Shares of Pinduoduo (NASDAQ:PDD) are soaring higher by over 18% after the Chinese e-commerce company reported its third-quarter earnings. During the quarter, revenue tallied in at 68.84 billion yuan, up by 94% year-over-year (YOY) and beating the analyst estimate of 55.2 billion yuan. Pinduoduo’s quarterly revenue translates to $9.7 billion. Of the revenue, transaction services accounted for $3.99 billion, up by an impressive 315% YOY.
Furthermore, the company was profitable, reporting an EPS of 11.61 yuan, or $1.64, which beat the analyst estimate of 8.95 yuan or $1.25. Net income attributable to ordinary shareholders was $2.12 billion, up by 47%.
“We are dedicated to generating value through innovations, which forms the foundation of our high-quality development,” said Chairman and co-CEO Lei Chen. “We continued to invest decisively in areas such as agritech, supply chain technology, and core R&D capabilities.”
The significant surge in revenue came at a cost, as sales and marketing expenses increased by 55% to $2.98 billion. This increase was due to accelerated spending on promotions and advertisements. Total operating expenses grew by 44% to $3.47 billion, which can be seen as a positive because sales growth outpaced operating expenses growth by a wide margin.
5 Investors Betting Big on PDD Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q3, 453 13F filers disclosed a stake in PDD stock compared to 437 filers during Q2. These filers own 393.21 million shares, up by a healthy 18.7% from the prior quarter. It’s safe to say that institutional investors were busy snatching up shares during the third quarter.
On top of that, 71 filers own PDD in their top 10 positions, up from 55 filers. This statistic conveys heavy conviction in the company.
With that in mind, let’s take a look at Pinduoduo’s largest shareholders:
- Sequoia Capital: 48.23 million shares. Sequoia acquired 45.04 million shares during Q3.
- Baillie Gifford: 35.66 million shares. Baillie acquired 4.5 million shares during Q3.
- BlackRock (NYSE:BLK): 27.87 million shares. BlackRock acquired 3.73 million shares during Q3.
- Vanguard: 24.10 million shares. Vanguard acquired 6.63 million shares during Q3.
- FMR: 17.63 million shares. FMR acquired 4.33 million shares during Q3.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
