Pinduoduo Outperforms Baidu in Market Value
Shares in Pinduoduo Inc. (Nasdaq: PDD) have been riding up since the company posted strong earnings last Wednesday, enabling it to replace Baidu Inc. (Nasdaq: BIDU) in the top five most valuable internet companies in China.
The Shanghai-based discounter platform saw its stock hit its peak of $33.88 per American depositary share Thursday. Today, it settled to close at $32.77 per ADS. The market cap of Pinduoduo totaled $38.1 billion, slightly outweighing Baidu's $36 billion as of Friday.
The e-commerce company announced its gross merchandise volume has climbed to $103.3 billion in the year ended June, up 171 percent from a year ago, which drew growing interest from Wall Street investors.
Pinduoduo, which operates a platform similar to Groupon, said in the statement that its revenue reached $1.1 billion in the second quarter, representing an increase of 169 percent from a year ago. It reported narrowed loss of $146.1 million, or 12 cents per ADS, in the second quarter, which dropped 85 percent year-over-year.
A number of analysts noted Pinduoduo’s performance in the second quarter. Benchmark analyst Fawne Jiang raised the price target to $39 from $28 per share, maintaining a "buy" rating and citing the "substantial reacceleration of user growth" and strategies that could increase monetization in the future. Analyst Hans Chun in KeyBanc Capital Markets Inc. raised its price target from $32 to $40 per ADS.
Another e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA) ranked as the most valuable internet company in China with a market cap of $444.6 billion. Chinese tech giant Tencent Holdings Ltd. (HKEX: 0700) followed next with $392 billion market cap. The third- and fourth-largest internet companies in China were China's e-commerce giant JD.com Inc. (Nasdaq: JD) and Tencent-backed Meituan Dianping (HKEX: 3690), which provides services that include food delivery and ticket bookings.
Launched by the former Google engineer in 2015, Pinduoduo became a publicly traded company in July 2018, raising a massive $1.6 billion in its initial public offering with backing from investors including Tencent.