[PDD Holdings Inc. (PDD US, BUY, TP US$95) Earnings Preview]: BUY on Expected Margin Beat

[PDD US]: Slowing Growth but Still Best-In-Class, Cut TP Maintain BUY.

[Pinduoduo (PDD US) Target Price Change]: Cut TP for Higher Losses from Temu

Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<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