Barclays Impressed by Recent Pinduoduo (PDD) Progress - Upgrades to OW
Pinduoduo (NASDAQ: PDD) was upgraded to Overweight from Equal Weight, with its price target raised by 6% to $70 per share from $66 at Barclays.
Analyst Jiong Shao told investors in a note that even though Pinduoduo provides quite limited disclosures, they have been impressed by its recent progress in adding more brands to its platform in China and gaining early traction with its efforts in the US.
"While PDD dominates lower tier city ecommerce market with over 800m active customers, acquired over the last 6-7 years, a key bottleneck for its next stage of growth is a lack of branded products on its platform, which
are what consumers in higher tier cities want to buy. To address this bottleneck, PDD has been actively working with brands and persuading them to open flagship stores on PDD," wrote Shao.
The analyst added that they have noted some encouraging progress on brands opening flagship stores on Pinduoduo in recent quarters.
On entering the US market, the analyst added: "Few Chinese ecommerce companies have achieved meaningful success outside of China with the exception of Shein (private, not covered). Since its launch on Sep 1, PDD's US app / website Temu has gained significant traction, with SKUs up 20x and the Temu app briefly becoming the top downloaded app on the iOS store."
PDD shares are up over 2% Thursday.
By Sam Boughedda