External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>PDD Holdings (PDD) announced (23 May) 1Q23 results: revenue was up 58.2% YoY to RMB37.6bn, 15/17% ahead of our/Bloomberg consensus estimates, which we attributable to robust GMV growth, and increase in monetization.</li><li>The stronger-than-expected revenue growth propelled better-than-expected operating leverage and drove a beat on earnings.</li><li>Non-GAAP net income increased by 141.1% YoY to RMB10.1bn, 69% ahead of consensus.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PDD Holdings (PDD) announced (23 May) 1Q23 results: revenue was up 58.2% YoY to RMB37.6bn, 15/17% ahead of our/Bloomberg consensus estimates, which we attributable to robust GMV growth, and increase in monetization.The stronger-than-expected revenue growth propelled better-than-expected operating leverage and drove a beat on earnings.Non-GAAP net income increased by 141.1% YoY to RMB10.1bn, 69% ahead of consensus.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PDD Holdings (PDD US) – Core Business Delivered Quality Growth

Thematic (Sector/Industry)

<ul><li>We consider Chinese TMT a great credit story despite its equity story has been hammered by regulatory uncertainties, sanction risk and slowing growth.</li><li>Most of the TMT issuers are cash-rich with solid liquidity profiles.</li><li>Within the Chinese TMT space, we like XIAOMIs the most for their most favourable risk-return profile. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We consider Chinese TMT a great credit story despite its equity story has been hammered by regulatory uncertainties, sanction risk and slowing growth.Most of the TMT issuers are cash-rich with solid liquidity profiles.Within the Chinese TMT space, we like XIAOMIs the most for their most favourable risk-return profile. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Chinese TMT: Buy XIAOMI 0’27, XIAOMI 30-31s, MEITUA 0’27 and PDD 0’25

<ul><li>PDD Holdings (PDD) announced (20 Mar) 4Q22 results: revenue was up 46.2% YoY to RMB39.8bn, 7/5% below our/Bloomberg consensus estimates.</li><li>NonGAAP net income attributable to PDD increased by 43.4% YoY to RMB12.1bn, 1/8% ahead of our forecast/Bloomberg consensus, thanks to better-thanexpected gross margin.</li><li>We lower our DCF-based TP to US$106.0 (prior US$116.9) to account for PDD’s proactive move to enhance merchants ROI and consumer engagement amid intensified industry competition in the short-term, but maintain BUY as we remain positive on PDD’s established consumer mindshare in domestic market, which should aid steady GMV growth in 2023 and international expansion potential over the long-run.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PDD Holdings (PDD) announced (20 Mar) 4Q22 results: revenue was up 46.2% YoY to RMB39.8bn, 7/5% below our/Bloomberg consensus estimates.NonGAAP net income attributable to PDD increased by 43.4% YoY to RMB12.1bn, 1/8% ahead of our forecast/Bloomberg consensus, thanks to better-thanexpected gross margin.We lower our DCF-based TP to US$106.0 (prior US$116.9) to account for PDD’s proactive move to enhance merchants ROI and consumer engagement amid intensified industry competition in the short-term, but maintain BUY as we remain positive on PDD’s established consumer mindshare in domestic market, which should aid steady GMV growth in 2023 and international expansion potential over the long-run.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PDD Holdings (PDD US) – Investment to enhance long-term development prospect

<ul><li>We expect Pinduoduo (PDD) to maintain relatively more resilient GMV and revenue growth in 2023E, aided by user stickiness and progress in incorporating more branded products.</li><li>Duoduo Grocery (DDG)’s progress on improving operating efficiency could sustain, in our view, and is on track to achieve operating profit breakeven on single month basis in mid-to-late 2023.</li><li>PDD’s core platform e-commerce business has entered stable growth phase which will provide strong cash flow support for Temu’s overseas expansion.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Pinduoduo (PDD) to maintain relatively more resilient GMV and revenue growth in 2023E, aided by user stickiness and progress in incorporating more branded products.Duoduo Grocery (DDG)’s progress on improving operating efficiency could sustain, in our view, and is on track to achieve operating profit breakeven on single month basis in mid-to-late 2023.PDD’s core platform e-commerce business has entered stable growth phase which will provide strong cash flow support for Temu’s overseas expansion.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pinduoduo (PDD US) – Resilient GMV growth to sustain in 2023

<ul><li>NBS released (17 January) Dec and full year 2022 online retail sales data.</li><li>YoY growth of online physical goods GMV reaccelerated to 4.4% YoY in Dec 2022 (1.2% YoY in Nov), which in our view could be attributed to recovery in logistics and fulfilment capability in late Dec and frontloaded sales generated from the Spring Festival shopping festival due to the early Spring Festival in 2023.</li><li>But solid recovery in YoY growth trajectory likely takes time, in our view, echoed by the 4.7% YoY online retail sales growth during the first five days of the shopping festival (30 Dec 2022-3 Jan 2023; per Ministry of Commerce). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NBS released (17 January) Dec and full year 2022 online retail sales data.YoY growth of online physical goods GMV reaccelerated to 4.4% YoY in Dec 2022 (1.2% YoY in Nov), which in our view could be attributed to recovery in logistics and fulfilment capability in late Dec and frontloaded sales generated from the Spring Festival shopping festival due to the early Spring Festival in 2023.But solid recovery in YoY growth trajectory likely takes time, in our view, echoed by the 4.7% YoY online retail sales growth during the first five days of the shopping festival (30 Dec 2022-3 Jan 2023; per Ministry of Commerce). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – December online retail sales recap

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)