Nov 28, 2023

Pinduoduo, now PDD Holdings, will report earnings on Tuesday this week. The results will determine the fate of this year’s stock rally. 

PDD-–-Weekly-Chart

PDD – Weekly Chart

PDD continued to rally in 2023, reaching $116.95. However, the current move is more of a slow climb, weighed down by the economy. If global stocks continue pushing ahead, PDD can get closer to an all-time high, but traders should beware of a pullback. 

Asia-Pacific stocks fell Monday after the Chinese market slid due to a decline in property firms. At the same time, Japan’s service inflation jumped to a 45-month high. Data showed Japan’s service PPI rose 2.3% in October to its highest level since January 2020, up from 2% last month. 

According to government data, China’s industrial profits continued to shrink in November at the slowest pace in almost a year. That could negatively affect PDD earnings, and analysts will want to see strength in revenue and profit at the e-commerce firm. 

For the third quarter, estimates for sales are set around US$7.22 billion, indicating a growth of 44% from the prior-year quarter. The consensus for earnings per share is around $1.23, suggesting a rise of 1.6% from the reported number for the year-ago quarter. EPS is up 26% this year. 

Analysts will examine the company’s efforts to drive innovation through technology across its products and services. This could lead to a surprise in earnings. Pinduoduo has also made strides in integrating online traffic with offline retail. 

The company’s efforts in agriculture and groceries are also expected to have boosted its revenue. Stronger partnerships with local communities, shops, farmers, and agri-merchants should have improved performance in that area.

China has weighed on the year’s stock rally, and earnings this time will have to outweigh the country’s continued negative sentiment.

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