PDD Holdings 1Q26 Review A Step Closer to Costco Disney Vision

PDD's 1Q26 results showed a mix of soft domestic marketing growth and strong international transaction acceleration via Temu. Goldman Sachs maintains a Buy rating, citing an attractive valuation and a new Rmb100bn brand-building investment initiative.

Key Takeaways

• 1.PDD is initiating a massive 3-year, Rmb100bn investment cycle called 'Xin Pin Mu' to incubate self-operated global brands.
• 2.Despite 1Q earnings miss, Temu's transaction service revenue accelerated to 20% yoy growth, indicating strong GMV momentum.
• 3.Valuation is highly favorable at 8x 2026E P/E (or 4x ex-cash), which is a significant discount to China Internet and global peers.

Table of Contents

• We address key investor focus areas and our thoughts by topic
• Domestic engagement
• Temu GMV & engagement
• Price Target Risks and Methodology - PDD Holdings
• Disclosure Appendix

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