Pinduoduo Pops While Canaan Drops

Pinduoduo, now known as PDD Holdings, is rebounding from nearly seven-month lows following better-than-expected results. 👍

The company’s adjusted earnings per American depository share (ADS) of RMB6.92 was well above the RMB4.46 expected. Its gross margin also improved from 69.9% to 70.4%.

Meanwhile, revenues grew 58.1% YOY to RMB37.64 billion, topping the consensus view of RMB32.18 billion. That’s broken down into online marketing services of RMB27.24 billion (+50% YoY) and transaction services of RMB5.59 billion (+86% YoY). 💰

Executives say their cost-cutting efforts and operational prioritization have been paying dividends. Additionally, recovery trends among consumers continue to improve, with online retail picking up steam and users showing a higher willingness to shop. Overall, these early trends should lay a “solid foundation” for steady consumption growth throughout the year. 🛒

To position itself to benefit from this improvement, it’s investing heavily in promoting ecosystem vibrancy and sustainability. Its dedicated ’10 Billion Ecosystem Initiative’ is designed to facilitate an environment where quality merchants can flourish. In addition, improving cash flows and operating profitability should also extend the company’s runway for investing in its growth goals.

Despite today’s 19% rally, $PDD shares are roughly 65% off their 2021 highs. Nonetheless, investors seem hopeful that the company’s efforts will continue to push the stock in the right direction. 🔺

While discussing Chinese stocks, it’s worth mentioning Canaan Inc. The China-based computer hardware manufacturer is plunging after reporting weak results. 😮

The computing solutions provider reported an adjusted net loss of $3.37 per share. Last year it reported a $2.52 per share profit. Revenues also dropped from $201.8 million to $55.2 million, missing the consensus view of $62.4 million.

Executives blamed an industry-wide reduction in selling prices. They also noted unforeseen delays in payments and shipments following U.S. regional bank failures. However, investors remain skeptical of that reasoning given the company’s many quarters of underperformance. They want fewer excuses and more results. 😑

$CAN shares were down another 27% today, approaching their all-time lows.

More in   Earnings

View All

Sellers Unleash On Unity

Video game software developer Unity probably wishes it could reload its last saved checkpoint after reporting another quarter of lackluster earnings. 👾

Although revenues of $609 million topped expectations of $451 million, management noted revenue would have been $510 million if its deferred revenues were not released. Meanwhile, the company’s net loss of $0.66 was narrower than last year’s $0.82 but still much higher than analysts’ $0.46 per share expectation. 🔺

Read It

Advertisers Remain Un-Pinterested

Although mega-cap technology giants like Meta, Alphabet, and Amazon are having no trouble in the advertising market, smaller players like Snap are. That trend continued today, with Pinterest missing revenue estimates. Let’s take a look at the numbers. 👇

The social media company’s adjusted earnings per share of $0.53 topped the expected $0.51. However, revenues of $981 million were $10 million shy of estimates despite rising 12% YoY.

Read It

Plug Power Recharges Amid Market Rally

It was another day of records for the U.S. stock market as more and more stocks got snatched up in the bullish animal spirits. Let’s continue this week’s trend of pointing out the ragingly bullish action traders have been dealing with. 👇

Below is a chart of the S&P 500 showing prices rising for 16 of the last 18 months, posting a 25% rally since the end of October. It was also announced after the bell that Super Micro Computer and Deckers Outdoor will join the index, replacing Whirpool and Zions Bancorp. 📈

Read It

Buyers Move Beyond Tech

Animal spirits have been a big theme of this newsletter since October, and boy, are things getting wild. While the mainstream media continues focusing on tech giants like Nvidia, investors and traders are searching far and wide for new opportunities to squeeze the shorts and make a killing. 🕵️‍♂️

Today’s surefire sign of this speculative fervor building in the market is everyone’s favorite non-meat meat stock, Beyond Meat. 🫨

Read It