G Sachs Hikes PDD TP to US$176; Temu Key Surprise

Goldman Sachs wrote in a report that the 3Q results of $PDD Holdings(PDD.US)$ have beaten market expectations, with the main surprise being a 315% YoY jump in transaction services revenue, well above the 175% growth ceiling expected by the market, believed to be due to increased economies of scale from its cross-border e-commerce platform Temu. Online promotion revenue also grew 39% YoY, better than market expectations.

Goldman raised its base case valuation of Temu to US$65 billion from US$37 billion. It also elevated the target price on $PDD Holdings(PDD.US)$ from US$155 to US$176, and rated the company Buy.