BoCom International released a report that the bank expects the income of Pinduoduo (PDD.US) to rise 52% year-on-year to 11.05 billion yuan (the same below) (market expectation is 11.6 billion yuan) in the second quarter, with an adjusted net loss of 1.6 billion yuan (market expectation is 1.5 billion yuan). The increase in repurchase led to a decline in the proportion of sales expenses to GMV.

The continuous subsidy investment has led to the rapid growth of the company's transaction scale, and the Sale M expense rate has a long-term downward trend. The bank cut its 21-year and long-term Stemm expense forecast and expects marketing expenses to fall to 66 per cent of revenue in 21 years and is expected to make a profit in 21 years, with an adjusted net profit margin of 3 per cent.

Based on its long-term growth potential, the bank raised its target price to $95 (previously $73), corresponding to a 20-year / 21 price-to-sales ratio of 17.2 / 10.3. The bank believes that Pinduoduo can reach it in a short period of time.AliThe market position of GMV about 1x3 has been recognized by investors. The key to the improvement of future valuation lies in whether it can further narrow the market share gap and continue to improve its liquidity, and gradually achieve profitability. Keep buying.