PDD Holdings Inc. (PDD): A Bull Case Theory

We came across a bullish thesis on PDD Holdings Inc. on Bullseye Research’s Substack by Bullseye Investing. In this article, we will summarize the bulls’ thesis on PDD. PDD Holdings Inc.’s share was trading at $103.45 as of February 2nd. PDD’s trailing and forward P/E were 10.36 and 8.17 respectively according to Yahoo Finance.

PDD Holdings Inc., a multinational commerce group that owns and operates a portfolio of businesses. PDD represents a potential value investment opportunity as it trades below its perceived fair value, largely due to the persistent “China discount” that weighs on Chinese equities because of regulatory and geopolitical risks.

The company owns Temu, a fast-growing e-commerce platform, which has contributed to its strong revenue performance. PDD’s revenues grew 54% in FY2024 and continue to expand at a solid 9% year-over-year pace, demonstrating both resilience and scale in its core operations.

The stock trades at an attractive valuation of roughly 9x earnings, offering investors a compelling entry point relative to its growth profile. Financially, PDD is highly efficient, with a return on equity of 30.5% and profit margins of 24%, highlighting its ability to generate significant shareholder value despite the macro and regulatory headwinds it faces.

While the Temu business introduces regulatory and operational risks, particularly given ongoing scrutiny of Chinese tech firms and potential economic disruptions in the supply chain, these risks are already reflected in the market’s discount, creating a potential upside if regulatory pressures ease or growth continues to outperform expectations.

For investors willing to navigate the geopolitical and regulatory uncertainties, PDD presents a rare combination of strong profitability, robust growth, and compelling valuation. Even with the acknowledged risks, the stock’s fundamentals suggest that it is undervalued relative to its earnings potential, making it a strategic target for value-oriented investors seeking exposure to China’s e-commerce sector with a significant margin of safety.

Previously, we covered a bullish thesis on PDD Holdings Inc. (PDD) by LongYield in May 2025, which highlighted strong revenue growth, strategic reinvestment, and long-term expansion through Temu. PDD’s stock price has appreciated by approximately 5.7% since our coverage due to robust top-line performance. Bullseye Investing shares a similar perspective but emphasizes the “China discount,” regulatory risks, and undervaluation.

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Disclosure: None.