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The company currently has a market capitalization of $173.9 billion (approximately 1.23 trillion RMB), with cash, cash equivalents, and short-term investments totaling around 320 billion RMB. The expected net profit for 2024 is 120-130 billion RMB.
(Domestic business profit: 140-150 billion RMB; overseas business loss estimated at around 20 billion RMB).
⚫ Pinduoduo's domestic GMV for 2024 is projected to be 4.5-5 trillion RMB. "Due to limited user growth, slow frequency increase, and sluggish average order value, GMV growth will quickly fall below 20%, stabilizing slightly above the online penetration growth rate of retail sales." Alibaba's GMV is about 7 trillion RMB, but Pinduoduo's order volume has already surpassed Alibaba (Taobao + Tmall), with the gap mainly due to average order value. JD.com's GMV is about 3.6 trillion RMB, while Douyin E-commerce's GMV is around 3.5 trillion RMB. Currently, only Douyin E-commerce and Pinduoduo maintain relatively high growth rates, while Alibaba and JD.com's e-commerce GMV have stabilized. As the ROI of subsidies declines rapidly, the fundamental business models of each company, shaped by their resource endowments and product forms, are becoming clearer.
⚫ In 2023, Pinduoduo's overall advertising monetization rate (ad revenue/GMV) was 3.5-3.6%. In 2024, it is expected to reach around 5%. Based on management guidance, the monetization rate is unlikely to increase significantly beyond this range.
II. Overseas
⚫ In 2023, GMV reached $17.5 billion, with projections of $50 billion in 2024 and $100 billion in 2025. Currently, Temu has surpassed Amazon as the most downloaded shopping app among overseas users.
⚫ Temu's business model is now operational, achieving front-end profitability in the U.S., with losses mainly stemming from marketing and customer acquisition investments. Data also shows excellent retention and repurchase rates.
⚫ Considering potential policy pressures from the U.S. and other countries (e.g., the likely adjustment or cancellation of the $800 policy), Temu's price advantage remains significant even under normal tariff conditions. However, the company's current market capitalization hardly factors in Temu.
Pricing and Risks:
⚫ The current market capitalization values the domestic business at 8-9x 2024 PE, with no pricing for overseas operations.
⚫ Beyond conventional business risks, the primary concerns are policy and political risks: It is highly likely that countries will introduce restrictive policies, though such risks can be mitigated through semi-hosted models and partnerships with local businesses. A more extreme scenario involves severe U.S.-China conflict leading to the demise of Chinese concept stocks.
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