PDD 2Q25 Results: Profitability to Fluctuate in the Coming Quarters
What’s new: PDD’s reported 2Q25 revs that were largely in-line with consensus but below our expectations. While margins came in better than expected, PDD cautioned that profitability could continue to fluctuate in the coming quarters. The company is also willing to accept lower profits to consistently reinvest in the platform ecosystem in the long run. Despite attractive valuation (11.2x FY26E P/E), top-line face limited upside to current estimates amid intense competition in the domestic market and regulatory uncertainties in the overseas market. Visibility on margins also remains limited amid continued investments in the platform ecosystem. Hence, we downgrade the stock from BUY to NEUTRAL rating. We maintain our PT at US$120.Analysts:
Jin Yoon
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