According to a Morgan Stanley report, PDD Holdings' Temu platform has taken a more balanced approach to global expansion this year, with the expected contribution of the United States to gross trade volume dropping from over 50% last year to 33% this year and to 30% by 2030. Europe's contribution ratio is expected to rise to 37% this year, and Latin America's contribution ratio is expected to rise to 10%. The bank forecasts that Temu's gross trading volume will rise from $19 billion last year to $53 billion this year and to $130 billion by 2030, but Temu's market share in various e-commerce markets is still relatively small.

The bank also notes that since the beginning of the year, concerns among overseas investors in PDD Holdings have centered on potential tariffs and the possibility of being banned from doing business in the United States. The European Commission officially included Temu in the category of very large online platforms at the end of last month, which means that Temu will be subject to regulation under the Digital Services Act and will have to comply with higher compliance requirements. Regulatory risks are expected to continue to be a major concern for Temu in the second half of the year.

The bank has raised its earnings forecast for PDD Holdings from 2021 to 2026 by 4% to 5%, and believes that the improvement in market share and operational profitability in the company's domestic business in China will continue. The bank forecasts that Temu will turn profitable next year, and its operational profitability will reach $9 billion by 2030. The bank maintains its 'Overweight' rating and target price of $220 for PDD Holdings' American Depositary Receipts.