Zhitong Financial APP learned that on December 12, 2022, CICC Securities released a securities research report, covering Dingdong (Cayman) Limited for the first time.$Dingdong (DDL.US)$To rate the "outperform industry" with a target price of $7.00 (Dingdong (Cayman) Limited closed at $4.680 as of December 12, 2022 et). According to the report, the market has underestimated Dingdong (Cayman) Limited's profit prospects and execution efficiency, and its history of good implementation of guidelines, UE models in advantageous areas, and the ability to organize and respond quickly have supported the sustainability of the business model and the company's implementation efficiency.
The report points out that Dingdong (Cayman) Limited is already the company with the largest user scale in the field of fresh e-commerce, with strong stickiness of core users and a stable zone of strong consumption power in the Yangtze River Delta, and based on the advantage of scale, the company can flexibly and decisively respond according to the general trend, and strong execution is expected to cash in the profit guidance ahead of time.
Specifically, CICC believes that the main advantages of Dingdong (Cayman) Limited at the present stage are as follows: 1. The continuous ploughing of fresh and fresh products gives full play to the scale effect, which on the one hand optimizes the efficiency, on the other hand, it can go deep into the upstream by virtue of the scale advantage. through direct source mining, self-processed products, own brands, etc., continue to build commodity power advantages, optimize user experience, and form double flywheel effect. 2. Firmly occupy the Yangtze River Delta region, which has strong consumption power and people have high requirements for quality of life, forming brand effect and barriers to entry, and the accumulated commodity power also lays the foundation for future expansion. In addition, Dingdong (Cayman) Limited's own brand and free productivity are also creating differentiated value. These advantages have brought it a virtuous circle of growth and development.
CICC also expects Dingdong (Cayman) Limited's income in 2022, 2023 and 2024 to be 23.7 billion yuan, 25 billion yuan and 28.6 billion yuan respectively, and is expected to make a profit of 130 million yuan in 2023, and the profit margin is expected to further rise to 2.6%, or 740 million yuan, in 2024. And the company's cash flow can support its profitability.
It is understood that Dingdong (Cayman) Limited has been favored by a number of institutions recently. Some time ago, Dingdong (Cayman) Limited was officially included in the MSCI China small cap index, proving that its business prospects have been recognized by the international capital market.