|Bid||0.00 x 1100|
|Ask||0.00 x 1000|
|Day's range||86.61 - 95.48|
|52-week range||19.11 - 95.48|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Earnings date||19 Aug 2020 - 24 Aug 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||512.52|
(Bloomberg) -- Colin Huang’s ascent is one for the history books: In just six months, his fortune swelled by $25 billion -- one of the biggest gains among the world’s richest people.His Pinduoduo Inc., a Groupon-like shopping app he founded in 2015, has become China’s third-largest e-commerce platform, with a market value of more than $100 billion. In the first quarter, as the coronavirus pandemic caused most of the nation’s economy to grind to a halt, PDD’s active users surged 68% and revenue jumped 44%, the company said in May.Now Huang, who has overseen the firm as its American depositary receipts have more than quadrupled in less than two years, has stepped down as chief executive officer.At one point, his net worth climbed as high as $45 billion, placing him just behind China’s wealthiest people -- Tencent Holdings Ltd.’s Pony Ma and Alibaba Group Holding Ltd.’s Jack Ma -- on the Bloomberg Billionaires Index. That’s even as PDD continued to post losses, primarily because it chases growth with the help of generous subsidies and has been known to spend more on marketing than it earns in sales.“Pinduoduo was perfectly positioned for people being stuck at home,” said Tom Ronk, CEO of Century Pacific Investments in Newport, California.Huang, who controlled 43.3% of PDD shares, has reduced his stake to 29.4%, according to a June 30 regulatory filing. His fortune now stands at $30 billion.That excludes a $2.4 billion charitable holding that he shares with PDD’s founding team, and $7.9 billion that went to Pinduoduo Partnership, of which Huang and newly named CEO Lei Chen are members. The partnership will help fund science research and management incentives, according to a letter following Huang’s resignation. The wealth estimate also excludes $3.9 billion that people familiar with the matter said was transferred to an angel investor.PDD declined to comment on Huang’s holdings or net worth.Facing ChallengesHe will remain chairman and work on the company’s long-term strategy and corporate structure to help drive the future of the e-commerce giant, PDD said.“PDD is still facing some high-level challenges in product supply, relationship with brand merchants, logistics and payments,” said Shawn Yang, an analyst at Blue Lotus Capital Advisors. “Colin may want to focus more on these issues.”PDD’s success hinges on deals, which have become particularly popular with customers looking for bargains as the world’s second-largest economy slows. Most of its users come from smaller Chinese cities, and the app gives them extra discounts when they recommend a product through social networks and get friends to buy the same item.Fen Liu, a homemaker in Quanzhou, a provincial city in Fujian, said she accrued enough coupons with her friends’ help to reduce the price of a suitcase to zero.“I couldn’t believe my eyes when I saw my suitcase arrive in the mail,” she said. “It’s made me a loyal Pinduoduo user ever since.”‘Bargain Hunters’While PDD’s aggressive price-reduction strategies have helped win over people with lower incomes, they may stifle the company’s efforts to attract wealthier consumers, according to Charlie Chen and Veronica Shen, analysts at China Renaissance Securities in Hong Kong.“PDD’s users are largely bargain hunters reluctant to buy large-ticket items,” they wrote in a June 29 note, adding that the company’s image remains a key obstacle to users spending more. “We believe PDD is working to change its low-price brand image -- but this could be costly.”That may require heavy marketing and hurt margins further despite a strong user-base foundation for future growth, the analysts said. And PDD’s management has offered no clear path to profitability.Last year, the company’s “10 Billion RMB Subsidies” campaign, which is ongoing, led to a $2 billion increase in sales and marketing expenses to $3.9 billion, and those costs have been at 90% to 120% of revenue for the past two quarters, China Renaissance said.For the nation’s June 18 shopping festival, PDD provided a subsidy program with no cap across different product categories to push spending and attract more users. Other fast-growing Chinese startups -- including rival Meituan Dianping, ride-hailing app DiDi Chuxing and Starbucks Corp. competitor Luckin Coffee Inc. -- have also adopted subsidies strategies to maintain customer loyalty.Huang, 40, grew up in the eastern city of Hangzhou, where Alibaba has its headquarters. After receiving a degree at Zhejiang University, he went to the University of Wisconsin for a master’s in computer science. He began his career at Google in 2004 as a software engineer and returned to China in 2006 to help establish its operations in the country.He then