3. Pinduoduo Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 49
Pinduoduo Inc. (NASDAQ:PDD) runs an ecommerce platform in China, offering apparel, accessories, food and beverage, fresh produce, electronic appliances, household goods, and other personal care items. Pinduoduo Inc. (NASDAQ:PDD) operates via a mobile application. Owing to regulatory concerns in China, Pinduoduo Inc. (NASDAQ:PDD) shares dipped roughly 70% in the last 12 months.
Although the performance of Pinduoduo Inc. (NASDAQ:PDD) has been impacted by China tightening its regulations on tech, Cathie Wood, founder of ARK Investment Management, is bullish on the stock heading into 2022, stating that she is buying Chinese tech that caters to multiple cities and primarily runs logistics services. She believes that China is here to stay for the long run, and the oversight on tech will settle since the government cannot risk total market collapse. As of Q4 2021, Wood’s fund holds 511,509 Pinduoduo Inc. (NASDAQ:PDD) shares, worth approximately $30 million.
On January 14, DBS Bank upgraded Pinduoduo Inc. (NASDAQ:PDD) to Buy from Hold with a $96 price target.
In the third quarter of 2021, 49 hedge funds were bullish on Pinduoduo Inc. (NASDAQ:PDD), with stakes equaling $3.5 billion. Tiger Global Management, a $52 billion Wall Street fund run by Chase Coleman, was the largest stakeholder of the company, with over 14 million shares worth $1.27 billion.
Here is what Baillie Gifford has to say about Pinduoduo Inc. (NASDAQ:PDD) in its Q2 2021 investor letter:
“As many countries enjoy a relaxation of Covid restrictions, Mr Market is focussed on short-term beneficiaries of ‘the pleasure after the plague’. There are interesting parallels with the Roaring 20s here, but to our minds, they extend beyond post-pandemic hedonism. Much of the new wealth created in the 1920s was patchily distributed and accompanied by a pervasive sense that the older generation had let down younger people. In 1920, John F. Carter, an irate 23-year-old wrote “the older generation had certainly pretty well ruined this world before passing it on to us. We have been forced to live in an atmosphere of ‘tomorrow we die,’ and so, naturally, we drank and were merry.”
In a similar vein, some of the greatest Growth opportunities are materialising from the companies that are shifting humankind towards more sustainable ways of consuming by driving efficiencies and eliminating surplus. Pinduoduo’s ‘farm to table’ platform is one example – cutting out huge waste in farm produce and short circuiting layers of infrastructure by matching Chinese food supply and demand through a group buying model. In a similar vein, Meituan is well on the way to developing China’s primary ‘Software as a Service’ ecosystem for food distribution which we believe has a strong chance of replacing wasteful wet markets as the primary channel for transacting in produce.
Pinduoduo’s share price pulled back following news that Chinese regulators are investigating possible anti-competitive activities by the country’s large online companies. However, Pinduoduo appears well placed to navigate such regulatory scrutiny in the long-term, helped in part by its community buying business model that benefits consumers, manufacturers and farmers alike. Its business fundamentals are stellar– the company remains the largest Chinese e-commerce platform, with over 820 million annual active users (surpassing Alibaba and JD.com), while revenue growth increased by 239% over the previous year.”
