5 Rebounding Chinese Stocks to Buy Now

2. Pinduoduo Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 41

Share Price Gain in the Last Month as of August 30: 36.75%

Pinduoduo Inc. (NASDAQ:PDD) is a Shanghai-based company that operates an e-commerce platform in China, selling apparel and accessories, mother and baby products, food and beverages, electronic appliances, furniture and household goods, sports and fitness items, and auto accessories. On August 29, Pinduoduo Inc. (NASDAQ:PDD) stock soared 14% on the back of solid Q2 results. The company earned about 93 cents per share on a revenue of $4.7 billion in the second quarter of 2022. Pinduoduo Inc. (NASDAQ:PDD) stock has surged about 37% in the last month as of August 30. 

BofA analyst Joyce Ju on August 30 raised the price target on Pinduoduo Inc. (NASDAQ:PDD) to $89 from $77 and reiterated a Buy rating on the shares. The company posted “robust” Q2 results with primary marketplace revenue growth climbing to 49% year-over-year, the analyst told investors in a research note. The analyst lifted estimates to factor in rapid growth, greater monetization, and higher leverage.

According to Insider Monkey’s data, 41 hedge funds were bullish on Pinduoduo Inc. (NASDAQ:PDD) at the end of June, up from 36 funds in the preceding quarter. Rajiv Jain’s GQG Partners is the leading stakeholder of the company, with 6.15 million shares worth about $381 million. 

Here is what Tao Value has to say about Pinduoduo Inc. (NASDAQ:PDD) in its Q4 2021 investor letter:

“On the detracting side, one of our largest detractors includes Pinduoduo (ticker: PDD). Pinduoduo (PDD) reported the second consecutive GAAP profit quarter yet missed on the revenue due to nation-wide consumption weakness & scaled back Sales & Marketing efforts. Market disliked it and the stock price plunged on the earnings. In my opinion, the accounting profits proved the original thesis of using S&M to acquire users and using great shopping experience to keep them. After realizing the first growth curve, Pinduoduo now shifted its focus & investment to agriculture. It is still very early, but the reduced size due to price drop warrants a position to watch and continue to grow with such a team with a strong culture.”