became a serial entrepreneur. He started his first company in 2007, an e-commerce website called Ouku.com that he sold three years later after realizing it was too similar to thousands of others. He then launched Leqi, which helped companies market their services on websites like Alibaba’s Taobao or JD.com Inc., and a gaming firm that let users play on Tencent’s messaging app WeChat. Both took off and Huang found himself “financially free,” according to a 2017 interview.After getting an ear infection, he decided to retire in 2013 at age 33. But following a year of pondering what to do with his life -- he contemplated starting a hedge fund and moving to the U.S. -- he came up with the idea of combining e-commerce and social media. At the time, Alibaba dominated the online business, and WeChat became a must-have application on smartphones in China.The tables have turned since. In 2018, Alibaba launched a PDD-style app in an attempt to lure smaller-town users with bargains. It came months before Huang took his company public in New York, raising $1.63 billion in its July 2018 initial public offering. Since then, PDD has surged 389%, while Alibaba has gained just 13%.In 2017, Huang had said he was unlikely to spend the rest of his life at PDD. While he’s still chairman of the company, he now wants to give more responsibility to younger colleagues to keep the entrepreneurial spirit as PDD matures, he wrote in a letter to employees.“We envision Pinduoduo to be an organization that creates value for the public rather than being a showoff trophy for a few or carry too much personal color,” Huang said. “This will allow Pinduoduo to continually evolve with or without us one day.”(Updates PDD, Alibaba moves in 22nd paragraph. A previous version of this story corrected Fen Liu’s location.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of Pinduoduo (NASDAQ: PDD) were climbing to all-time highs today on a broader wave of gains among Chinese tech stocks. A strong June manufacturing report on Wednesday may have helped lift Chinese stocks. Pinduoduo said Wednesday morning that its founder and CEO, Colin Huang, would step down in a surprise move (he is only 40).
(Bloomberg) -- Colin Huang stepped down as chief executive officer of Pinduoduo Inc. after building the five-year-old startup into a force in China’s e-commerce industry and, in the process, becoming one of the country’s richest people.He’s turning the role over to Lei Chen, another founder at the Shanghai-based company, effective immediately, PDD said in a letter to employees posted on its website. Huang, 40, will remain chairman.“I hope that through the management changes, we can gradually hand over more managerial duties and responsibilities to our younger colleagues, give space and opportunities for the team to grow, and drive Pinduoduo to become a more mature company with continuous entrepreneurial spirit,” Huang wrote in the letter.While tech founders often eventually cede management duties to lieutenants, Huang is handing over the reins just a few years after PDD’s start. Huang and his co-founders began the group-shopping app in 2015 at a time when Alibaba Group Holding Ltd. seemed to have a lock on the e-commerce business in China.But PDD provided an innovative service with discounted goods and customized offerings, and went public in 2018. The company’s shares have soared more than four-fold since then and its market cap is about $102 billion. Huang’s net worth is $44.3 billion, the third-highest in China, according to the Bloomberg Billionaires Index.Analysts at Jefferies and Citigroup Inc. said the move was unexpected and a surprise. PDD’s shares were little changed in U.S. trading.Huang, previously an engineer at Google, said in the letter that he had transferred around 371 million ordinary shares currently under his name to the Pinduoduo Partnership, and that he wanted some of the stock to be used for research and social responsibility. That transfer is equal to about 7.7% of total shares, he said. In addition, Huang said he had officially set up a charity foundation and that together with the founding team, had donated to it around 114 million Pinduoduo shares, or about 2.4% of total shares.In a separate Q&A circulated to media, Huang said he would step back from day-to-day management to work on the company’s long-term strategy and corporate structure, and devote more time to fundamental research that could drive the future of PDD.A data scientist by training, Chen has served as chief technology officer since 2016. He said he will focus on growing the company’s newer business units, citing its shipping information system as an example. “This division of labor will help us steer the company in its next phase of growth and development,” Chen said.(Adds more detail throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Some big winners in the world's most populous country can keep the good times going in July and beyond.
