Glonghui, March 21 | CICC released a report saying that Pinduoduo's revenue for the last quarter increased 123% year-on-year to 88.9 billion yuan, higher than market expectations by 11%, and both transaction services and advertising revenue surpassed market expectations; non-GAAP net profit of 25.5 billion yuan, higher than market expectations by 52%, mainly due to improved operating leverage brought about by an increase in monetization rates. CICC believes that Pinduoduo's domestic price advantage comes from traffic distribution mechanisms, operating efficiency, and scale effects. Until there is no substantial progress in traffic mechanism adjustments and operational efficiency improvements for various e-commerce platforms, the competitive risks Pinduoduo faces are manageable. At the same time, it is judged that Temu's key investment direction this year will shift from North America to Europe, the Middle East, Japan, South Korea, and Latin America. The North American region is expected to drastically reduce losses under the combined influence of rising customer unit prices, slowing customer acquisition, and changes in the semi-hosting model. Combined with improvements in domestic operating leverage, Pinduoduo's non-GAAP net profit this year is 105.9 billion yuan. CICC raised Pinduoduo's revenue forecast by 15% and 2% to 392.7 billion yuan and 498.4 billion yuan respectively, mainly due to the increase in Pinduoduo's domestic and overseas monetization rates and 25% and 15% of this year and next two years to 105.9 billion yuan and 152.3 billion yuan respectively, mainly due to improved operating leverage and Temu's continued loss reduction. CICC raised its target price by 9% to $187, maintaining its “outperforming the industry” rating.