PDD: Undervalued but Little Problem

OguzO Capitalist
03-21

1.

$PDD Holdings Inc(PDD)$ I don't own, it's still criminally undervalued but there are problems.. 🚨

Slower top-line growth is because of a lower take rate, which is a result of competitive pressures.

It doesn't have a tech ecosystem like $Alibaba(BABA)$ $Amazon.com(AMZN)$ or $MercadoLibre(MELI)$ . In this form, all strategy depends on being the cheapest. Conversely, other providers, like BABA, has all the same means to compete them at price, they had just lagged execution. Now they are coming back.

Overall, there is no doubt it's undervalued, but the question is "why should the market catch up with the fundamentals rather than waiting for fundamentals to decay and catch up with the market?"

Are they investing in tech? Are they in finance?

It has to diversify the revenue channels if it wants to get a multiple expansion.

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2.

Short idea: BofA Securities…

Looks like their research division is broken.

$18 price target on $Hims & Hers Health Inc.(HIMS)$ , underperform rating on $SoFi Technologies Inc.(SOFI)$ and now they are calling for correction in China while their quality companies still trade at high single digit forward multiples.

Yeah sure…

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