Temu Parent’s Stock Skyrockets as Earnings Far Exceed Expectations

PDD Stock Surges After Strong Q4 Earnings Report

In early Wednesday trading, U.S.-listed PDD stock saw a significant jump following the release of fourth-quarter earnings by parent company PDD Holdings that surpassed expectations.

For the three months ending Dec. 31, PDD Holdings reported earnings of 15.83 Chinese yuan ($2.23) per share on sales of 88.88 billion yuan ($12.52 billion). This exceeded analyst estimates of $1.57 per share in earnings and $11.05 billion in sales, according to FactSet.

The adjusted earnings per share increased by 107% in local currency, while revenue increased by 123% in local currency.

PDD stock is currently up more than 16% at 148.98 in premarket trading.

PDD Holdings consists of the China-focused e-commerce platform Pinduoduo and the international discount retail platform Temu. While U.S.-listed PDD shares had a notable 80% surge in 2023, they have decreased by 12% since the beginning of this year.

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Expansion of Temu

Jiazhen Zhao, Co-Chief Executive of PDD Holdings, mentioned in a press release that the company experienced a surge in demand driven by positive consumer sentiment during the fourth quarter.

Pinduoduo, in China, has been challenging major players like Alibaba and JD.com by offering discounted items at a time when consumer spending has been sluggish. Both Alibaba and JD.com have recently shifted their focus to discounted sales.

Temu was launched across multiple countries in late 2022 and has quickly become a strong competitor to Amazon in the U.S. e-commerce market. The growth of Temu has been supported by strategic marketing efforts, including Super Bowl ads and heavy investment in platforms like Facebook and Instagram owned by Meta Platforms.

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For fiscal year 2023, PDD Holdings saw an overall revenue increase of 90% in local currency, reaching 247.64 billion yuan ($34.88 billion).

MarketSurge reports that PDD stock has formed a double-bottom base with a buy point of 139.06.

PDD is currently ranked as the second best-performing stock in the retail-internet group by IBD Stock Checkup, trailing only Amazon. With an IBD Composite rating of 98 out of 99, PDD stock is outperforming 98% of all other stocks based on key performance metrics and technical strength.

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Stay tuned for more updates on PDD stock and the latest market trends.

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