i_SVG Created with Sketch.

Capital Markets Elite Group is not a registered U.S. broker-dealer. It does not accept a U.S. Person as a client if that person was solicited by Capital Markets Elite Group. (The definition of “U.S. Person” is here.) Capital Markets Elite Group will rely on a certification from a potential customer that the potential customer either is not a U.S. Person or has not been solicited, directly or indirectly, by Capital Markets Elite Group and has not been induced by Capital Markets Elite Group to engage in securities transactions. In particular, they must certify that they were directed to this website by someone other than Capital Markets Elite Group. They must also certify that they understand that they will not be protected by U.S. laws, regulations and supervisory structures applicable to broker-dealers registered in the U.S. and they do not expect such protections to apply. You should give these certifications only if they are true. If you wish to proceed to the website knowing that, please click “Continue” below. Otherwise click “Leave Website”

Leave Website
CPro $0 Commission | $0 ECN Fees Promotion for the period 04th November 2024 - 31st January 2025. Click here for Terms and Conditions.

Cash Back Promotion for the period 16th September 2024 - 15th December 2024. Click here for Terms and Conditions.

Level Up to $0 Commission Promotion for the period 16th September 2024 - 15th December 2024. Click here for Terms and Conditions.
Start Trading
Equities and ETFsOptions
CProCAP it ALLDAS Trader ProSterling Trader ProCompare Platforms
Pricing StructureEquities and ETFsOptionsMarket DataTrade Ideas Bundles
About UsTrends and InsightsContact UsFAQs
Start Trading Login
Alibaba 2

This Chinese E-Commerce Company Is Up Almost 20% Today

Aug 29, 2022 | About 3 minutes

Ticker Symbol: PDD

While Alibaba remains the king of internet shopping in China, one smaller competitor has been catching up quickly. And after reporting very strong second-quarter results, shares in the Nasdaq listed Pinduoduo are surging by over 20% this morning. The company is now up around 21.5% on a year-to-date basis, well ahead of the 14.2% decline in the Nasdaq Golden Dragon China Index and the 16.8% decline in Alibaba. Since its initial public offering in 2018, shares in the e-tailer have gained 270%, versus the 50% decline in Alibaba.

The company reported second quarter revenue of 31.44 yuan, up 36% year over year, and well ahead of the estimated 23.6 billion yuan. Revenue from online marketing services were up to 25.7 billion yuan, a 39% surge from the same time in 2021. The average Wall Street estimate was for revenue of 18.6 billion yuan. Transaction services were up a more tepid 3% year over year, but about a billion yuan ahead of the expected 5.23 billion yuan. The second quarter also included the annual 618 shopping festival, where online retailers entice customers with discounts in China.

Adjusted earning per American depositary receipt grew to 7.54 yuan, crushing the Street’s expectations of 2.75 yuan. The company said net income for the quarter was $8.9 billion yuan, representing a more than three-fold increase over the figure reported in 2021. Management pointed to recovering consumer sentiment in China following months of upheaval brought about by rising cases of COVID in the country. The subsequent lockdowns and quarantining of major cities have weighed on the Chinese economy and reduced consumer spending significantly.  

The Chinese government has also been stepping up supervision of the Chinese technology sector, which has weighed on investor outlook. Beijing has recently promised to relax its regulatory crackdown on the technology sector, after nearly 2 years of strict supervision, reviews, and mandatory changes soured investor sentiment. Another positive for the company in the near future would be its announced expansion into the North American market for the first time. The growth into the U.S. and Canada could also represent a huge opportunity for Pinduoduo, especially as the Chinese economy slows.

Despite the environment, Pinduoduo reported a net income margin of 28.3%, the highest in the company’s history. Vice President of Finance for the company, Jun Liu, said that the postponement of certain projects and certain business-related expenses during the quarter allowed the company to post high profitability. Research and development expenses, for example, were up 12% year over year to 2.61 billion yuan, but much lower than the 3 billion yuan analysts were expecting.

This content is provided for general information purposes only and is not to be taken as investment advice nor as a recommendation for any security, investment strategy or investment account.