M Stanley Assumes PDD.US Shr Price to Outperform Mkt in 30 Days

According to the report, PDD's shares have fallen 8% since January, compared with a 2% drop in the MSCI China Index over the same period, as a result of the potential tariff hike by the US on Chinese imports.

However, the broker believed the market may have overreacted, pointing out that PDD's domestic business continued to expand its market share in 4Q23, while its overseas business, Temu, maintained strong growth momentum in GMV, which is likely to reach about US$9 billion.

Morgan reckoned that concerns about the potential impact of the tariff policy on Temu have already been reflected in its share price performance. Considering that its business growth trend remains unchanged, the broker believed that the recent share price decline provides investors with a good opportunity to enter the market, and rated the company Overweight with a target price of US$181.