Pinduoduo Inc. ("Pinduoduo" or the "Company") (PDD) announced today that its Board of Directors has appointed Mr. Lei Chen as Chief Executive Officer, effective immediately. Mr. Zheng Huang, the Company’s Chairman and former Chief Executive Officer, will remain as Chairman of the Board. Mr. Chen is one of the founding members of the Company and has served as Chief Technology Officer of the Company since 2016.
Colin Zheng Huang, founder of the high-flying Chinese online shopping company Pinduoduo, is stepping down as chief executive and has reduced his personal stake in the company by roughly $14.3bn. “I will take a step back from day-to-day management of the company’s operations and work with the relevant teams and the board on our long-term strategy and corporate structure,” Mr Huang said in a statement. In a filing to the US Securities and Exchange Commission, Pinduoduo disclosed that the number of shares held by Mr Huang, either directly or through offshore trusts that he controls, had fallen by 665m since March 31, equivalent to 13.9 per cent of the total shares.
Chinese online retailer Pinduoduo has never made a single quarter of operating profit, rather than any quarterly profits as stated in an article on June 26. Copyright © 2015 The Financial Times Limited. ...
The most valuable company in the world never to have made a single quarter of operating profit is on a stock market run. Pinduoduo, which claims to have reinvented online shopping in China, has seen its share price rise by more than 130 per cent in the past three months, giving it a market value of $101bn, above that of Uber or Sony and twice that of Baidu or Foxconn. Its founder and chief executive, Colin Zheng Huang, who earned his master’s from the University of Wisconsin-Madison and later worked at Google, is now China’s third-richest man, behind Jack Ma, the founder of Alibaba.
(Bloomberg) -- Tencent Holdings Ltd.’s $40 billion surge this week and the recent ascent of Pinduoduo Inc. have reshuffled the ranking of China’s richest people.The country’s largest game developer has surpassed Alibaba Group Holding Ltd. as Asia’s most-valuable company, with its shares rising above HK$500 in intraday trading Wednesday for the first time. Pinduoduo, a Groupon-like shopping app also known as PDD, has more than doubled this year.The rallies have propelled the wealth of their founders, with an added twist: Tencent’s Pony Ma, worth $50 billion, has surpassed Jack Ma’s $48 billion fortune, becoming China’s richest person. And Colin Huang of PDD, whose net worth stands at $43 billion, has squeezed real estate mogul Hui Ka Yan of China Evergrande Group out of the top three earlier this year, according to the Bloomberg Billionaires Index.The coronavirus pandemic has accelerated the digitization of the workplace and changed consumers’ habits, boosting shares of many internet companies. Now tech tycoons are dominating the ranks of China’s richest people. They occupy four of the top five spots: Ding Lei of Tencent peer NetEase Inc. follows China Evergrande’s Hui.‘Perform Strongly’Tencent has come a long way since hitting a low in 2018, when China froze the approval process for new games. Since then, the stock has almost doubled, and last month the tech giant reported a 26% jump in first-quarter revenue.“Tencent’s online games segment will probably perform strongly through the Covid-19 pandemic, and most of its other businesses are relatively unscathed,” said Vey-Sern Ling, a Bloomberg Intelligence analyst.That has been a boon for Pony Ma, 48, who owns a 7% stake in the company and pocketed about $757 million from selling some 14.6 million of his Tencent shares this year, data complied by Bloomberg show.The native of China’s southern Guangdong province studied computer science at Shenzhen University and was a software developer at a supplier of telecom services and products before co-founding Tencent with four others in the late 1990s. At the time, the company focused on instant-messaging services.It has been a long comeback for Pony Ma. He overtook real estate tycoon Wang Jianlin as China’s second-richest person in 2013 and topped Baidu Inc.’s Robin Li as the wealthiest in early 2014. Later that year, Alibaba went public in the U.S., catapulting Jack Ma’s fortune.Bloomberg Intelligence’s Ling notes, however, that Tencent’s jump this year has lagged behind some internet peers, especially those in e-commerce, games and online entertainment. Just consider: Tencent shares have climbed 31% in 2020, while PDD’s American depositary receipts have more than doubled. Alibaba, meanwhile, has advanced just 6.9%.