Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>PDD Holdings Inc., an innovative online retail company based in China, seems to show a strong future trajectory based on its first quarter 2024 earnings conference call.</li><li>The company surpassed its year-on-year growth with total revenue reaching RMB 86.8 billion, marking a 131% increase.</li><li>This impressive growth serves as a testament to PDD Holdings’s efforts to deepen its access and widely influence the consumer market.</li></ul>

PDD Holdings Inc., an innovative online retail company based in China, seems to show a strong future trajectory based on its first quarter 2024 earnings conference call.The company surpassed its year-on-year growth with total revenue reaching RMB 86.8 billion, marking a 131% increase.This impressive growth serves as a testament to PDD Holdings’s efforts to deepen its access and widely influence the consumer market.

PDD Holdings: Will The Focus On Agricultural Strategy Convert Into Positive Revenue Growth? - Major Drivers

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 C1Q24 top-line, non-GAAP EBIT, and non-GAAP net income 1.3%, 67.0%, and 80.0% vs. our estimate, and 13.9%, 82.0%, and 94.7% vs. consensus, respectively;</li>
<li>Temu unit economics improvement drove the 1Q beat. Per order outlay on marketing and fulfilment declined 20-25% qoq, we estimate;</li>
<li>PDD continues to effectively squeeze merchants for its benefit,while also benefiting from weak consumer sentiment in China and overseas. We maintain BUY,and raise TP to US$172, implying 12.3x CY24 PE.</li>
</ul>


PDD reported C1Q24 top-line, non-GAAP EBIT, and non-GAAP net income 1.3%, 67.0%, and 80.0% vs. our estimate, and 13.9%, 82.0%, and 94.7% vs. consensus, respectively;
Temu unit economics improvement drove the 1Q beat. Per order outlay on marketing and fulfilment declined 20-25% qoq, we estimate;
PDD continues to effectively squeeze merchants for its benefit,while also benefiting from weak consumer sentiment in China and overseas. We maintain BUY,and raise TP to US$172, implying 12.3x CY24 PE.


[PDD Holdings (PDD US,BUY,TP US$172) TP Change]:Squeezing Supplier Base for Its Own Benefit,Globally

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>Total revenue rose by 131% in 1Q24 with advertising up by 56% YoY and commission up by 327% YoY.</li>
<li>In 1Q24, both the operating profit and the operating margin reached record highs.</li>
<li>The historical price / sales ratios suggests a significant upside. Buy.</li>
</ul>


Total revenue rose by 131% in 1Q24 with advertising up by 56% YoY and commission up by 327% YoY.
In 1Q24, both the operating profit and the operating margin reached record highs.
The historical price / sales ratios suggests a significant upside. Buy.


PDD (PDD US): 1Q24, Rev Up by 131% and Margin Reaching Historical High

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>We are more bullish on PDD’s 1Q24 results on the back of better monetization of domestic e-commerce business and fast and quality growth of TEMU.</li>
<li>We now expect 1Q24 adjusted earnings to almost double yoy to RMB20 billion, much higher than our previous estimate of 50% yoy growth and exceeding consensus by ~30%.</li>
<li>Moreover, we believe earnings growth will be steady throughout 2024 instead of slowing down as we thought. 10x FY24 earnings against 80% yoy growth lead us to see 50%+ upside.</li>
</ul>


We are more bullish on PDD’s 1Q24 results on the back of better monetization of domestic e-commerce business and fast and quality growth of TEMU.
We now expect 1Q24 adjusted earnings to almost double yoy to RMB20 billion, much higher than our previous estimate of 50% yoy growth and exceeding consensus by ~30%.
Moreover, we believe earnings growth will be steady throughout 2024 instead of slowing down as we thought. 10x FY24 earnings against 80% yoy growth lead us to see 50%+ upside.


Pinduoduo（PDD US): Growth Stock Priced as Value Play

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)

PDD Holdings: Will The Focus On Agricultural Strategy Convert Into Positive Revenue Growth? - Major Drivers

PDD Holdings Inc., an innovative online retail company based in China, seems to show a strong future trajectory based on its first quarter 2024...

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