To The Moon

🌟🌟🌟$Pinduoduo Inc.(PDD)$ 

takes the Crown from $Alibaba(BABA)$ 

as the most valuable Chinese ECommerce Stock!  It's like David versus Goliath!  With a market value of almost USD196 billion, PDD has overtaken Alibaba which is now worth USD 188.19 billion.

This followed PDD's incredible 3Q 23 earnings on November 28 2023.  PDD's Total Revenue in the quarter was RMB 68,840.4 million  (USD 9.43 Billion), an increase of 94% from RMB 35,504.3 million in the previous year quarter.

Operating Profit was RMB 16,656 million (USD 2.28 Billion), an increase of 60% from RMB 10,436.6 Million in the previous year quarter. Non GAAP operating profit in the quarter was RMB 18,125.8 million (USD 2.48 Billion), an increase of 47% from RMB 12, 301.5 million in the previous year quarter.

Net income was RMB 15,537.1 million (USD 2.12 Billion), an increase of 47% from RMB 10,588.6 million in the previous year quarter.  Non GAAP net income was RMB 17,027.1 million (USD 2.33 Billion), an increase of 37% from RMB 12,447 million in the previous year quarter.

PDD 's surging revenue contrasts sharply with far slower growth in the 3Q for Alibaba and$JD.com(JD)$  

Alibaba reported 9% year on year growth in 3Q23 of USD 31 billion.  However Alibaba' s net income for 3Q23 missed Analysts' expectations. 

JD missed 3Q estimates despite revenue rising 1.7% to USD 34 billion. 

PDD is synonymous with value for money and that is the winning formula for PDD.  It also owns Temu, an international online platform which is live in 47 countries.  Temu was just launched in the US in September 2022 and it is one of the most popular apps among budget conscious consumers.  Temu even took some business  away from $Amazon.com(AMZN)$  

With discounts as low as 90% in Black Friday Sales. 

PDD's strong revenue contrasts sharply with Alibaba and JD.com which tend to sell higher priced items. 

Alibaba recently cancelled the spin off of its Cloud Computing division due to US curbs on high end  chips exports to China.  This resulted in a USD 20 billion drop in market value in a day.  Alibaba's share price slipped by 3.2% to USD 72.50 touching a fresh one year low.  Alibaba's shares are now down nearly 17% since November. 

Morgan Stanley also downgraded Alibaba from "overweight" to "equal weight" flagging concerns over softness in its customer management revenue and cloud business due to slower economic recovery in China.   Morgan Stanley has now cut its price target on Alibaba from USD 110 to USD 90.  

In contrast Morgan Stanley named PDD as its top pick in the ECommerce sector as the well  placed to navigate current economic environment with its heavy discounting steps. 

Pinduoduo Versus Alibaba - Which is a Better Buy? 

Wall Street Analysts are Bullish on both PDD and Alibaba with a Buy rating.  The Target price for PDD is USD 164.83, an upside potential of 13%.  The Target price of Alibaba is USD 124.74, an upside potential of 68%.

While PDD is now the strongest company in terms of ECommerce, Alibaba is so much  more than just an ECommerce company.    The restructuring and creation of 6 businesses from 1 company will empower all its businesses to become more agile, enhance decision making and enable faster responses to market changes.  The sheer potential from the ability to raise funds through IPOs is still there, waiting to unlock shareholder value and foster market competitiveness. 

Both Pinduoduo and Alibaba are excellent stocks to hold long term.  However I believe that Alibaba is a better buy as it is grossly undervalued and has greater potential in capital growth in the long term.   All Alibaba needs is lots of patience and time in the market to realise its full potential in the future. 

As the wise Charlie Munger would say "The Big Money is not in the Buying and Selling but in the Waiting." 

@Daily_Discussion  @TigerStars  @MillionaireTiger @CaptainTiger  @Tiger_comments  @Tiger_Earnings  @TigerPicks  @TigerClub  @Tiger_SG