We are very nervous about Pdd Holdings releasing financial reports again, there are always big fluctuations, I haven't had time to look at the data yet - I know a 13% decline must be bad.
1. Financial Report Data
Organized the data, it is indeed poor, revenue 99.3544 billionyoy44.33%, the growth rate is significantly reduced, compared to the previous period, I see growth of over 2%..
Growth indicators are not the most important, the key is other operational data:
I highlight the most crucial part, with a gross margin to sales expense ratio of 29.35%, compared to Q2 where it was 38.44%. While the revenue growth rate is declining, the quality data at the end has dropped by 9 percentage points compared to the previous period, which is what I mean by poor margins.
Gross profit - sales - R&D - management (operating profit) 24.2925 billion, decreased by 8.2 billion compared to the previous period. Operating margin is 24.45%, also decreased by 9 percentage points compared to the previous period.
Of course, on a year-on-year basis, both indicators are exactly the same as in September 2023. Absolute growth, revenue 44%, operating profit year-on-year 45%.
The management team always says, "Our high profit margin is not sustainable, investment will intensify in the future", but after several times, the profit hits new highs, and this time it has indeed come true. Looking back, that drop in 2024 Q2 was not unjustified.
2. Valuation
Does this marginal difference negate it? Of course not. We divide investments into "information/margin/valuation". The essence of value investing is to see how much money can be earned in the long term in the future, comparing it with past and current prices. If it is felt that, with a high probability, the price is lower than the future net income...