Nomura Securities upgrades Pinduoduo's rating to Buy, optimistic about valuation attractiveness and Temu's strong performance

Investing.com - Nomura Securities upgraded the rating of Temu’s parent company Pinduoduo (NASDAQ:PDD) on Friday, citing that the stock’s valuation is attractive and low-priced, while its overseas business shows resilience.

Nomura Securities raised Pinduoduo’s rating from Neutral to Buy, maintaining a target price of $136.0 — representing an upside of over 35% compared to Thursday’s closing price of $100.62.

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The brokerage stated that Pinduoduo is “too cheap to ignore,” noting that the stock currently has a forward P/E ratio for 2026 of “only” 8.6 times.

Nomura Securities pointed out that Pinduoduo’s fourth-quarter financial report reflects a bifurcation trend — its Chinese e-commerce business may be slowing down, but its overseas business is steadily recovering with the growth of transaction service revenue.

Nomura Securities analysts said in the report: “We are impressed by the strong resilience of its overseas business, which we believe stems from the management team’s excellent execution ability, despite a series of setbacks caused by tariff increases and changes in import policies in several overseas markets during 2025.”

Pinduoduo’s online marketplace platform Temu is at the core of its overseas business, with strong U.S. sales recorded during 2025, despite the increase in import tariffs. The recent U.S. Supreme Court decision overturning many tariffs in Washington is expected to benefit Temu, which is very popular among American consumers.

Nomura Securities noted that after Pinduoduo’s stock price fell 20% over the past 12 months and also underperformed the Hang Seng Tech Index, the stock now presents an attractive risk-reward ratio.

The brokerage also welcomed the new Pinduoduo and Temu initiative, stating it will help Temu better address the increasingly strict scrutiny and regulation of Chinese products by Western countries.

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