$Pinduoduo(PDD)$ Just announced 24th Q1's results blew up again, with revenue +131% y/y, the highest in 21 years and 13% higher than the market consensus, gross profit 62% 5% higher than the market's expectations, and net profit +200%, nearly double the market consensus!
This volume, this growth rate, also on the AI leading Nvidia can be temporarily a comparison, can be said to be the light of the United States stock Nvidia, the light of the Chinese probability of Pinduoduo.
Why did you get such a good performance?
In terms of the domestic part, advertising revenue surged, much to the surprise of the market, and two reasons have to be mentioned for the 56% growth rate despite last year's high base:
E-commerce is efficient in conversion
E-commerce is very rolled
It's not hard to explain the incremental volume of foreign Temu's long-term domination of the app store, but what's remarkable is that the gross margin actually increased, thus barring the entire gross profit base from being raised to a high level, which is also indicative:
The maturation of channels and operating methods;
Very competitive in the current inflationary environment overseas;
Marginalization earlier than market expectations
Plus the ultimate control of operating expenses .
Especially when it comes to marketing inputs, without the extremely large expenditures, then the savings are all profits;
The market has actually learned about PDD's ability to wildly exceed expectations in previous quarters, and has actually more or less raised its estimates, but despite this, actual profits still exceeded double, which is simply too good to pass up.
In terms of valuation, at a pre-market price of $158, PDD's dynamic PE is still only 18.9x after updating to Q1 earnings, placing it in the overall $Nasdaq 100 (NDX)$. Even if profit growth falls back to 50% over the next two years, the 158 price would correspond to just 12x, which is unimaginably cheap.
I'm also personally long on Poundland, which is still EXTREMELY INVESTABLE at the moment.
With such a great earnings report, why isn't the stock price more volatile?
I think overseas investors are still in the second stage of "question, understand, become". The rise of Pinduoduo is definitely a philosophical economic issue.
What kind of "windfall" does Poundland make?
Accidentally refers to the big over the market accident, I do not suspect that Poundland performance fake, honestly do not need, grizzly bears a class of shorting pure jumping clowns.
The "windfall" that Pinduoduo earns is actually from merchants. In other words, Pinduoduo platform merchant profit margins may be much lower than investment bank analysts expected.
On the one hand, merchants have to compete with each other in the volume, on the other hand, to continue to give consumers, reap the benefits of Pinduoduo just as a referee for a long time, and let the merchants bidding to become "blood into the river", and manufacturing capacity-intensive Chinese merchants can only "blood into the river". Therefore, in Jinduoduo on the "200 million flow of water net profit of only 550,000" case is not a few.
How to make more money from merchants?
Taobao's thinking is to create an "elite class", hoping to upgrade consumption, hoping to cultivate consumers who are loyal to the platform and loyal to the merchants, so a crown store that has been operating for many years inherently has an incomparable "class advantage", and it is very difficult for those who come after them to enter! The difficulty of entry for those who come after them is great;
But Pinduoduo is more "break the class". With Huang Zheng's original intention of "turning capitalism upside down", vigorously tilted to the buyers, in turn, letting merchants bidding, and more focus on SKUs, weakening the merchant stores and brands. Often can see, a store with hundreds of millions of water push a new category, as usual, to invest a lot of resources and new entrants at the same time to compete, the track is more fair, and therefore can also be "rolled" up.
This natural difference also makes Taobao and Pinduoduo's category advantages become polarized, like clothing and other products with personalized factors can always become Taobao's advantageous categories, Pinduoduo can not hit the high ground.
How long can Pinduoduo's "mode dividend" last?
Domestic part, in the macro-environmental pattern, "all short videos, per capita to do e-commerce" economic pattern is difficult to change. Because
Manufacturing capacity is high and remains a buyer's market;
E-commerce is the most cost-effective investment, the cycle time for technology development and investment is too long;
In the foreign part, Temu's growth rate shows that it is still in the first and middle stages of growth, and there are even so many other national and regional markets to be developed. Meanwhile, the post-inflation economic environment has brought about bifurcation, which also brings natural advantages to Temu's development. The model of high volume and thin margins will also reshape the rules of business and influence consumer behavior;
Despite the fact that Taobao and Jingdong have both begun a low price strategy, there is still a deviation, so other platforms can really cultivate enough users with similar consumption habits to really set off competition between platforms.
Platforms are willing to turn around, and those merchants who have been running crown stores for years may not be able to accept it;
Consumer behavior habits, or the positioning of the platform cognitively different, in the mind of the user, Taobao may not be doing this job;
The group of consumers most inclined to thinly-veiled goods focuses on Poundland instead as a first-mover advantage;
It can be said that consumers/merchants who like the Poundland model will be quite favorable, while those who don't like such a model will be very spiteful. But when the materialization of the reality in front of the problem, whether consumers feel the pocket, or merchants weigh the pros and cons, and ultimately what will be the choice?
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