After Pinduoduo released its explosive third quarter report, its stock price surged and its market value approached that of Alibaba. Subsequently, Jack Ma made a rare sound
Pinduoduo recently released its latest financial report, with performance data and subsequent stock price performance not only attracting market attention, but also causing Alibaba employees to post laments on the internal network.
On November 29th, Jack Ma participated in a rare discussion and spoke on Alibaba's intranet, saying, "Please provide more constructive opinions and suggestions, especially innovative ideas."
Jack Ma said, "I believe everyone at Alibaba is watching and listening today. I am even more convinced that Alibaba will change. All great companies are born in winter. The era of AI e-commerce has just begun, and it is both an opportunity and a challenge for everyone."
Pinduoduo's performance skyrocketed
On the evening of November 28th, Pinduoduo released its 2023 third quarter report: achieving a revenue of RMB 68.84 billion (the same below), an increase of 93.89% compared to the same period last year; Under the US GAAP, the net profit attributable to the parent company increased by 46.73% year-on-year to 15.54 billion yuan, with a net profit margin of 22.57%.
Specifically, Pinduoduo's revenue from online marketing services and other services in the third quarter was 39.687 billion yuan, a year-on-year increase of 39%, while its revenue from transaction services was 29.152 billion yuan, a year-on-year increase of 315%.
Along with a significant increase in revenue, Pinduoduo's total revenue cost for the quarter was 26.830.2 billion yuan, a year-on-year increase of 262%. The company explained that the growth mainly comes from the increase in fulfillment fees, payment processing fees, maintenance costs, and call center fees. The total operating expenses were 25.3541 billion yuan, a year-on-year increase of 44%; Sales and marketing expenses amounted to 21.7485 billion yuan, a year-on-year increase of 55%, mainly due to an increase in promotional and advertising expenses. In addition, the company's research and development expenses reached a new high, reaching 2.85 billion yuan, a year-on-year increase of 5.5%.
As of September 30, 2023, Pinduoduo's cash, cash equivalents, and short-term investments amounted to RMB 202.8 billion (approximately USD 27.8 billion), compared to RMB 149.4 billion as of December 31, 2022.
Jack Ma expressed congratulations on Pinduoduo's decisions, implementation, and efforts over the past few years. "Everyone has done well, but only those who can reform for tomorrow's Tianniu and are willing to pay any price or sacrifice are respected. Returning to our mission and vision, Ali people, come on!"
Can e-commerce's "C position" change ownership
After the financial report was released, the stock price of Pinduoduo (PDD) surged 18% at the opening.
As of the close of November 28th Eastern Time, Pinduoduo reported $139, an increase of 18.08%, and its market value rose to $184.67 billion. Alibaba's US stock market closed down 1.02%, with a market value of 195.44 billion US dollars. In addition, the US stock market of JD.com fell 0.64%, with a market value of 44.31 billion US dollars.
Undoubtedly, Pinduoduo's performance leads the Chinese concept stocks. By contrast, the current market value is equivalent to four JD.com, and the gap with Alibaba has narrowed to billions of dollars.
As the growth rate of e-commerce slows down, consumer purchasing enthusiasm decreases, and competition in the e-commerce industry intensifies, both Alibaba and JD.com are returning to low prices. However, upgrading from the original consumption to the current "billions of subsidies", it is not easy for giants to turn around.
According to financial report data, JD Group's revenue in the third quarter was 247.7 billion yuan, an increase of 1.7% year-on-year, and operating profit increased by 6.6% year-on-year to 9.3 billion yuan. The net profit attributable to common shareholders of the company was 7.9 billion yuan, compared to 6 billion yuan in the same period last year.
In 2023, JD.com continued to promote its low price strategy, but JD Retail, which accounted for the largest proportion of revenue, had a revenue of 212.06 billion yuan in the third quarter, almost equal to the growth of 211.92 billion yuan in the same period last year. Commodity revenue decreased by 0.9% year-on-year, with the growth rate of electronic products and household appliances stagnant, and the revenue of daily necessities decreased by 2.3% year-on-year. At the same time as the financial report was released, JD.com announced that the CEO of the group, Xu Ran, will also serve as the CEO of JD.com Retail, and the former CEO of JD.com Retail, Xin Lijun, will have another position in the company.
The performance announcement for the second quarter of fiscal year 2024 (i.e. the three months ending September 30, 2023) released by Alibaba Group on November 16 shows that the revenue for the quarter was 224.79 billion yuan, a year-on-year increase of 9%; The operating profit was 33.584 billion yuan, a year-on-year increase of 34%; Adjusted EBITDA of RMB 49.24 billion, a year-on-year increase of 14%; The adjusted net profit was 40.19 billion yuan, a year-on-year increase of 19%.
Although there has been some growth in performance, due to obstacles in the markets of Alibaba Cloud and Hema, as well as the impact of Jack Ma's reduction in holdings, Alibaba's US and Hong Kong stocks plummeted after the financial report was released.
Regarding this, Jiang Fang, a partner and chief talent officer of Alibaba Group, recently posted on the internal website that the hype surrounding Jack Ma's massive stock sales shows a lack of confidence in Alibaba's business, completely disregarding the fact that this is a long-term plan and that he believes Alibaba's business will further improve, and has set a higher selling price. Alibaba's stock is currently significantly lower than its actual value, and he will not sell it.