3. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders as of Q4: 85
Appaloosa Management’s Equity Stake: $519.49 Million
PDD Holdings Inc. (NASDAQ:PDD), the parent company of Pinduoduo and Temu, delivered a mixed yet robust set of results for the fourth quarter of 2024. The company reported earnings per share of RMB 20.15, topping the consensus estimate of RMB 19.84, but revenue of RMB 110.6 billion fell short of the expected RMB 115.15 billion, prompting a 3.44% decline in premarket trading. Management emphasized that this shortfall reflects its deliberate prioritization of long‑term growth over short‑term financial targets. To that end, PDD continues to deepen its merchant ecosystem by expanding logistics support in remote regions, investing in supply‑chain infrastructure, and raising product quality standards to bolster customer satisfaction and retention.
For the full year 2024, PDD Holdings Inc. (NASDAQ:PDD) posted remarkable top‑line growth, with revenue climbing 59% year‑over‑year to RMB 393.8 billion. The company achieved a 24.06% gross profit margin and ended the year with cash and equivalents of RMB 331.6 billion, underscoring its strong balance sheet. Fourth‐quarter operating profit reached RMB 28 billion, maintaining a 24% margin, and full‐year non‑GAAP net income was RMB 122.3 billion. These results reflect PDD’s ability to leverage scale, technology, and an increasingly diversified merchant base to drive sustainable profitability even as it invests aggressively in future growth initiatives.
As Appaloosa Management held a stake of over $519 million in PDD Holdings Inc. (NASDAQ:PDD), it stands third in Billionaire David Tepper’s top 10 stock picks.
Looking ahead, PDD Holdings Inc. (NASDAQ:PDD) aims to capitalize on its financial strength and expansive user base to accelerate international expansion, particularly through its Temu platform, while continuing to enhance service quality and logistics efficiency at home. The company plans to deploy advanced data analytics and AI tools to optimize inventory management and personalize the shopping experience, further differentiating its offerings in competitive markets. With a clear strategic focus on ecosystem development, merchant empowerment, and technological innovation, PDD Holdings is well-positioned to navigate the evolving global e‑commerce landscape and sustain its leadership in the years to come.
GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q4 2024 investor letter:
“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.
PDD Holdings founder Colin Huang is who inspired us to “run 3x faster,” as the relentless corporate culture of PDD has built an e-commerce company with roughly the same GMV (gross merchandise value) of Amazon in one-third the time it took Amazon to build itself. Shares reacted negatively when the company decided to reinvest its record margins into even faster growth and creating a healthier supplier ecosystem. As it looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple.
PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices. We would not want to compete with the demanding corporate culture of PDD and Temu. Its operating model is relentless at identifying efficiency throughout the manufacturing and selling supply chain. Not only is it a mor formidable competitor than Amazon, and growing much faster, but the valuation is 4x more attractive than Amazon’s…” (Click here to read the full text)
