PDD: Benefiting From More Celebration Activities Lead To Increasing Consumption Demand; Positive On 4Q22 Performance and 2023 Outlook
We are positive on PDD’s performance in 4Q22 and its 2023 outlook. We believe PDD can benefit from increasing consumption demand in 1Q23. There are likely to be more events in 1Q23: 1) more Chinese New Year (CNY) celebration activities in 1Q23 than 1Q22 as people are going back to their hometowns to reunite with family, vs. people staying put during 2022’s CNY; 2) more celebratory activities – the Lantern Festival and Valentine’s Day fell on the same day in 2022, but in 2023 it will be two different days. As such, we expect more celebration-related consumptions; 3) in 1Q23, there is one additional holiday. Based on the lunar calendar, there will be two Spring Festivals on January 22nd and February 4th; and 4) the Chinese government is determined to stimulate consumptions with coupons and other measures.
T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.
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