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PDD Holdings Inc ADR PDD

Morningstar Rating
$116.45 −4.65 (3.84%)
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Company Report

PDD Holdings Earnings: Strong Revenue and Earnings Beat; Fair Value Estimate Maintained

PDD Holdings’ fourth-quarter revenue and non-GAAP operating profit beat LSEG consensus estimates as of March 20 by 12% and 41%, respectively. Revenue surged 123% year on year, mainly driven by the 357% jump in transaction services revenue thanks to overseas e-commerce platform Temu. Online marketing services revenue registered strong year-on-year growth of 57%, boosted by an estimated nearly 30% surge in gross merchandise volume and a higher monetization rate. We were surprised by the cost-control measures amid Temu’s expansion. Total non-GAAP operating expense as a percentage of total revenue was 33% in the fourth quarter, compared with 48% a year ago. We believe this is mainly driven by the 1,300-basis-point year-on-year reduction in non-GAAP sales and marketing expenses. This might explain the 12.5% month-on-month drop in observed sales for Temu in December 2023 published by Bloomberg Second Measure, which tracks a subset of US credit and debit card transactions.

Price vs Fair Value

PDD is trading at a 43% discount.
Price
$121.13
Fair Value
$665.00
Uncertainty
Very High
1-Star Price
$471.28
5-Star Price
$655.90
Economic Moat
Mknqvv
Capital Allocation
Jmbvqrf

Bulls Say, Bears Say

Bulls

Temu might break even faster than anticipated while maintaining an above-industry growth rate.

Bears

If Temu loses its growth momentum faster than expected, it could lead to negative profit growth for PDD due to competition.

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News

Trading Information

Previous Close Price
$121.10
Day Range
$116.26119.36
52-Week Range
$59.68152.99
Bid/Ask
$116.44 / $116.46
Market Cap
$154.67 Bil
Volume/Avg
4.7 Mil / 8.4 Mil

Key Statistics

Price/Earnings (Normalized)
22.88
Price/Sales
5.05
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. PDD aims to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD has built a network of sourcing, logistics, and fulfillment capabilities that support its underlying businesses.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Total Number of Employees
12,992

Competitors

Valuation

Metric
PDD
03690
JD
Price/Earnings (Normalized)
22.8858.378.68
Price/Book Value
6.093.871.28
Price/Sales
5.052.140.28
Price/Cash Flow
13.2814.585.03
Price/Earnings
PDD
03690
JD

Financial Strength

Metric
PDD
03690
JD
Quick Ratio
1.431.401.02
Current Ratio
1.831.751.36
Interest Coverage
1,007.677.8110.96
Quick Ratio
PDD
03690
JD

Profitability

Metric
PDD
03690
JD
Return on Assets (Normalized)
21.39%3.06%5.84%
Return on Equity (Normalized)
41.38%5.79%15.82%
Return on Invested Capital (Normalized)
32.47%4.40%9.19%
Return on Assets
PDD
03690
JD
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