PDD: Subsidization Program Driving Revenue Growth; Expect 4Q19 Revenue To Be Better Than Consensus
PDD will report 4Q19 results on March 11th before the markets open with a 7:30am EST conference call. Based on our data and model, PDD’s total revenue in 4Q19 is likely to be above consensus at RMB10,920M (93.1% Y/Y growth) with a take rate assumption of 3.01%, unchanged from 3Q19, and 3.11% in 2Q19. We estimate that sales & marketing in 4Q19 is likely to be in the range of RMB8.8B to RMB9.1B with brand advertising relatively flat Q/Q, performance based at 35% - 37% Q/Q growth and subsidizations at 28% - 32% Q/Q growth. Impacted by an earlier CNY, GMV in January 2020 is likely to grow 23% Y/Y, and the coronavirus outbreak will impact PDD’s February sales the most.
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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