(Updates with Alibaba shares in last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Alibaba Group Holding Ltd. and JD.com Inc. handled record sales of $136 billion during the country’s biggest online shopping gala of the post-pandemic era, suggesting China’s nascent consumer spending recovery has legs.The twin e-commerce giants put nationwide consumption to its first major test since the pandemic with the annual “6.18” summer extravaganza that concluded Thursday. Transactions across JD’s online platforms during the 18-day marathon leapt 34% to 269.2 billion yuan ($38 billion), a faster pace than in 2019. And Alibaba said it handled 698.2 billion yuan during its own campaign, without a year-earlier comparison. JD’s shares stood largely unchanged after rising 3.5% in their Hong Kong debut.China’s largest retailers counted on pent-up demand during the event -- created by JD to commemorate its June 18 founding anniversary -- to make up for lost sales during a coronavirus-stricken March quarter. Global brands and smaller merchants alike stocked up on goods for months in anticipation of an online bargain spree surpassed only by the Nov. 11 Singles’ Day in scale. The final tally underscored how hundreds of millions of shoppers remain willing to spend after the world’s No. 2 economy contracted for the first time in decades, especially given huge discounts as Covid-19 shifted buying to the internet.“The strong GMV at 6.18 will help to dispel market anxiety about virus-related disruptions,” Bloomberg Intelligence analyst Vey-Sern Ling said. “Chinese e-commerce platforms will probably deliver strong 2Q sales and profit recovery due to pent-up consumer demand and an accelerated shift to digital consumption channels driven by the virus.”This year’s deals-fest culminated with the biggest bargains Thursday and featured more generous subsidies than ever before, as well as an unprecedented cohort of live-streaming personalities. Competition also intensified with the likes of ByteDance Ltd. and Kuaishou -- whose video app now sells JD goods -- vying for buyers.“Chinese and foreign brands had sluggish sales due to the pandemic, and 6.18 has become their most important opportunity in the first half,” JD Retail Chief Executive Officer Xu Lei said in an interview with Bloomberg Television. For discretionary items like home appliances, “we’ve seen a recovery in consumption.”Read more: Chinese Shoppers Can Go Out Again. Online Buys Show They Won’tChinese retail suffered a record collapse in the first three months of 2020. While it’s on the mend, latest data shows private consumption still sluggish, dashing hopes of a V-shaped recovery as people head back to work. The picture is complicated by the fact that Covid-19 has kept people away from stores and shifted an unknown proportion of retail activity online, propping up online purchases.JD has projected revenue growth of 20% to 30% this quarter. Xu -- widely viewed as the front-runner to succeed billionaire founder Richard Liu -- says JD is on track to meet that goal and isn’t threatened by competitors encroaching upon its turf, like in consumer gadgets.“I don’t dance with them, I dance with users,” he said.Signs had grown this month that China’s e-commerce giants were on track for record sums as measured by gross merchandise value, or total value of goods sold. During the first ten hours of its 6.18 campaign, Alibaba’s Tmall business-to-consumer marketplace logged sales 50% higher than during the same period last year, after participating brands doubled. JD has said sales of imports like HP laptops and Dyson hairdryers soared, while it’s selling more fresh produce in smaller cities.Read more: JD’s Outlook Beats After E-Commerce Surges in China LockdownInitiated in 2014 as a riposte to Alibaba’s Singles’ Day, 6.18 has become yet another annual ritual for e-commerce companies and their offline partners from Walmart Inc. to Suning.com Co. Beyond headline figures, it’s less clear how much it contributes to the bottom line given the enormous discounting involved.“The result is good as far as growth is concerned, but in terms of margins, all the players will see the consequences,” said Steven Zhu, analyst at Pacific Epoch. “It’s just what I call paid-GMV for all the platforms. It’s the time that people have to have a good number after the coronavirus, so they just do it at whatever the cost.”Alibaba, along with brands on its platforms, committed cash and other coupons worth a total of 14 billion yuan, according to the company. JD said it offered 10 billion yuan in subsidies.“User growth and retention, and the digitization of brands and merchants are key considerations” when Alibaba pushes subsidies during promotions like 6.18, said Alibaba Vice President Mike Gu, who heads Tmall’s fashion and consumer goods businesses.Read more: Alibaba Drops After Projecting Slowing Growth in Uncertain TimesMore broadly, sales of fast-moving consumer goods on the Tmall and Taobao marketplaces in the June quarter have so far exceeded the pace of 2019’s final quarter, Gu said in an interview. Thanks to 6.18, apparel growth this month has also climbed back to pre-Covid-19 levels, he added.Live-streaming is also playing a bigger role during this year’s 6.18, at a time Covid-19 is fueling an unprecedented boom in online media. Alibaba’s Taobao Live championed the use of influencers to sell everything from lipstick to rockets, prompting rivals like JD and Pinduoduo Inc. to follow suit.Social media companies like TikTok-owner ByteDance and Tencent Holdings Ltd.