Analyzing PDD's Absurd Earnings Call and Indications for Chinese Stocks

Let's analyze one of the strangest earnings calls I've ever listened to and see what implications this has for other Chinese stocks.

I’m not invested in PDD 0.00%↑ , but I wrote a short article on them before and listened to the earnings call a few days ago. PDD was the high-flying Chinese stock. But after the earnings call, the stock plummeted 30%.

The results reported were great once again.

Seeing these numbers, one has to ask why the stock sold off 30% in response. Well, the answer is the earnings call. It might be one of the weirdest I’ve ever listened to.

So, before I wrote this article, I wanted to gather views from both American and Chinese sources. I generally try to do this when I analyze Chinese companies (or other international companies).

The bias and tension between the US and China are so great that media outlets and investors on both sides have massively biased views. So, the best option is to listen to both parties and then see what makes the most sense. Ideally, we find the most neutral sources on both sides.

The Earnings Call

Not only a minute into the call, instead of building on the strong results, there was the first and massive statement by co-CEO Lei Chen:

Saying that there are “many new challenges ahead” and implicating that revenue growth will not continue at these levels is clearly going to hurt the stock, but it could be just an honest statement.