🎁What the Tigers Say | Will PDD surpass BABA's market cap?

Pinduoduo jumps 16% in premarket trading after China's e-commerce company posts another surprising earnings. $Pinduoduo Inc.(PDD)$ 's revenue increases 90% yoy.

Temu has only been on the U.S. market for 14 months. Some analysts said that Temu's revenue may have exceeded $1 billion from the United States last quarter! Will PDD surpass $Alibaba(BABA)$'s market cap?

Below are some insights from Tiger @koolgal, @Value_investing and @MaverickWealthBuilder. Which opinions do you agree with？

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Click titles to read the full analysis:

1. @koolgal: Are Amazon and Pinduoduo The Winners In Black Friday Sales?

Key Points:

• In the US, Thanksgiving Day saw USD5.6 billion in online spending, an increase of 5.5% year over year. Black Friday alone generated a whopping USD 9.8 billion in online sales - up 7.5% from the previous year. Cyber Monday is even bigger! It is the Biggest online shopping day of the year, driving a record USD 12 billion in spending. That is up 6% year over year.

• Since launching in the US in September 2022, Temu owned by PDD has leapt to the top of app stores. Temu is offering Black Friday sales with offers of up to 90% off! Temu is now live in 47 countries. Temu's strategy of deep discounting seems to be paying off.

• I am bullish on Amazon and Pinduoduo as I believe they have exponential growth ahead. As we head towards December, let's hope the markets will rally further to end the year with a Big Bang and a great start to 2024.

2. @Value_investing: PDD may surpass BABA and JD as China's largest e-commerce!

Key Points:

• $Pinduoduo Inc.(PDD)$ just released its third quarter results, the stock soared 16% in pre-market trading, and the market capitalization reached $181.4 billion, which is four times that of $JD.com(JD)$ $JD-SW(09618)$ and approaching $Alibaba(BABA)$ $Alibaba(09988)$'s $197.2 billion. The throne of China's largest e-commerce is about to change!

• The company did not explain the reasons for the surge in performance in the financial report, but it is easy to understand that overall consumption showed a downgrade trend in the domestic market. PDD is known for low prices and fully benefit.

• In overseas markets, Temu's performance is really amazing. According to Bloomberg data, Temu's sales in the United States were more than twice that of Shein in September.

• PDD price-earnings ratio is only 26 times, and there is still a lot of upward space.

3. @MaverickWealthBuilder: How Temu contributes to PDD?

Key Points:

• TEMU has the potential to recreate Pinduoduo because cross-border e-commerce is a vast and promising field.

• Pinduoduo’s main business is also doing well this quarter, with advertising and commission revenue of around 45 billion RMB, accounting for about 65% of Alibaba’s Taotian customer management revenue of 68.7 billion RMB in the same period. Pinduoduo’s monetization efficiency is higher than that of Taobao and jd , which focus on brand merchants, despite having a bunch of small and medium-sized merchants and white-label merchants.

• Pinduoduo’s personnel expenses are well-controlled, and the company’s efficiency is even better than that of early-stage Alibaba. In the case of a 30 billion RMB increase in revenue YoY, the company’s internal R&D and administrative expenses have remained relatively stable, and personnel expenses are well-controlled. The cost of sales can be roughly judged by comparing the increase in revenue with the increase in costs. TEMU’s gross profit margin (revenue-cost-performance) may have turned positive, which is better than market expectations. The marketing expense ratio can be clearly seen from the marketing expense side, and TEMU has a good grasp of the input-output ratio. In the case of revenue being 14 billion RMB higher than market expectations, marketing expenses increased by more than 4 billion RMB, and the marketing expense ratio was 5 percentage points lower than market expectations.

Questions for you:

Will PDD surpass BABA's market cap? Which e-commerce stock are you most bullish on?

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⏰Duration

• 6 Dec (24pm EDT)