Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

<ul>
<li>The "non-business factors" mentioned in <a href="https://www.smartkarma.com/entities/pdd-holdings-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">PDD Holdings (PDD US)</a> 's earnings call likely refer to potential political and policy risks in the U.S. due to the upcoming presidential elections.</li>
<li>Temu, PDD Holdings' global online shopping platform, has become the most downloaded shopping app in the U.S., significantly disrupting the local retail market.</li>
<li>PDD's rapid and disruptive growth has already led to litigation in the US, and political pressure could increase if Donald Trump wins the presidential election.</li>
</ul>


The "non-business factors" mentioned in PDD Holdings (PDD US) 's earnings call likely refer to potential political and policy risks in the U.S. due to the upcoming presidential elections.
Temu, PDD Holdings' global online shopping platform, has become the most downloaded shopping app in the U.S., significantly disrupting the local retail market.
PDD's rapid and disruptive growth has already led to litigation in the US, and political pressure could increase if Donald Trump wins the presidential election.


PDD Holdings (PDD US) : Could U.S. Elections Impact Temu's Dominance?

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pdd-holdings-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">PDD Holdings (PDD US)</a> shares fell 28% on Monday after a 3% revenue miss, with shares dropping an additional 4% yesterday.</li>
<li>The results themselves weren’t bad enough to justify such a sharp price reaction.</li>
<li>However, management’s comments on slower growth and a potential drop in profits triggered a significant sell-off.</li>
</ul>



PDD Holdings (PDD US) shares fell 28% on Monday after a 3% revenue miss, with shares dropping an additional 4% yesterday.
The results themselves weren’t bad enough to justify such a sharp price reaction.
However, management’s comments on slower growth and a potential drop in profits triggered a significant sell-off.


Pinduoduo: Anticipating Slower Growth And Potential Profit Dip

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>PDD reported C2Q24 top line, non-GAAP operating income and GAAP net income (3.9%), (1.2%) and (4.4%) below our estimates, and (2.9%), 12% and 16% above consensus. </li>
<li>We believe PDD's upgrade in its ecosystem and infrastructure is long overdue. Such investment would support its growth, especially in overseas. </li>
<li>Trading at 6.4x 2025 PE, we believe PDD is undervalued. We reiterate BUY and place it as TOP PICK of China's e-commerce sector.</li>
</ul>


PDD reported C2Q24 top line, non-GAAP operating income and GAAP net income (3.9%), (1.2%) and (4.4%) below our estimates, and (2.9%), 12% and 16% above consensus. 
We believe PDD's upgrade in its ecosystem and infrastructure is long overdue. Such investment would support its growth, especially in overseas. 
Trading at 6.4x 2025 PE, we believe PDD is undervalued. We reiterate BUY and place it as TOP PICK of China's e-commerce sector.


[Pinduoduo (PDD US, BUY, TP US$160) TP Change]: Investment Means Continued High Growth

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>The stock plunged today after the announcement of excellent performance for 2Q24.</li>
<li>In 2Q24, revenue grew by 86% YoY and the operating margin improved 10 percentage points YoY.</li>
<li>We believe investors should buy, as it is just a tactic from major stock sellers.</li>
</ul>


The stock plunged today after the announcement of excellent performance for 2Q24.
In 2Q24, revenue grew by 86% YoY and the operating margin improved 10 percentage points YoY.
We believe investors should buy, as it is just a tactic from major stock sellers.


PDD (PDD US): Stock Plunged After Excellent 2Q24 Result – Your Time to Buy

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.</li>
<li>13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%</li>
<li>New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.</li>
</ul>


Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.
13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%
New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.


China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

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PDD Holdings (PDD US)