PDD: Weak Macro And COVID Lockdowns Impact PDD’s 1H2022
PDD will report 1Q22 results on May 27th before the markets open with a 7:30am ET conference call. We are neutral on PDD’s performance in 1Q22 and 2Q22 outlook. China’s economic slowdown worsened in 1Q22 and into April especially with the lockdown in Shanghai and other cities. Consumption in March was much worse than the first two months of 1Q22, and April and May are likely to be even worse than March. As such, we are lowering our estimates for 1Q22 and 2Q22 accordingly. However, we are positive on PDD in the longer term as we believe 1H22 can be the bottom of China’s economy, and the company is likely to benefit from economic recovery in 2H22.
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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