"Pinduoduo: Too Cheap to Ignore"

Not if you miss top and bottom line and show worsening Margins!

I wrote recently about PDD that it “was too cheap based on the achieved and projected growth. A re-rating is probable” However, after todays earnings where they showed a miss on top and bottom line plus worsening Margins, no re-rating is likely soon!

Of note Management cited Increased investments in ecosystem “amid rapid changes in external environment”. S&M expenses were up 43% YOY yet revenue was up only 10%.

PDD has firmly found itself in the penalty box for now!