On Friday, May 30, China Galaxy International analyst Lei Yang changed the rating for PDD Holdings Inc. (NASDAQ:PDD) from “Add” to “Hold” and lowered the price target from $164 to $112. This adjustment follows the company’s first-quarter earnings report, which showed a 10% increase in revenue year-over-year, which did not meet the firm’s expectations.
A close-up of a customer using the company’s e-commerce platform whilst shopping online.
This weak performance was mainly due to a lower take rate for merchants and a slowdown in activity on the company’s global platform, Temu. China Galaxy International’s analysis pointed out that PDD Holdings Inc. experienced a sharp decline year-over-year in non-GAAP net profit for Q1 2025, which also missed the firm’s forecast. This decline was largely caused by higher sales expenses, which resulted from larger subsidies being given to support the company’s trade-in policy.
Looking ahead, China Galaxy International forecasts that PDD Holdings Inc. will grow its revenue by 9.1% in Q2 2025. However, the firm also expects a significant decline of 24.9% in non-IFRS net profit.
PDD Holdings Inc., formerly Pinduoduo Inc., is a multinational commerce group that owns a portfolio of businesses. It is best known for its e-commerce platforms, Pinduoduo and Temu.
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