[Reward] A forward-looking chart: Pinduoduo's performance is about to be released! Temu's monthly active users increase significantly, and institutions are increasing their holdings. Can the performance once again exceed expectations?

On May 22 (Wednesday),$PDD Holdings (PDD.US)$the performance for the first quarter of 2024 will be announced.Since 2024, PDD's stock price has been volatile. As of the close of the U.S. stock market on May 16, PDD has fallen 2% year-to-date, with the latest closing price at $143.38 per share.

For the upcoming first quarter performance of 2024,the market generally predicts that PDD will achieve a revenue of 76.56 billion yuan for the first quarter, a year-on-year increase of 103.42%; and an expected EPS of 10.41 yuan, a year-on-year increase of 87.61%.Recently, 12 analysts have rated the stock, with an average target price of $182.78, which means there is still around 27.5% upside potential compared to the current price.

Last quarter, PDD released an impressive quarterly report that exceeded Wall Street expectations across the board. While achieving a doubling of revenue to 88.88 billion yuan, the operating profit also achieved a year-on-year increase of 146%. West Securities believes that the cross-border e-commerce market is growing rapidly, with export e-commerce taking the lead, and there will still be new breakthroughs in the future.

Looking ahead to the first quarter performance,Bloomberg analysts predict that PDD's online marketing and other income will increase by over 38% year-on-year, while transaction service income will increase significantly by 267%. However, putting aside the impressive year-on-year data, Bloomberg predicts a decline in revenue on a quarterly basis for its two main businesses. Online marketing and other income are expected to decrease by 22.7% quarter-on-quarter, and transaction service income is expected to decrease by about 5% quarter-on-quarter.

Of course, what everyone is more concerned about is the growth rate of PDD's cross-border e-commerce business, Temu.According to Sensor Tower data, Temu application's global monthly active users in the first quarter increased by 614% year-on-year, reaching 0.167 billion. Among them, the monthly active users in the United States increased by 134% to reach 50.4 million people.

In recent years, Alibaba, PDD Holdings, JD.com, ByteDance and other e-commerce platforms have intensified their efforts in cross-border e-commerce business, and the competition has become increasingly fierce. According to data from the Ministry of Commerce, the proportion of cross-border e-commerce in China's domestic goods trade has increased from 1% in 2015 to 5% in 2022.

According to the research report of Western Securities, the cross-border e-commerce market is showing a global growth trend, with Amazon and the European and American regions as the main layout directions. The scale of the cross-border e-commerce market is increasing day by day, with export e-commerce taking the dominant position, and there will still be new breakthroughs in the future. The increase in global e-commerce penetration rate, supply chain advantages, and policy benefits will drive the rapid growth of cross-border e-commerce.

Temu has long been at a high position in terms of global downloads and has quickly expanded its global sites (as of December 2023, it has 48 sites). The high traffic and multiple sites have contributed to Temu's exponential growth in GMV.By the end of 2023, Temu has set a target to double its GMV, reaching 30 billion US dollars.

According to the research report of China Great Wall Securities, there is still room for further improvement in the overseas online shopping penetration rate, and domestic cross-border export e-commerce is supported by policies, which is expected to maintain high growth. With China's high scale effect, efficient supply chain, and its unique Alpha advantage, Temu is expected to replicate PDD Holdings' success in the domestic market. The bank predicts that Temu's GMV and revenue will achieve high-speed growth, and losses will gradually narrow.

According to the latest news, Temu has been one of the major advertisers on Facebook.According to sources related to Meta, PDD Holdings is currently shifting its business focus to areas outside of the United States to respond to US policy risks and seek other sources of growth. It is reported that Temu's sales in the United States this year are expected to decrease to less than one-third, compared to 60% last year.

Bullish sentiment is strong! Top institutions are all betting on PDD Holdings.

Bank of America maintains a "buy" rating for PDD Holdings and raises the target stock price from $182 to $191.Due to the outstanding domestic profit performance, the company has raised its revenue expectations for 2024 and 2025 by 6% and 15% respectively, and its non-GAAP net profit expectations by 16% and 20% respectively.

In addition, according to the disclosure information of the first quarter Form 13F,Billionaire investor and founder of Appaloosa Asset Management, David Tepper, has a strong preference for Chinese assets and has significantly increased his shareholding of PDD Holdings by 1.33 million shares.

In addition to Appaloosa, Goldman Sachs also increased its shareholding of PDD Holdings by over 5.54 million shares in the first quarter, an increase of 101%. HHLR Advisors, a subsidiary of GGV Capital, increased its holdings of PDD Holdings by 1.6806 million shares, bringing the total number of shares held to 11.79 million shares, accounting for 25.28% of the total holdings and ranking first.At the same time, PDD Holdings is also the largest weighted stock in Hillhouse's portfolio and the second largest holding of Jinglin Fund.

How has the stock price performed in previous earnings?

根據Market Chameleon，回測過去12個季度業績日，拼多多在業績發佈當天上漲概率較大，股價平均變動爲±13.5%，最大跌幅爲-15.9%，最大漲幅爲+22.2%。該股在去年四次季績日中表現較好，均錄得績後收漲，四次分別收報+3.5%、+18.1%、+15.4%With19%.

Currently, the implied volatility of PDD is±9%, indicating a single-day price fluctuation in the options market, reaching9%; in comparison, the average stock price change after PDD's previous 4 quarters was±14%, indicating that the current options value of the stock is being undervalued.

Based on the skewness of volatility, the current market tends to slightly bullish.

Mooers,

Do you have a positive outlook on pdd holdings' first-quarter performance?

Feel free to predict the percentage increase or decrease in performance together.

Is it a increase of more than 5%, normal performance (-5% to 5%), or a drop of more than 5%? Mooer who predicts correctly will receive 66 points, and the activity rewards will be distributed uniformly after the end of this financial report season!

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