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PDD Holdings Inc ADR PDD

Morningstar Rating
$133.04 +0.96 (0.73%)
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Company Report

PDD's Temu Is Expanding Faster And Burning Less Cash Than We Expected

PDD Holdings is a social e-commerce platform that encourages users to enjoy lower prices by teaming up to make purchases. Easier sharing of PDD deals with social contacts through Tencent’s social network leads to lower traffic acquisition costs versus peers. The firm focused on low-tier cities and white-label merchants, followed by the CNY 10 billion program launched in 2019 to subsidize consumers for higher-priced products such as Moutai, Apple iPhones, and agricultural products. PDD aims to offer good value across a wide range of categories and price points. To increase average revenue per user, PDD uses subsidies to induce consumers to make purchases in categories they haven't purchased in before. PDD's active buyers in the year ended March 2022 were 882 million, likely higher than that of Alibaba, though we estimate its spending per active user was 37% of Alibaba. CEO Chen Lei expressed his goal in 2021 to continue subsidies so as to replace Alibaba as the shopping platform of choice for the 1 billion consumers in China.

Price vs Fair Value

PDD is trading at a 59% premium.
Price
$133.04
Fair Value
$829.00
Uncertainty
Very High
1-Star Price
$112.70
5-Star Price
$545.00
Economic Moat
Dddzx
Capital Allocation
Ptknrdp

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
$132.08
Day Range
$130.77133.29
52-Week Range
$74.48164.69
Bid/Ask
$132.60 / $133.00
Market Cap
$184.76 Bil
Volume/Avg
4.9 Mil / 9.1 Mil

Key Statistics

Price/Earnings (Normalized)
15.82
Price/Sales
4.69
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
17,403

Competitors

Valuation

Metric
PDD
03690
BABA
Price/Earnings (Normalized)
15.8228.778.67
Price/Book Value
6.014.381.32
Price/Sales
4.692.421.46
Price/Cash Flow
12.2225.276.98
Price/Earnings
PDD
03690
BABA

Financial Strength

Metric
PDD
03690
BABA
Quick Ratio
1.681.571.55
Current Ratio
2.091.821.79
Interest Coverage
2,526.8110.276.67
Quick Ratio
PDD
03690
BABA

Profitability

Metric
PDD
03690
BABA
Return on Assets (Normalized)
28.43%8.68%4.42%
Return on Equity (Normalized)
52.61%16.49%7.83%
Return on Invested Capital (Normalized)
41.99%11.89%7.04%
Return on Assets
PDD
03690
BABA
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