-backed Kuaishou are jumping on the bandwagon. Their mini-video platforms in China have lured a long list of tech chieftains hawking products of their own to live-streaming fans: The latest was NetEase Inc.’s usually reclusive founder, William Ding. Last week, his debut on Kuaishou amassed 72 million yuan of sales in just four hours.“I’ve never eaten beef jerky as tasty as this in the last twenty years,” the billionaire said during the livestream.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Bankers hoping for a bonanza from Hong Kong share sales by U.S.-listed Chinese companies should contain their excitement. Low fees and the hangover of the Luckin Coffee Inc. scandal are likely to put a damper on the rewards.Hong Kong’s market for stock offerings is booming. Online retailer JD.com Inc. is raising as much as $4.1 billion in the world’s second-biggest share sale this year, days after internet gaming company NetEase Inc.’s $2.7 billion listing. There’s a line of candidates for Hong Kong flotations, driven by the prospect that the U.S. will delist companies that can’t commit to proving they are free from foreign government control.That’s a boon for the city and its stock-exchange operator, after China’s plans to impose a national security law raised questions over Hong Kong’s future as an international financial center. The NetEase and JD.com offerings were both heavily oversubscribed by retail and institutional investors, showing the strength of demand for U.S.-traded Chinese tech companies. These and upcoming deals may not deliver the windfall to investment bankers that such a pipeline would usually promise, though.For one thing, secondary listings earn a lot less in fees than initial public offerings. NetEase is paying the banks that worked on its Hong Kong flotation just 0.25% of the proceeds, compared with a standard rate for IPOs of 2% to 3%, as my colleague Julia Fioretti notes. Such deals earn less because the companies are already listed, meaning less work is required from banks to introduce their businesses to investors.Secondly, not all companies eligible to sell shares in Hong Kong can be expected do so. There are 42 Chinese companies in the U.S. that qualify for Hong Kong secondary listings, according to analysts at UBS Group AG. Should they issue 5% of their stock over the next 12 months, that would mean $27 billion in funds raised. The actual amount may come in far short of that. Blame the fall of Luckin, the Starbucks competitor that faces delisting from Nasdaq after acknowledging that it fabricated sales. The episode has damaged the reputation of Chinese companies overseas and is having a cautionary impact on investors, banks and potential listing candidates.Unlike Hong Kong, the U.S. market has a disclosure-based system that makes listing — and delisting — easier. Investors subject to corporate fraud can seek redress through class-action lawsuits (Luckin and its IPO arranger, Credit Suisse Group AG, have both been sued). Lacking such legal safeguards, Hong Kong has a gatekeeper for its market, with regulators vetting listing candidates. Companies and their sponsoring banks need to factor in this added scrutiny.As for investors, they may feel they’ve already had the pick of the U.S.-listed Chinese contingent. Alibaba Group Holding Ltd., the first to sell shares in November, JD.com and NetEase are three of the four biggest by market capitalization (the other is Pinduoduo Inc.). They are all well known and with track records as listed companies stretching back years. As the list goes down to encompass smaller and lesser-known enterprises, investor enthusiasm may wane.Not all businesses can match the excitement of the tech trio. Will investors flock to Yum China Holdings Inc., operator of KFC outlets in the country, for example? American investors have taken to Yum, which has the highest percentage of U.S. institutional ownership among the group. This investor base may be unwilling to switch to Hong Kong shares, a factor that may affect demand and post-listing liquidity.Then there’s online travel agency Trip.com Group Ltd., also on the roster of upcoming secondary listings. It has the technology sheen, but will investors be able to overlook the hammering that the world’s tourism companies have taken from the coronavirus pandemic?The reality is that while secondary listings are good business, “there are bigger opportunities in other products for investment banks in the region,” according to Amrit Shahani, London-based research director at analytics company Coalition Development Ltd. First-quarter IPO fees for the top 12 investment banks that Coalition follows in the region, from Goldman Sachs Group Inc. to Citigroup Inc., were around $150 million, Shahani said; they made a combined $1.5 billion from foreign-exchange trading during the period.So things are looking up after all. Just not in the place you might expect. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
China's second- and third-largest e-commerce marketplaces just partnered with one of its largest electronics and appliance retailers.
