Despite PDD's 30% Drop, Long-Term Uptrend and Strong Growth Remain
Gotta love Doomberg.
$PDD Holdings Inc(PDD)$ comes out with weak guidance after posting 86% revenue growth and 140% profit growth... and THIS is what they produce as the common denominator.
Might as well have read, "China's economy is falling off a cliff!"
We all know it's not. $Alibaba(BABA)$ $Alibaba(09988)$ $JD.com(JD)$ $JD-SW(09618)$ results + incredible performance of the nation's biggest banks tell us it's not all doom and gloom.
But China is having a difficult time managing its real estate downturn and weak market confidence.
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As steep and severe the plunge in PDD's stock on Monday, the uptrend appears intact. But no matter how you dice it, a 30% one-day drop is going to have lasting repercussions.
There's more than enough anxiety around the health of China's economy. A whiff of bad news is enough to send a company's stock down by double-digits.
The lack of consumption-directed stimulus, a property market that's stuck in reverse, weak borrowing despite low rates, and poor (weak) guidance by corporate heads = jittery shareholders.
Management cannot be deaf to investors' concerns. Going forward, they need to provide better, more detailed guidance given the more uncertain macro setting.
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https://x.com/BrianTycangco/status/1828428645502984352
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