Thanks for the write-up. Follow your posts regularly.. It seems massive market over reaction as even if profit growth slows down to 15-20%, the current multiple seems Vv low. I sense management was trying to guide toward declining profit ‘growth’ which is natural at this scale NOT decline in profits which the violent market reaction seems to assume
They didn’t say “decline in profit growth.” I think they were deliberately vague. They said “decline in profitability.” It feels like they were intentionally vague, repeatedly emphasizing that things will be bad going forward.
Great recap, why do you think that they needed to repeat 5 times the profitability decline and the deceleration in growth. This call was very different from prior calls as you stated
It was like talking to a dumb child: “We hinted that things might get worse in the future, but in the last calls, you all didn’t get it. So now, we’re telling you five times—hopefully, this hammers the message home.” That’s basically what they were doing.
Chose war on the shareholders… What’s your opinion on the guidance, do you think they were exaggerating? Douyin and taobao just gave up competing with PDD on price and competing on merchants shouldn’t be as bad?
I’m not sure either. I had the impression that others couldn’t compete on low prices, which seemed like a good thing for them. I even wrote about it. But this earnings call was extremely strange to me—it felt like they did everything they could to freak out investors and scare them away. I don’t quite understand the rationale behind it, and I’m still not sure what to make of it.
It feels to me that Huang Zheng just doesn't want to be "Shoufu" haha.
Haha, yes, being too 舒服 isn’t always good. Sometimes, we need a little drama in our lives.
Tariff?
The same Tariff is applied to all E-Commerces (PDD, Alibaba, Meituan, JD, etc).
Q2 2025 Financial Performance:
PDD has outperformed and outshined all the peers such as Alibaba, JD, Metitian, etc, in the First Half 2025 & Q2 2025.
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In terms of Relative P/E ÷ ROIC Multiple, PDD is the lowest among the peers, too undervalued.
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In the short run, the market is a voting machine but in the long run, it is a weighing machine.
Benjamin Graham
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I bet very little investors know what weighing machine really is.
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Weighing Machine
= P/E ÷ ROIC Multiple
Thanks for the write-up. Follow your posts regularly.. It seems massive market over reaction as even if profit growth slows down to 15-20%, the current multiple seems Vv low. I sense management was trying to guide toward declining profit ‘growth’ which is natural at this scale NOT decline in profits which the violent market reaction seems to assume
They didn’t say “decline in profit growth.” I think they were deliberately vague. They said “decline in profitability.” It feels like they were intentionally vague, repeatedly emphasizing that things will be bad going forward.
Great recap, why do you think that they needed to repeat 5 times the profitability decline and the deceleration in growth. This call was very different from prior calls as you stated
It was like talking to a dumb child: “We hinted that things might get worse in the future, but in the last calls, you all didn’t get it. So now, we’re telling you five times—hopefully, this hammers the message home.” That’s basically what they were doing.
Chose war on the shareholders… What’s your opinion on the guidance, do you think they were exaggerating? Douyin and taobao just gave up competing with PDD on price and competing on merchants shouldn’t be as bad?
I’m not sure either. I had the impression that others couldn’t compete on low prices, which seemed like a good thing for them. I even wrote about it. But this earnings call was extremely strange to me—it felt like they did everything they could to freak out investors and scare them away. I don’t quite understand the rationale behind it, and I’m still not sure what to make of it.
I have the exact same feeling.