests TEMU will be at center stage of the investment thesis for PDD down the road. 
Besides soaring GMV, TEMU achieved blowout performance likely due to much higher-than-expected take-rate and disciplined marketing, resulting in narrower-than-expected losses.
We expect the company's growth will even accelerate in 4Q23 and generate adjusted net profit of US$12 bn for FY24, with a target market cap of US$240 bn (20xPE).


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 3Q23, total revenue surged by 94% YoY, as Temu started operations in nine European countries in August.</li>
<li>Operating profits increased by 60% YoY in 3Q23, so we believe overseas businesses have made profits.</li>
<li>The stock price reached our last target, but we believe there is still an upside of 40% for 2024.</li>
</ul>


In 3Q23, total revenue surged by 94% YoY, as Temu started operations in nine European countries in August.
Operating profits increased by 60% YoY in 3Q23, so we believe overseas businesses have made profits.
The stock price reached our last target, but we believe there is still an upside of 40% for 2024.


PDD (PDD US): 3Q23, Grew Dramatically Overseas, Still Upside After Reaching Our Last Target

<ul>
<li>PDD's small retailers bought out products of direct sales and claimed full refund.</li>
<li>The story happened to Alibaba more than ten years ago.</li>
<li>It can be hard for PDD to enter the high quality market.</li>
</ul>


PDD's small retailers bought out products of direct sales and claimed full refund.
The story happened to Alibaba more than ten years ago.
It can be hard for PDD to enter the high quality market.


Pinduoduo (PDD) Short Review: Third-Party Retailers “Bombarded” Direct Sales

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

PDD Holdings (PDD US)