Markets

Recent Pinduoduo Progressions Impress Barclays


© Stocksak Barclays Impressed by Recent Pinduoduo (PDD) Progress – Upgrades to OW

By Sam Boughedda

Pinduoduo (NASDAQ:) was upgraded from Equal Weight to Overweight, and its price target was raised by 6% from $66 to $70 per share.

Investors were told by analysts that Pinduoduo only provides limited disclosures. However, they were impressed with the recent progress of the platform in China to add more brands and gain early traction in America.

“While PDD has a dominant position in the lower tier city market for ecommerce, with over 800m customers acquired over the past 6-7 year, a key bottleneck to its next stage is a shortage of branded products. These are what consumers want to buy in higher tier cities. Analysts said that PDD has been working with brands to persuade them open flagship stores at PDD to address this problem.

Analysts also stated that they had seen encouraging signs in recent quarters when Pinduoduo saw some brands open flagship stores.

The analysts said that only a few Chinese ecommerce businesses have been able to achieve meaningful success in the U.S. market with the exception Shein (private, non-covered). PDD’s US app/website Temu gained significant traction since its launch on Sep 1. SKUs have increased 20x, and the Temu App briefly became the top-downloading app on the iOS store.

PDD shares were up more than 2% Thursday.

News Source and Credit

Stocksak Editorial

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