(Bloomberg) -- Alibaba Group Holding Ltd. pioneered the use of live-streaming hosts to sell everything from lipstick to smartphones in China. Now, the e-commerce giant wants to repeat that success globally with the help of a million influencers on forums from TikTok to Instagram.AliExpress, the company’s online marketplace for shoppers outside China, is on the hunt for social media personalities to hawk wares on its online malls around the world. It’s looking to attract more than 100,000 content creators this year to its recently launched AliExpress Connect, rising to over a million in three years. The platform offers a matchmaking service, helping pair social media influencers with brands and merchants looking to market their products. Its initial focus is Europe, where Russia, France, Spain and Poland comprise the majority of users.Alibaba hopes to replicate the success it’s enjoyed with so-called key opinion leaders driving sales on its China online marketplace Taobao. “For both Taobao and AliExpress, social content is a way to diversify offerings, but not to generate revenue,” Yuan Yuan, head of operations for AliExpress, told Bloomberg News. Influencers will help users stick with the platform instead of just making a one-time purchase. “The goal is to accumulate users, keep them there and encourage them to remain active.”China’s largest e-commerce company currently gets just a fraction of its retail revenue from outside its home country, but it’s harbored bigger international ambitions for years. The move marks Alibaba’s latest global push and comes at a time when Covid-19 is fueling an unprecedented boom in social media. The company’s rivals, including TikTok proprietor ByteDance Ltd. and Tencent-backed Pinduoduo Inc., are playing catch-up in live streaming and other means of social commerce championed by the Taobao Live app.Global social giants like Facebook Inc. have also added new features that support online shopping. In the U.S., more than 75 million social-network users aged 14 or older are expected to make at least one online purchase this year, up over 17% from 2019, according to research firm eMarketer.Influencers and content creators can sign up for Connect using TikTok, Instagram, Facebook and other social accounts. They can then solicit assignments from AliExpress merchants seeking help in promoting their goods or services. This gives the influencer options, from merely reposting the seller’s social media posts to creating original videos. Commission fees can be based on the sales the influencers generate.AliExpress is one of two Alibaba online bazaars for international buyers, the other being the Southeast-Asia-focused Lazada. AliExpress merchants are mainly small, export-oriented businesses in China, but global brands like Samsung and Oral-B have increasingly set up shop on the platform, targeting regional markets. Its top consumer markets include Russia, the U.S., Brazil and Spain.Yuan said AliExpress aims to help at least 100 of its army of a million influencers earn an annual income of more than $1 million within three years. “Only if they can make money will they be motivated to create good content for our platform,” she said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Pinduoduo's (NASDAQ: PDD) stock recently surged to an all-time high after the company posted its first-quarter earnings. The Chinese e-commerce company's revenue rose 44% annually to 6.54 billion yuan ($924 million), beating estimates by $189 million but marking its slowest growth rate since its IPO.
Investors in Pinduoduo Inc. (NASDAQ:PDD) had a good week, as its shares rose 8.9% to close at US$68.70 following the...
Last week was a terrible one for Chinese tech stocks, as the U.S. Senate passed the Holding Foreign Companies Accountable Act (HFCA). If passed by the House of Representatives and then signed into law, the new act could mean Chinese stocks will be delisted from U.S. exchanges, should companies choose not to adhere to the law’s new requirements. The new rules would include certifying that the company is not controlled by a foreign government and would also allow an American audit firm to certify any listed company’s financials.
