PDD Holdings (NASDAQ:PDD), which owns e-commerce platforms Pinduoduo and Temu, has moved its headquarters to Ireland from China. Recent SEC filings of the company mentioned an address in Dublin, Ireland as its “principal executive offices.” Filings earlier this year cited Shanghai as the address.
Tech giants Apple (AAPL) and Meta Platforms (META) also have their European headquarters in tax-friendly Ireland. PDD’s move to shift its base comes amid the rapid expansion of Temu in international markets, including Europe and the U.S. It could also help PDD protect Temu from heightened scrutiny by U.S. lawmakers amid growing U.S-China tensions.
Temu, which offers deep discounts and coupons, has gained a lot of traction in the U.S. since its launch last year. It is rapidly expanding in Europe and has started selling goods in France, Germany, Spain, Italy, the Netherlands, and the U.K. Temu is also available to customers in Canada, Australia, and New Zealand. Citing YipitData, a CNBC report noted that Temu’s gross merchandise value jumped to $387 million in March from $3 million in September.
However, Temu is facing backlash from U.S. lawmakers about its practices. Last month, the U.S.-China Economic and Security Review Commission (USCC) issued a detailed report on how fast-fashion platforms like Shein and Temu are exploiting trade loopholes and violating intellectual property rights. The report also raised concerns over production processes, product safety, and the use of forced labor.
This week Temu, along with Nike (NKE), Adidas (ADDYY), and Shein, received letters from the Republican and Democratic Party leaders of the House Select Committee on the Chinese Communist Party, inquiring about the use of forced labor and prohibited cotton products in the goods they offer to U.S. consumers.
Is PDD Stock a Buy?
Earlier this week, Citigroup analyst Alicia Yap reiterated a Buy rating on PDD stock but lowered the price target to $100 from $115, citing limited disclosure and geopolitical tensions.
Temu’s parent company PDD scores Wall Street’s Strong Buy consensus rating based on eight Buys and two Holds. The average price target of $103.40 suggests nearly 63% upside.
