Citi raised the firm’s price target on PDD Holdings to $125 from $110 and keeps a Buy rating on the shares after its Q2 earnings beat. The analyst states that the fast expansion and rapid GMV ramp of Temu, as well as effective domestic consumption stimulus coupon/voucher during seasonal promotional period, contributed to higher than expected revenue growth. Heading into Q3, the continued ramp of Temu is likely to offset slowdown of Duoduo Grocery while online marketing service revenues are likely to sustain fast growth momentum thanks to improving realization rate from ad budget shifting to PDD’s domestic platform, the firm added.
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