尽管处于持续的投资阶段，但收入复苏已在前方可见。

despite ongoing investmentphase Earnings recovery in sight despite ongoinginvestment phase Target PriceUS$161.70(Previous TPUS$154.30)Up/Downside57.6%Current PriceUS$102.61 PDD Holdings (PDD) announced (26Mar)4Q25 results:revenue increased by12.0% YoY (3Q25: 9.0%) to RMB123.9bn, in line with Bloomberg consensusestimates. This was driven by a 5% beat in transaction services fees,primarilyfuelledby better-than-expected revenue growth in the Temu business,butpartially offset by a 3% miss in online marketing services and other revenues,which we attribute to soft consumption sentiment in 4Q25.Operating profit (OP)rose 8.3% YoYtoRMB27.7bn in 4Q25 and was largely in line with consensus,although non-GAAP net income of RMB26.3bn missed expectations by 16%due to a larger-than-expected income tax expense.For 2025, PDD’s revenuegrew 10% YoY, while non-GAAP net profit declined by 12%YoY due tocontinued investment to enhance its platform ecosystem. After rolling forwardour valuation to 2026E, our SOTP-based target price increased by 5% toUS$161.7 (previously US$154.3).PDD is currently trading at 8x 2026E non- China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFA(852) 38505226franktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hk Overall revenue inline with consensus.In 4Q25, PDD’s online marketingservices and other revenue increased by 5.3% YoYto RMB60.0bn(4Q24:17.1% YoY; 3Q25: 8.1% YoY), 3% below consensus. Transaction servicesrevenue grew 19.2% YoYto RMB63.9bn(4Q24: 33.3% YoY; 3Q25: 9.9%YoY), 5% ahead of consensus, which in our view was driven by strong OP and OPM also inline with consensus.PDD’s gross profit margin(GPM) declined to 55.5% in 4Q25 (4Q24: 56.8%), coming in 1.1pptsbelowconsensus,which we attribute to a higher-than-expected revenuecontribution from the relatively lower-margin Temu business.Sales andmarketing expenses reached RMB34.4bn, up 9.6% YoY (4Q24: +17.7%YoY; 3Q25:-0.5% YoY), accounting for 27.7% of total revenue (4Q24: Lift SOTP-based TPto US$161.7; maintain BUY.We rolled over ourvaluationwindow to 2026E, and ournew TP consistsof, per ADS: 1)US$95.0for the main app based on10x2026E PE (was US$100.7 basedon 12.5x 2025E PE); 2) US$2.0for Duoduo Grocerybased on 1.0x 2026EPS(was US$1.9); 3) US$25.0for Temubased on1.0x 2026E PS(wasUS$20.7 based on 1.0x 2025E PS); and 4) US$39.6for net cash (wasUS$31.0). Source: FactSet Risks 1) Slower-than-expectedglobal business expansion; 2) geopolitical issues impactingbusiness development; and 3) slower-than-expected margin expansion. Disclosures& Disclaimers Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to thesecurities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issueof this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3) serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potentialreturn of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobalMarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important Disclosures There are risks involved in transacting in any securities. The informationcontained in this report may not be suitable for the purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actu