EUR 227.58 For Business Accounts Only

PDD: Overseas Expansion Serves As A New Growth Driver In Addition To Possible Longer-Term Better Performance In China Supported By Economic Stimulus

We are positive on PDD’s performance in 2Q23 and outlook for 2023. The long-awaited economic stimulus policies have started to come out since late July 2023. On June 25th, the State Think Tank CMF released its paper “Solidifying Foundation for Recovery, China’s Macroeconomy in 2023”. The paper not only pointed out 5 main issues but also emphasized that these issues cannot be resolved by themselves and need state driven stimulus. We believe the paper has set up the direction for the stimulus. On July 24^th, the Political Bureau of the CPC Central Committee held a meeting analyzing the current economic situation and pointing out the direction and framework for economic stimulus. In the past week after this meeting, we have already witnessed the positive reaction in China market. We believe the stimulus is likely to provide a supporting floor to consumption growth in China. In addition to the overall longer-term support from the stimulus, PDD’s overseas business is becoming a new growth driver with rapid expansion from operating in the US in November 2022 to more than 10 different developed countries. In each country that it has entered, PDD has become the top downloaded APP.