China-based e-commerce firm Pinduoduo (NASDAQ:PDD) is where many shoppers look for good deals online. Is PDD stock still a good deal after posting gains in 2022? The answer is yes, as Pinduoduo beat the odds and delivered outstanding financial results, demonstrating resiliency even while China’s government wasn’t always business-friendly.
Pinduoduo isn’t just a run-of-the-mill e-commerce platform. Sure, it offers apparel, electronics, cosmetics, fitness items, auto accessories and other products at low prices. However, Pinduoduo is also known as an online marketplace where shoppers can purchase fresh produce.
If you’re hesitant to delve into international investments, feel free to investigate Pinduoduo. You’ll surely be impressed with the company’s ability to deliver strong fiscal results. Besides, an easing of China’s restrictive policies against technology businesses like Pinduoduo could greatly benefit the company and its shareholders.
| PDD | Pinduoduo | $104.68 |
What’s Happening with PDD Stock?
Last year, PDD stock rallied from $56 to more than $80. In early 2023, the Pinduoduo share price broke above $90 and even threatened to reach $100. Clearly, the overall trajectory is to the upside.
This discredits the idea that you can’t make international investments because they’re too risky. Granted, China’s government didn’t always make it easy for technology companies to conduct business in 2022.
In some instances, the Cyberspace Administration of China and the People’s Bank of China (PBoC) would crack down on tech companies due to cybersecurity and antitrust concerns.
However, China’s government may be more business-friendly this year. Guo Shuqing, the Communist Party leader at the PBoC, reportedly stated that the “crackdown on fintech operations of more than a dozen internet companies is ‘basically’ over.”
Shuqing also assured, “[W]e’ll promote healthy development of internet platforms.” Additionally, he said, “We’ll encourage them to come out strong in leading economic growth, creating more jobs, and competing globally.”
Pinduoduo Demonstrated Huge Income Growth
Shuqing might not have mentioned Pinduoduo by name. Still, an easing of China’s clampdown on tech companies should certainly help Pinduoduo. Besides, the company managed to demonstrate impressive resilience even in 2022, when China’s government was engaged in tech-company crackdowns.
In the third quarter of 2022, Pinduoduo grew its revenue 65% year-over-year. That’s outstanding, but it gets even better. During the same time frame, Pinduoduo increased its operating profit by 388% and its net income attributable to ordinary shareholders by a jaw-dropping 546%.
Without a doubt, analysts with Citi had these fiscal figures in mind when they maintained their “buy” rating on Pinduoduo. The analysts also raised their price target on the shares by 40%, from $79 to $111.
What You Can Do Now
By now, you should be convinced that international investing, when focused on the right companies, can be quite rewarding. Sure, China’s regulators made it difficult to conduct business sometimes. Yet, Pinduoduo overcame the challenges and delivered outstanding financial results.
Pinduoduo should continue to perform well, especially if China’s government relaxes some of its policies against tech businesses. You’re invited, therefore, to consider a position in PDD stock as a high-conviction e-commerce pick for 2023.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.