KUALA LUMPUR, Oct 20 (Bernama) -- Bursa Malaysia’s benchmark index edged higher at the close as bargain hunting emerged following Monday’s sharp sell-off, although it narrowly failed to reclaim the 1,600 level, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained 3.83 points, or 0.24 per cent, to 1,599.58 from Monday’s close of 1,595.75. The index opened 3.18 points lower at 1,592.57, marking its intraday low, and reached an intraday high of 1,602.83 in early trading. On the broader market, decliners outnumbered gainers 751 to 331, while 499 counters were unchanged, 1,259 untraded and 10 suspended. Turnover rose to 2.86 billion units worth RM2.42 billion against Monday’s 2.49 billion units worth RM2.38 billion.
Key Takeaway: PDD Holdings (NASDAQ) will release its Q3 2024 earnings on November 21, 2024, before markets open. Analysts forecast strong revenue and earnings growth, driven by its e-commerce business and the success of the Temu platform.
Consensus Estimates:
- Revenue: Projected at 103.70 billion CNY, up 50.64% year-over-year (YoY).
- Earnings Per Share (EPS): Estimated at 19.77 CNY, a rise of 86.47% YoY.
Key Drivers of Growth:
E-Commerce Momentum:
- PDD’s innovative group-buying model and integration with social media have gained traction.
- Online marketing services revenue: Expected to grow 23.78% YoY to 49.12 billion CNY.
- Transaction services revenue: Forecasted to rise 81.84% YoY to 53.01 billion CNY.
Temu Platform Strength:
- Temu sales: Estimated at $54 billion for 2024, up from $15.33 billion in 2023.
- Global Expansion: Temu’s rapid growth diversifies PDD’s revenue streams, reducing reliance on the Chinese market.
Investor Confidence:
- David Tepper’s Appaloosa Management increased its PDD holdings by 3.36 million shares in Q3.
- Freemont Capital raised its stake by 23.8%, and Vanguard Group expanded its position to 24.26 million shares.
Options Market Insights:
- Volatility Trends:
- PDD’s earnings reactions have been more volatile than market predictions, with actual moves averaging 14.4% versus the expected ±11.7% over the last 13 quarters.
- Bullish Sentiment: A lower 25-Delta Put-Call Spread suggests stronger demand for upside calls than downside puts.
Challenges and Stock Performance:
- PDD’s stock has declined 22% year-to-date, lagging behind broader indices.
- Despite this, analysts are optimistic about its long-term growth potential, supported by its expanding e-commerce ecosystem and Temu's international success.
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