Shares of PDD Holdings (NASDAQ: PDD) were popping today after the Chinese e-commerce giant posted another round of blistering growth in its fourth-quarter earnings report. Revenue and operating profit both more than doubled in the period.
As of 9:45 a.m., the stock was up 6% after opening up as much as 16% higher.
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PDD is destroying the competition
PDD, the parent of Pinduoduo and Temu, the fast-growing international discount e-commerce platform, blew past estimates in its fourth-quarter earnings report.
Revenue jumped 123% to $12.5 billion, which easily beat the analyst consensus at $11.14 billion. Adjusted operating income rose 112% to $3.46 billion, showing the company is also delivering strong margins as it's gaining leverage on its earlier investments in marketing and other overhead expenses.
On the bottom line, adjusted earnings per share jumped 108% to $2.40, which also crushed expectations of $1.61.
Co-CEO Jiazhen Zhao said, "We will continue our high-quality development strategy, stay dedicated to [offering] great value and exceptional service and keep building thriving communities that can benefit all."
What's next for PDD
PDD's stunning growth comes at a time when rivals like Alibaba and JD.com are struggling, experiencing barely any revenue growth. While the Chinese consumer has been weak, Pinduoduo is still taking market share in China from its competitors thanks to aggressive discounting and a social commerce model in which customers bundle orders with friends and family. Temu, meanwhile, has grown like wildfire abroad and is challenging fellow Chinese discount platform Shein.
The company did not offer guidance, but it continues to look like the best bet in the Chinese tech sector, as it has easily overcome the challenges that have upended its rivals.
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Jeremy Bowman has positions in JD.com. The Motley Fool has positions in and recommends JD.com. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
