$PDD Holdings Inc(PDD)$ Alibab

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$PDD Holdings Inc(PDD)$ Alibaba and PDD are platforms that generate revenue mainly through commissions and ads. JD is a retailer that generates revenue through sale of inventories. If you understand the business model of each, it'd be easy to understand that JD's P/S will always be lower than both since it records most of its GMV as sales (higher base).

A more useful metric is fwd P/GMV or fwd P/E. Right now JD is still the cheapest among the three trading just below 7x (fwd P/E), while PDD is at 7x and Ali is at ~9x. Valuation is now more aligned with their market share rankings and the market is not valuing PDD as the outperformer anymore. I'd be more intrigued on the narrative that this company is now trading at just 7x despite having (perhaps) the best outlook out of the three in terms of EPS growth, margins, and catching the consumer downtrading in China.

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