Pinduoduo pushing upwardsPinduoduo has shown the e-commerce space how an earning beat's done, and its share price is reaping the rewards.
- Chinese e-commerce platform Pinduoduo has topped expectations for Q3 – causing its share price to skyrocket by 12.6% on Monday. The company reported revenue of $4.9bn, beating estimates of $4.29bn and marking a 65% increase YoY. It also beat EPS estimates, reporting $1.20 per share against estimates of $0.72.
- The positive quarter was partly thanks to a new operational expansion since last quarter in the form of its new platform Temu, which focuses on selling low-cost Chinese-made products primarily to the US. The company however said the platform was still in its early stages.
- Pinduoduo isn’t the only Chinese online retailer to have had a beneficial quarter.. JD.com announced an 11.4% rise in quarterly revenue last week and competitor platform Alibaba reported 3% revenue growth for Q3, as consumer habits started to look a little healthier.
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PinduopumpChinese e-commerce giant Pinduoduo hits new 2022 highs after reporting a surprisingly pleasant recovery in consumer sentiment.
- Shares jumped over 25% in Monday’s intraday trading to hit their highest levels since November 2021 before closing up 14%, building on last week’s 25% gain. The e-commerce brand posted a major windfall in Q2 and posted EPS that soared a wow-worthy 157% to hit $1.13 on revenues that jumped 36% to beat forecasts at $1.25bn.
- Management said consumer sentiment was pumping after people endured extra lockdowns this year leading to pent up demand, and was given an extra boost by China’s midyear shopping festival – but, the company warned that the mind-boggling profit surge was partly thanks to reduced costs and delayed projects and that growth will prolly slow.
- Pinduoduo was actually kind of a standout this quarter. Many of its tech giant rivals like Alibaba and JD.com have reported their worst quarter of growth ever as they’ve faced pressure from a slowing Chinese economy – which grew just 0.4% in Q2 – amid strict covid laws and extended business closures.
Pinduoduo’s paltry earningsGrocery tech star Pinduoduo’s poor earnings pile onto a slew of disappointing results from U.S.-listed Chinese stocks, sending prices plummeting.
- The stock was down over 16% on Friday after the e-commerce platform posted a brutal revenue miss.
- Its $3.37bn in revenue was up 51% y-o-y but missed expectations of $4.04bn, with EPS coming in at $0.34.
- Covid has hit consumer spending as fresh lockdowns around the nation prompt economic concern.
- Annual shopper count was up by only 19%, marking its slowest level of growth as a public company. Although it does have 900m users already.
- Prices are down 61% for the year after a Chinese crackdown on big tech companies in the name of consumer protection.
- It’s been a sad earnings season for U.S.-listed Chinese stocks. Alibaba (BABA) is down nearly 18% since its regulatory-induced earnings miss, and Baidu (BIDU) lost 11% last week on the back of slowing growth.
Illustration by TradingView