【行业研究报告】拼多多-Strong revenue and earnings growth

29Nov2022
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Pinduoduo(PDDUS)
Strongrevenueandearningsgrowth
Pinduoduo(PDD)announced(28November)3Q22results:revenuewasup65%
YoYtoRMB35.5bn,21/15%higherthanour/Bloombergconsensusestimates,
whichweattributetoincreaseinmerchantactivitiesandonboardingofmore
qualitymerchantsthatdrovestronger-than-expectedmonetizationrate
expansion,����������������������userbase,anditsenhancedtechnology
capabilitythatdrovebettermatchbetweenproductsandconsumers.Non-GAAP
netincomeattributabletoPDDwasRMB12.4bn(3Q21:3.2bn),beating
our/consensusestimatesofRMB7.5/7.1bn,givenbetter-than-expectedGPMand
stronger-than-expectedoperatingleverageaidedbyrobustrevenuegrowth.
Leveraginghighlystickyuserbase,PDDisabletomanagesalesandmarketing
spendinginanefficientandmoreproactiveway.Wethinkrobustprofitabilityfor
itsmainapp���������������������������������������������������������������
groceryandmanufacturingcategories,whilethekeytowatchisthepaceof
investmentforinternationalcommerce.
3Q22revenuebeat,drivenbyincreasingmerchantandconsumer
engagement.Onlinemarketingservicesandothersrevenueroseby58%
engagement.Onlinemarketingservicesandothersrevenueroseby58%
YoYtoRMB28.4bnin3Q22(80%oftotalrevenue;ourestimate:
RMB23.1bn),drivenbyincreaseinmerchantactivities,andmoresubsidies
providedbyPDDtodriveformoreconsumption.Managementhighlightedon
conferencecallthatPDDcontinues��������������������������������������
high-qualityandvalue-for-moneyproducts,andproductcategoriessuchas
agriculture,consumerelectronics,beauty&cosmeticsallenjoyedpositive
consumerfeedbacks.Thestrategicmovetoincorporatemorebranded
productsandhighaveragesellingprice(ASP)categoriescouldhelpdrive
higherthanindustryaverageGMVgrowthin2023E,inourview.In3Q22,
transactionservicesrevenuegrewby102%YoYtoRMB7.0bn,whichwe
attributetoincreaseintransactionprocessingfeesandmorediverseservices
providedtomerchants.
StrictROItargetleadstoacontrolledinvestmentpaceinthenearterm
anddrovemarginbeat.��������Mroseto79.1%in3Q22(3Q21:69.5%;
2Q22:74.7%),6.1ppbetterthanourforecast,whichweattributetostronger-
than-expectedrevenuegrowth.Non-GAAPS&MexpenseswereRMB13.4bn
in3Q22,equivalentto37.9%oftotalrevenue(3Q21:44.9%,2Q22:34.4%),
betterthanourestimateat41.0%.P����������������-GAAPOPMwas34.6%
in3Q22(3Q21:15.2%;2Q22:33.5%),aheadofourestimateof23.0%.
Managementstatedthathighprofitabilitythisquarterisduetotheoutofsync
betweenbusinesscycleandfinancialrecordingcycleandmaynotbe
sustainable,andmanagementremainscommittedininvestmenttodrivefor
long-termgrowth,whilewillkeepastrictROItargetatthesametime.������
strongprofitabilitycouldsustainuntilitbecomesmoredeterminedin
investmentinnewinitiativesthatcouldsupportlong-termrevenueand
earningsgrowth,andinternationale-commerceisthekeytowatch,inour
view.