On the point of why I found it sketchy - the biz model of PDD is to go by turnover because they sell things at dirt cheap prices. As of yet, they've basically been squeezing merchants and middle-man to provide such convenience to the end-consumer (ie Americans) - and they're eating it up like no one's business. The main premise of my suspicion is just the rate at which they've been growing and spending (and it's confirmed by companies like Meta) - where PDD is basically flooding ads and buying up tons of real-estate. Given the nature of their business and the expenses they've been incurring to scale and subsidies - I don't understand how does the math check out. I think like I shared in the video - PDD will go down in history, as one that was so well-managed with such efficient use of resource, or there might be something "interesting" going on.
So you feel that PDD’s excellent financial results are sketchy (even despite’s the temu story)?
Hey Mark, sorry for the late reply.
I think the Temu story was a miraculous one, where PDD managed to achieve something that the other Chinese behemoth failed at. A large part of how I came to understand and appreciate PDD was from Hayden's report here: https://www.haydencapital.com/wp-content/uploads/Hayden-Capital_Pinduoduo-Memo.pdf
On the point of why I found it sketchy - the biz model of PDD is to go by turnover because they sell things at dirt cheap prices. As of yet, they've basically been squeezing merchants and middle-man to provide such convenience to the end-consumer (ie Americans) - and they're eating it up like no one's business. The main premise of my suspicion is just the rate at which they've been growing and spending (and it's confirmed by companies like Meta) - where PDD is basically flooding ads and buying up tons of real-estate. Given the nature of their business and the expenses they've been incurring to scale and subsidies - I don't understand how does the math check out. I think like I shared in the video - PDD will go down in history, as one that was so well-managed with such efficient use of resource, or there might be something "interesting" going on.
Can you go into detail on which parts of the fin stmts are not believable or what u suspect?