Opinions
The Panic-Proof Portfolio (Stockchase Research)
PDD Holdings
PDD-Q
TOP PICK
Apr 23, 2024
Stock price when the opinion was issued
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PDD is a Dublin based company that owns two disruptive sizeable Chinese consumer platforms. Revenues grew over 90% last year, generating $9.4 billion. Cash reserves are growing aggressively. It trades at 24x earnings, 7x book, but can justify the valuation based on a 35% ROE. We recommend setting a stop-loss at $100, looking to achieve $170 — upside potential over 40%. Yield 0%
(Analysts’ price target is $170.29)As revenues surged by over 130% in recently reported earnings, we reiterate PDD as a TOP PICK. The discount retailer in the Chinese market is seeing good market gains and is prepared for the mid-season "618" shopping festival there. It trades 20x earnings and supports a robust 47% ROE. We recommend trailing up the stop (from $110) to $118 at this time, looking to achieve $206 -- upside potential of 35%. Yield 0%
(Analysts’ price target is $206.80)Our PAST TOP PICK with PDD has triggered its stop at $125. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 4%, when combined with our previous recommendations.
We reiterate this disruptive e-commerce platform as a TOP PICK. It trades at 21x earnings and supports a robust 39% ROE. We like that cash reserves are growing rapidly and the company continues to invest in technology enhancements. We recommend trailing up the stop (from $100) to $110, looking to achieve $179 -- upside potential of 38%. Yield 0%
(Analysts’ price target is $179.14)