Merrill Lynch released a lot of research report: give a "buy" rating target price of 32 US dollars

[TechWeb] May 15 news, before pinduoduo released the results, Merrill Lynch (Merrill Lynch) released a research report, pinduoduo "buy" rating, the target price of $32. As of Tuesday's close, pinduoduo shares closed at $22.15, with a total market capitalization of about $25.746 billion.


Merrill Lynch analysis forecasts that between 2019 and 2021, the average consumption of multi-year active buyers will at least triple (3258 yuan per person per year). The overall GMV will reach 1.864 trillion yuan in 2 years, with an annual compound growth rate of 58 percent.

At the same time, the rate of monetization will increase from 2.78% in 2018 to 3.57% in 2021. By then, under the non-General Accounting Standards (Non-GAAP), pinduoduo's operating profit will be increased from the current-30.2% to 15.1%.

Merrill believes that the company is still adopting a very conservative monetization rate policy, and its platform commissions and related marketing expenses are much lower than other e-commerce platforms. The multi-subsidy subsidy allows the promotion and other promotional activities to continue and is fierce. Therefore, the revenue of the platform from 2019 to 2020 may be lower than Wall Street's expectations.

Merrill Lynch pointed out that the main potential risk of more than any other side is the continued damage to the reputation of the platform as a result of increased competition in the industry. Combined with a number of information, Merrill Lynch forecasts that pinduoduo's revenue in the first quarter of 2019 will be 4.247 billion yuan. From 2019 to 2021, Pinduo's multi-year revenue will achieve a compound annual growth of 72 percent, and the company will make a profit in the second half of 2020. It is expected to realize a profit of 10.36 billion yuan in 2021.

In addition, Merrill Lynch believes that due to the seasonal factors in the e-commerce industry, the GMV in the first quarter of 2019 will decline in the first quarter of 2019, but it will increase by more than 130%. Merrill Lynch said that based on numerous long-term growth investments and expenses, the revenue and profits from the 2019 to 2020 cycle may be lower than Wall Street's current expectations, but starting in 2021, the profit will be more than market expectations. At least 30% higher.

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