(Bloomberg) -- Alibaba Group Holding Ltd. slid after projecting revenue growth will slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.Its stock slid as much as 4% in Hong Kong Monday, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s most valuable corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing. JD.com Inc., the No. 2 Chinese online retailer, forecast better-than-expected revenue this quarter.“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote. “We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”Read more: Alibaba Sales Growth Plumbs New Lows While Uncertainty EscalatesAlibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Friday Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.What Bloomberg Intelligence SaysUser engagement and transaction volume have rebounded in April and May to precrisis levels, which bodes well for normalized sales growth ahead, especially as merchant-support measures are gradually rolled back.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter but ahead of expectations. Its sales and marketing expenses jumped 49%. PDD’s shares climbed 15% Friday.Alibaba’s March-quarter net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy the bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Five years ago, Baidu Inc. founder and Chairman Robin Li sat down with Bloomberg News to explain how foreign investors were getting it wrong.Listed on the Nasdaq a decade earlier, shares of the Chinese search-engine provider had taken a beating over the prior year, and Li’s chief complaint was that Americans just didn’t appreciate the coming changes in its business. The trend in China was toward services like delivery and ride-hailing, as well as bookings for restaurants, beauty salons and doctors. This online-to-offline economy would eclipse search revenue, he predicted.Now, it seems that Li has lost patience. Baidu is looking into the possibility of delisting its shares from the Nasdaq and moving to an exchange closer to home, Reuters reported Friday, citing three people familiar with the matter. Baidu thinks it’s undervalued, according to the report.The backdrop to these discussions is rising hostility to U.S. investments in Chinese assets amid worsening relations between the two countries. The U.S. Senate passed a bill last week that would force companies to delist unless they can prove they’re not under the control of a foreign government.That sounds like a good excuse for Baidu to look for the exit. The reality is that investors lost patience with its management years ago. It was inevitable that the company would seek one day to list elsewhere, as Alibaba Group Holding Ltd. has already done. Baidu’s U.S.-traded stock fell 15% between that September 2015 interview and the end of last year, before the pandemic hit. Over the same period, Alibaba climbed 248%.Li’s problem is that his company failed to grasp the transformation he was talking up half a decade ago. While Alibaba and Tencent Holdings Ltd. have successfully moved into new areas like payments and physical retail, and upstarts like Meituan Dianping and Pinduoduo Inc. now dominate delivery and social-commerce, Baidu has barely changed.Its core business still centers on advertising and accounts for 73% of revenue, which climbed just 2% last year. Investments into new realms like artificial intelligence and autonomous driving have yet to bear fruit. Its other major sales contributor, iQiyi Inc., a video-streaming platform that listed separately on Nasdaq in March 2018, continues to lose money.Around the time that Li complained foreign investors weren’t getting it, some of his contemporaries decided to move home where they felt Chinese investors had a better understanding and would reward them with higher valuations. Internet security company Qihoo 360 Technology Co. was taken private by a consortium that included Citic Group for $9.3 billion in December 2015. It relisted in Shanghai in 2018 via the purchase of elevator maker SJEC Corp., and now trades under the name 360 Security Technology Inc. Chinese investors have soured on 360 Security, pushing the company’s market value down by more than a third since February. There’s a warning for Li. Investors in China won’t assign a higher valuation to a returning company unless it has a convincing growth story to tell. Baidu was a pioneer when it listed on Nasdaq in 2005, paving the way for dozens of Chinese internet stocks to follow. Touted as the Google of China, it symbolized the potential of the sector for American investors. Those days are long gone: Baidu has been eclipsed as China’s technology darling by fasting-growing companies such as Alibaba and Tencent.The problem for Li isn’t that investors don’t understand his business. It may be that they understand it too well. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of Chinese e-commerce giant Pinduoduo (NASDAQ: PDD) headed higher on Friday after the company reported unaudited results for the first quarter of 2020. Investors are celebrating Pinduoduo's across-the-board growth, despite the quarter running through the worst of the COVID-19 outbreak in China. By contrast, the outbreak started much earlier in China, affecting much of Pinduoduo's Q1.
On today's call, our CEO, Colin Huang, will make some general remarks on our performance for the first quarter of 2020, on the COVID-19 implication on our industry, our business and our team. Before we begin, I'd like to remind you that this conference contains forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended and as defined in the US Private Securities Litigation Reform Act of 1995.
