Key Takeaways
- PDD Holdings rose 3.9% on Monday, Nov. 2, with Alibaba and JD.com as Beijing moved to support China’s stock market, and Apple’s China AI news also lifted Alibaba.
- The rally came from Beijing, but PDD’s low valuation is the more lasting story.
- Analysts expect PDD’s earnings to grow again in 2027, yet the stock trades near its lowest forward P/E in five years.
PDD Holdings (PDD) rose 3.9% on Monday, Nov. 2, as Beijing moved to prop up China’s stock market, lifting Alibaba (BABA) 3.5% and JD.com (JD) too. Alibaba had a second reason to rally: it and Apple (AAPL) said Saturday, Oct. 31, that Apple Intelligence will launch for iPhone users in China in December, built on Alibaba’s Qwen model.
Beijing opens the taps
China’s central bank said Monday it will bring more firms into its swap facility for brokers, funds and insurers. It set a one-year swap operation for Tuesday, Nov. 3, after 31 brokerages and fund companies applied for more than 100 billion yuan (about $15 billion).
That’s cash for the firms that buy Chinese stocks, so the group moved together: JD.com gained 2.4%.
JD’s own numbers are mixed: second-quarter revenue fell 2.9% from a year earlier, but operating income swung to RMB4.5 billion from a loss. Its report in mid-November will show whether sales are growing again.
Apple’s report after Monday’s close shows what the launch has to build on. Greater China revenue rose 21% to $17.54 billion in the September quarter but fell short of Wall Street’s estimates. The Qwen-powered rollout lands in December, inside Apple’s holiday quarter.
The price is the better story
Analysts expect PDD’s normalized earnings per share to dip this year and climb again in 2027 and 2028:
A swap facility for Chinese brokers doesn’t sell more ads on Pinduoduo, so Monday’s news shouldn’t move those estimates.
Investors are barely paying for that recovery. At the close on Friday, Oct. 30, PDD traded at 6.9x forward earnings, just above its five-year low of 6.6x on Oct. 2:
Monday’s gain only took it to about 7x, against a three-year average of about 12x.
It’s cheap for a reason, though. PDD held RMB456.4 billion of cash and short-term investments at June 30, yet it has never paid a dividend and hasn’t bought back stock in recent years. And online marketing, about half its revenue, grew just 3.5% in the second quarter.
TIKR tracks 35 analysts on PDD Holdings. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on PDD Holdings, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See PDD Holdings’ Analyst Ratings
Beijing can’t fix the ad business
Monday’s bounce came from Beijing, and it can fade just as fast. But at about 7x earnings, with growth expected back in 2027, PDD doesn’t need much to go right. Faster ad growth in its third-quarter report, expected in mid-November, would do it.
Of course, that’s also the first full quarter under the EU’s €3 duty on cheap parcels, so Temu could still drag.
So what is PDD Holdings stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what PDD Holdings could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
