Pinduoduo is winning the price war with Chinese rivals Alibaba and JD.com, according to a Bloomberg report. Shares are up 12% so far this year, compared to a drop of nearly 8% in Alibaba stock and a plunge of 30% for JD.com.
Of 42 analysts covering the stock, 38 have a Buy or Strong Buy rating. The other four rate it at Hold. At a share price of around $94.50, the upside potential based on a median price target of $110.27 is about 16.7%. At the high price target of $140.12, the upside potential is 48.3%.
Analysts are expecting fourth-quarter revenue of $5.93 billion, up 18.8% sequentially and 38.6% higher year over year. Adjusted EPS are forecast at $1.24, up 2.1% sequentially and by 33.3% year over year. For the full 2022 fiscal year, PDD is forecast to post EPS of $3.92, up 160.1%, on sales of $19.13 billion, up 29.4%.
PDD shares trade at 24.1 times expected 2022 EPS, 21.7 times estimated 2023 earnings of $4.37 and 17.0 times estimated 2024 earnings of $5.55 per share. The stock’s 52-week range is $31.01 to $106.38. The company does not pay a dividend, but the total shareholder return for the past year was 121.77%.
Tencent Music
Tencent Music Entertainment Group Inc. (NYSE: TME) is China’s largest online music entertainment platform and a subsidiary of Tencent Holdings, also the owner of WeChat. Over the past year, the share price has jumped by 69.3%. Last month the company fired 300 employees after giving up its virtual reality/metaverse plans. It also walked away from a phone gaming deal that could have added 1,000 more employees. The company reports quarterly results before U.S. markets open on Tuesday.
Analysts have turned bullish on the stock, with 17 of 25 analysts having a Buy or Strong Buy rating, while seven others rate the shares a Hold. At a price of around $8.00 a share, the potential upside based on a median price target of $9.73 is about 21.6%. At the high target of $12.28, the implied upside is around 53.5%.
Analysts expect the company to post fourth-quarter revenue of $1.06 billion, up 2.9% sequentially but 11.7% lower year over year. Adjusted EPS are pegged at $0.13, up 7.2% sequentially and by 62.5% year over year. For the full 2022 fiscal year, EPS are forecast at $0.43, up 10.4%, on revenue of $4.1 billion, down 16.7%.
The stock trades at 18.3 times expected 2022 EPS, 16.3 times estimated 2023 earnings of $0.48 and 15.2 times estimated 2024 earnings of $0.52 per share. Tencent Music’s 52-week range is $3.14 to $9.29. The company does not pay a dividend. Total shareholder return over the past 12 months was 69.33%.
Originally published at 24/7 Wall St.
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