U.S. Markets closed

Pinduoduo shares rise after Jefferies starts coverage at buy

Emily Bary

American depositary shares of Chinese e-commerce company Pinduoduo Inc. are up 0.8% in morning trading Monday after Jefferies anlyst Karen Chan initiated coverage with a buy rating and said that the company was "reinventing rural shopping." She is upbeat about the company's ability to benefit as middle-aged, rural Chinese citizens increase their discretionary spending. "As China's e-commerce penetration of retail sales approaches 18.5%, and over 70% of internet users shop online, we believe further growth opportunities are underpinned by both consumption upgrade of China's 400-million middle class as well as low-hanging fruits in tier-3 cities and below, which now contribute close to 60% of new e-commerce users," Chan wrote. She set a price target of $30 on the shares, which have fallen 10% over the past three months.