(Bloomberg) -- Alibaba Group Holding Ltd. expects revenue growth to slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record. Alibaba’s shares slid more than 5% in New York.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s largest corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing.Alibaba has lost more than $40 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter, although that still beat expectations. Its sales and marketing expenses jumped 49%.Alibaba’s net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com Inc.’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy its bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”What Bloomberg Intelligence SaysThe company’s businesses most impacted by merchant and logistic disruptions are also its most lucrative, such as retail marketplaces Taobao and Tmall, while faster-growing segments like cloud computing and digital entertainment don’t contribute to profit. Subsidies for users and merchants will add to costs. Alibaba may provide an improved growth outlook for the June quarter given the retreat of the pandemic in China, but the recovery could be gradual as consumption sentiment remains weak.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
SHANGHAI, China, May 22, 2020 -- Pinduoduo Inc. ("Pinduoduo" or the "Company") (NASDAQ: PDD), an innovative and fast growing technology platform and one of the leading Chinese.
(Bloomberg Opinion) -- Just like the tens of millions of migrant workers stranded by China’s coronavirus lockdowns, hundreds of mainland companies listed in the U.S. are stuck, unable to go home and without a future in their adopted land. They make perfect prey for short sellers.The climate in the U.S. is getting uncomfortable for China Inc. President Donald Trump has renewed his trade-war rhetoric while pointing fingers at Beijing for the Covid-19 outbreak. On Monday, his administration asked a government pension fund to block investment in Chinese stocks. Meanwhile, the spectacular admission that Luckin Coffee Inc., the upstart rival to Starbucks Corp., faked its sales figures has ripped open age-old doubts about accounting standards.Unfortunately, even if these businesses wanted to prove they’re fraud-free, Beijing’s new securities law forbids cooperation with U.S. regulators.Unlike most other nations, China doesn’t allow the Public Company Accounting Oversight Board — an auditor of auditors, set up after the Enron scandal — to inspect the work papers of its U.S.-listed companies. The Securities and Exchange Commission has issued warnings about the quality of these reviews, even when the industry’s biggest names are signing the annual reports (as was the case with Luckin). SEC Chairman Jay Clayton singled China out in a public statement late last month.The SEC has good reason to be annoyed, as Beijing’s tough stance has only hardened with a new law that took effect in March. Item 177 states that overseas regulators can’t directly inspect or collect evidence on Chinese soil. In addition, domestic companies aren’t allowed to provide any relevant supporting documents without permission. As a result, the cloud of suspicion over these businesses will only grow darker. Even the most well-meaning among them won’t be able to prove otherwise.Going home was always the grand slogan whenever China Inc. felt mistreated or undervalued abroad. The nation’s stock frenzy in the first half of 2015 saw a wave of take-private deals, to the tune of $24 billion, as companies trading in New York rushed to go public in Shanghai or Shenzhen. The timing seems ripe again, especially now that mainland exchanges and Hong Kong both allow secondary listings.But there’s a new problem: China doesn’t want these companies back. Its bourses’ secondary listing requirements rule out most small caps. Hong Kong, for instance, demands that companies need to already have a market cap over $5.2 billion, or barring that, $129 million in annual sales and a market cap of at least $1.3 billion.As for China, secondary listing rules released last month are intriguing. Beijing relented on its obsession with blue chips — the required market cap was lowered to $2.8 billion from $28 billion. There’s a catch, though. Smaller companies must have “independent research,” “world-leading technology” and an “edge” in their field. In other words, don’t bother if you’re sub-scale. The likes of e-commerce retailer Vipshop Holdings Ltd., online dating app Momo Inc. or after-school education provider New Oriental Education & Technology Group Inc. can stay put. What China wants is hard tech that spends millions on research and specializes in semiconductors and artificial intelligence.Alibaba Group Holding Ltd. has become the face of China for retail investors in New York, while e-commerce operator Pinduoduo Inc. and social video site Bilibili Inc. have become hedge fund playthings. Yet hundreds of more obscure names list in the U.S. Of the 335 stocks, only 27 have a market cap of more than $2.8 billion, data compiled by Bloomberg show, and most would still need to pass Beijing’s “edge” test. As for Hong Kong, less than 40 stocks are eligible for a dual listing.Will Beijing allow hundreds of its companies stranded overseas to languish? You bet. If you can’t make it in New York, Shanghai isn’t for you either, the thinking goes. As China looks to build its FANG equivalent — the big names that give the U.S. tech supremacy — more obscure mainland rivals will be forgotten. Except, of course, by short sellers.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.