Who Am I?....Episode 3 / Pinduoduo (PDD)

My track record is impressive

10 years ago I didnt exist

I’m the fastest company in history to achieve $100bn in market cap

In the last 2 years both my sales and profits have doubled

My financials and outlook are impressive

My ROIC is c.30%, my EBIT margin is c.30% and net cash is 25% of my market cap.

My revenue growth is expected to be over 20% over the next few years

I’m 100% digital, an AI beneficiary, and have been taking share everywhere I compete globally.

I’m incredibly cheap

My ex-cash GAAP PE has collapsed from over 20x last year to 6.5x today, falling to 5x in 2026

My valuation is partially blamed on my domestic roots and geopolitical concerns, but:

…my domestic government borrows at less than 2% over 10 years and is committed to stimulus

…I’m increasingly global: my international business, headquartered in the US, only launched in 2022 and has mushroomed into a $50bn+ business

…my international business isn’t profitable yet, but should be within 12 months, so while there’s likely headwinds ahead, its value isn’t capture in today’s PE multiple…i.e. you get it for free.

I have plenty of potential re-rating catalysts

…continue to compound, i.e. grow and take share

…visibility re uncertainties / headwinds, particularly for my international division

…demonstrate international profitability

…improve financial disclosures - helping investors to value my international division

…initiate buybacks - following the path of my closest domestic and global peers

…imagine if I span out my international division (0% of earnings but is incredibly valuable)


Who Am I?….I’m Pinduoduo (PDD)

Disclosure: the author owns securities in the company mentioned. Do Your Own Due Diliegence. Nothing is Investment Advice.

Uzo