Pinduoduo

[Wildreamz]

Considering PDD is not really a "true" monopoly (still small), and doing everything they can to alleviate poverty in the rural area (including donating all their recent earnings); which is definitely the priority of Beijing. Perhaps that's why they have rebounded quite significantly (~30%) from recent lows.

Li Lu having a position (~2.25% of US portfolio) in it, helps the bull case slightly (for me).

Currently, it's trading at ~10.5x PS ratio, PE ratio ~80 (run rate basis) most recent quarter revenue growth is +106%, net margin is ~10.5%.

(not vested)

[dreamybear]

How Temu Makes Money From $10 Smartwatches From China
https://www.youtube.com/watch?v=quGoGgbP-aE
"Bargain e-commerce company Temu has had a whirlwind 2023.

Quietly launching its app in September 2022, it only took the company a few weeks to top app store charts, edging out Amazon, Walmart and even fast-fashion brand Shein. By February 2023, the 5-month-old company made its TV debut during Super Bowl LVII, airing two commercial spots totaling an estimated $14 million. With an annual advertising budget of about $1.4 billion, Temu is focused on aggregating a user base of nearly 100 million people by year-end....."

[dreamybear]

Interesting read ... long article. The first few parts are rather technical(IT). Maybe skip those "chim" IT portions and read those more related to investing...  

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We believe PDD is a Dying Fraudulent Company and its Shopping App TEMU is Cleverly Hidden Spyware that Poses an Urgent Security Threat to U.S. National Interests
https://grizzlyreports.com/we-believe-pd...interests/
"....
We believe PDD’s financials are notoriously unreliable.
- Even the usually promotional sell side analysts have pointed out that PDD’s accounting is akin to a “Black Box” as disclosure becomes ever more opaque.
- Despite being a company with a market cap of appx $135 billion, PDD has not had a CFO since 2018. The key financial positions are a revolving door. There seems to be no accountability.
- The local audit partners from Ernst&Young Hua Ming LLP are in our judgment untrustworthy and have audited numerous Chinese companies whose shares have proven next to worthless in the past.....

Important operating metrics indicate PDD’s China business is rapidly declining while it loses a fierce battle with competitors such as Alibaba and JD......"

[Choon]

Sharing my research on Pinduoduo, which I recently started building a position in.

If you're interested, you can read the full write-up here: 
https://greatcompounders.substack.com/p/...t?r=70e925

If you find the research useful, I'd be grateful if you subscribe for future write-ups.

***

11.1. Many, if not all, companies claim to manage for the long term. PDD, however, appears genuinely resolute in its focus on long-term value and is willing to sacrifice near-term profitability.

11.2. Building a healthier marketplace through a higher-quality merchant and manufacturer ecosystem is a major undertaking, given the scale of the ecosystem, and the inherent tension with PDD's existing business model. How successful PDD will be, or how long it will take to achieve meaningful results, is anyone’s guess. But tackling difficult challenges should help PDD avoid stasis and keep its culture imaginative.

11.3. For investors, PDD’s current valuation of 9.6x FY27E earnings (with FY27E earnings depressed well below FY25A), on an ex-cash basis, offers an attractive entry point to own part of a global marketplace whose GMV could expand substantially, as PDD remains resolute in raising the quality of its marketplace and building greater consumer trust. PDD may well realise its target of building another PDD-sized business within three years.

***

[dzwm87]

I am reading this thread post in between two banners advertising Pinduoduo

You can try out their app. They have free shipping to Singapore and Malaysia although personally, I am not impressed with the user experience and there are a lot of blatantly fake products.

Frankly at this stage, it is the same thesis being rephrased over and over again -- Costco + Disney model with the usual 'qualitative' sound bite. I think they operate on another objectives and if they can, they will probably choose to go private given they are more or less self-funded now.

[Choon]

I am reading this thread post in between two banners advertising Pinduoduo

You can try out their app. They have free shipping to Singapore and Malaysia although personally, I am not impressed with the user experience and there are a lot of blatantly fake products.

Frankly at this stage, it is the same thesis being rephrased over and over again -- Costco + Disney model with the usual 'qualitative' sound bite. I think they operate on another objectives and if they can, they will probably choose to go private given they are more or less self-funded now.

I like PDD's app layout. Simpler and clearer.

So far, my shopping experience on PDD has been positive. It opens up the wide variety of consumer goods in China.

I have tried RTE black sesame paste (great taste). RTE red bean soup (great taste). Looking forward to receiving Yunnan ham.