PDD's Margin Pressure Likely to Ease in Coming Quarters -- Market Talk

Dow Jones

Nov 22, 2024

0801 GMT - The pressure on PDD Holdings' margins from heavy spending to support merchants will likely be temporary, Nomura analysts Jialong Shi and Rachel Guo say in a research note. Such heavy expenditure is unusual and could be linked to the merchants' demonstration in July, they say, referring to the incident when a throng of Chinese merchants who supply Temu protested in China over "unfair penalties." PDD likely offered certain one-off compensation to calm the situation, the analysts add. While the company has cautioned that investment to support merchants, such as reducing some platform fees, could affect profitability, Nomura thinks the scale of these expenditures may be reduced in the coming quarters. The analysts keep a buy rating but lower the target price on ADRs to $137.00 from $164.00. PDD closed 11% lower at $104.09 on Thursday. (tracy.qu@wsj.com)

(END) Dow Jones Newswires

November 22, 2024 03:01 ET (08:01 GMT)

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Such heavy expenditure is unusual and could be linked to the merchants' demonstration in July, they say, referring to the incident when a throng of Chinese merchants who supply Temu protested in China over \"unfair penalties.\" PDD likely offered certain one-off compensation to calm the situation, the analysts add. While the company has cautioned that investment to support merchants, such as reducing some platform fees, could affect profitability, Nomura thinks the scale of these expenditures may be reduced in the coming quarters. The analysts keep a buy rating but lower the target price on ADRs to $137.00 from $164.00. PDD closed 11% lower at $104.09 on Thursday. (tracy.qu@wsj.com) \n</p>\n<pre>\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  November 22, 2024 03:01 ET (08:01 GMT)\n</p>\n<p>\n  Copyright (c) 2024 Dow Jones &amp; Company, Inc.\n</p>\n</font>","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>PDD's Margin Pressure Likely to Ease in Coming Quarters -- Market Talk</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPDD's Margin Pressure Likely to Ease in Coming Quarters -- Market Talk\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2024-11-22 16:01</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<font class=\"NormalMinus1\" face=\"Arial\">\n<p>\n     0801 GMT - The pressure on PDD Holdings' margins from heavy spending to support merchants will likely be temporary, Nomura analysts Jialong Shi and Rachel Guo say in a research note. Such heavy expenditure is unusual and could be linked to the merchants' demonstration in July, they say, referring to the incident when a throng of Chinese merchants who supply Temu protested in China over \"unfair penalties.\" PDD likely offered certain one-off compensation to calm the situation, the analysts add. While the company has cautioned that investment to support merchants, such as reducing some platform fees, could affect profitability, Nomura thinks the scale of these expenditures may be reduced in the coming quarters. The analysts keep a buy rating but lower the target price on ADRs to $137.00 from $164.00. PDD closed 11% lower at $104.09 on Thursday. (tracy.qu@wsj.com) \n</p>\n<pre>\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  November 22, 2024 03:01 ET (08:01 GMT)\n</p>\n<p>\n  Copyright (c) 2024 Dow Jones &amp; Company, Inc.\n</p>\n</font>\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"PDD","symbol_name":"拼多多","start_time":0,"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","article_id":"2485453280","we_media_id":"106","thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2485453280","pubTimestamp":1732262460,"columns":[],"sourceInfo":null,"weMediaInfo":{"media_name":"Dow Jones","introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"summary":"0801 GMT - The pressure on PDD Holdings' margins from heavy spending to support merchants will likely be temporary, Nomura analysts Jialong Shi and Rachel Guo say in a research note. Such heavy expenditure is unusual and could be linked to the merchants' demonstration in July, they say, referring to the incident when a throng of Chinese merchants who supply Temu protested in China over \"unfair penalties.\" PDD likely offered certain one-off compensation to calm the situation, the analysts add. While the company has cautioned that investment to support merchants, such as reducing some platform fees, could affect profitability, Nomura thinks the scale of these expenditures may be reduced in the coming quarters. The analysts keep a buy rating but lower the target price on ADRs to $137.00 from $164.00. PDD closed 11% lower at $104.09 on Thursday. ","collect":0,"end_time":0,"defaultTopTitle":"","property":[],"viewcount":null,"language":"en","relate_stocks":{"PDD":"拼多多"},"translate_title":"拼多多的利润压力可能会在未来几个季度缓解——市场讨论","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PDD":1},"content_text":"0801 GMT - The pressure on PDD Holdings' margins from heavy spending to support merchants will likely be temporary, Nomura analysts Jialong Shi and Rachel Guo say in a research note. Such heavy expenditure is unusual and could be linked to the merchants' demonstration in July, they say, referring to the incident when a throng of Chinese merchants who supply Temu protested in China over \"unfair penalties.\" PDD likely offered certain one-off compensation to calm the situation, the analysts add. While the company has cautioned that investment to support merchants, such as reducing some platform fees, could affect profitability, Nomura thinks the scale of these expenditures may be reduced in the coming quarters. The analysts keep a buy rating but lower the target price on ADRs to $137.00 from $164.00. PDD closed 11% lower at $104.09 on Thursday. (tracy.qu@wsj.com) \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  November 22, 2024 03:01 ET (08:01 GMT)\n\n\n  Copyright (c) 2024 Dow Jones & Company, Inc.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":true,"code":"91000000","status":"200"}}}