To The Moon

By Jeremy Bowman

KEY POINTS

• Pinduoduo easily beat expectations on the top and bottom lines.
• The company's investments in its agricultural marketplace seem to be paying off.
• It easily outperformed rivals Alibaba and JD.com in the quarter.

A better-than-expected earnings report drove the Chinese e-commerce stock.

What happened

Shares of Pinduoduo($Pinduoduo Inc.(PDD)$ )were surging today after the Chinese e-commerce company posted strong results in its second-quarter earnings report, easily outpacing analyst expectations.

So what

The company, which has become China's largest online market for agricultural products, posted strong sales during the June 18 shopping holiday, and operating income surged as the company controlled sales and marketing spending, its biggest operating expense.

CEO Lei Chen said, "We saw a recovery in consumer sentiment in the second quarter, especially during the [June 18]
shopping festival, a reflection of the resilience of overall consumption." Management also promised to continue investing in areas like agriculture and research and development.

Now what

While Chinese e-commerce stocks have been dangerous territory for investors because of regulatory challenges, there's a lot to like about Pinduoduo's business right now, especially at the current share price.

$Pinduoduo Inc.(PDD)$

Resource: the Motley Fool