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PDD, PDD Holdings Inc.
PDD Holdings runs online marketplaces — Pinduoduo in China and Temu abroad — that connect a large base of small merchants and manufacturers directly to bargain-hunting shoppers. It does not own the goods: merchants list and ship them, while PDD supplies the storefront, the traffic, and a fun, interactive, group-buying way to shop. It earns its keep from those merchants, chiefly by selling them online marketing and advertising and by taking a cut of transactions.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is Online marketing services and others (50%) and Transaction services (50%).
- Situation
- Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
- What moves the needle
- The business is a two-sided marketplace, so the test is whether the network feeds itself — shoppers drawn by low prices, merchants drawn by shoppers — and whether that pull lets PDD price its advertising and fees without driving sellers away. Watch the cost position: an asset-light platform that holds no inventory should throw off cash if the franchise holds, but weigh that against what it must spend to win and hold scale, and against a marketplace where low switching costs invite a price war the moment a rival undercuts it. The bad case is real — the filing leans on a global downturn, a China holding structure that owns the operating companies only by contract, and overseas data rules that can bite — so look to the record below for how much margin and return the model has actually earned.
- Is it a good business?
- Return on capital has run high across the record (median 32%, above 15% in 4 of 5 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 59% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.
Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.
Where the money comes from
read the 20-F →Revenue spreads across 2 lines, the largest Online marketing services and others at 50%.
- Online marketing services and others50%CN¥217.8B
- Transaction services50%CN¥214.1B
From the segment footnote of the company's own 20-F. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMDec 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| CN¥505M | CN¥1.7B | CN¥13.1B | CN¥30.1B | CN¥59.5B | CN¥93.9B | CN¥130.6B | CN¥247.6B | CN¥393.8B | CN¥431.8B | CN¥431.8B | RevenueRevenue |
| (CN¥73M) | CN¥1.0B | CN¥10.2B | CN¥23.8B | CN¥40.2B | CN¥62.2B | CN¥99.1B | CN¥155.9B | CN¥239.9B | CN¥243.0B | CN¥243.0B | Gross profitGross prof. |
| −14% | 59% | 78% | 79% | 68% | 66% | 76% | 63% | 61% | 56% | 56% | Gross marginGross mgn |
| (CN¥286M) | (CN¥596M) | (CN¥10.8B) | (CN¥8.5B) | (CN¥9.4B) | CN¥6.9B | CN¥30.4B | CN¥58.7B | CN¥108.4B | CN¥93.1B | CN¥93.1B | Operating incomeOp. inc. |
| −56.7% | −34.2% | −82.3% | −28.3% | −15.8% | 7.3% | 23.3% | 23.7% | 27.5% | 21.6% | 21.6% | Operating marginOp. mgn |
| (CN¥292M) | (CN¥525M) | (CN¥10.2B) | (CN¥7.0B) | (CN¥7.2B) | CN¥7.8B | CN¥31.5B | CN¥60.0B | CN¥112.4B | CN¥97.8B | CN¥97.8B | Net incomeNet inc. |
| — | — | — | — | — | 20% | 13% | 16% | 15% | 18% | 18% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| CN¥880M | CN¥9.7B | CN¥7.8B | CN¥14.8B | CN¥28.2B | CN¥28.8B | CN¥48.5B | CN¥94.2B | CN¥121.9B | CN¥106.9B | CN¥106.9B | Operating cash flowOp. cash |
| CN¥756K | CN¥2M | CN¥497M | CN¥638M | CN¥652M | CN¥1.5B | CN¥2.2B | CN¥786M | CN¥709M | CN¥601M | CN¥601M | DepreciationDeprec. |
| CN¥1.2B | CN¥10.2B | CN¥17.5B | CN¥21.2B | CN¥34.7B | CN¥19.5B | CN¥14.7B | CN¥33.3B | CN¥8.8B | CN¥8.5B | CN¥8.5B | Working capital & otherWC & other |
| CN¥2M | CN¥9M | CN¥27M | CN¥27M | CN¥43M | — | — | — | — | — | CN¥43M | CapexCapex |
| 0.5% | 0.5% | 0.2% | 0.1% | 0.1% | — | — | — | — | — | 0.0% | Capex / revenueCapex/rev |
| CN¥879M | CN¥9.7B | CN¥7.7B | CN¥14.8B | CN¥28.2B | — | — | — | — | — | CN¥106.9B | Owner earningsOwner earn. |
| 174.1% | 555.3% | 59.0% | 49.1% | 47.3% | — | — | — | — | — | 24.8% | Owner earnings marginOE mgn |
| CN¥877M | CN¥9.7B | CN¥7.7B | CN¥14.8B | CN¥28.2B | — | — | — | — | — | CN¥106.9B | Free cash flowFCF |
| 173.8% | 554.9% | 59.0% | 49.1% | 47.3% | — | — | — | — | — | 24.8% | Free cash flow marginFCF mgn |
| — | — | -183% | — | — | — | 32% | 38% | 36% | 25% | 25% | ROICROIC |
| — | — | -54% | -28% | -12% | 10% | 27% | 32% | 36% | 24% | 24% | Return on equityROE |
| — | — | −54% | −28% | −12% | 10% | 27% | 32% | 36% | 24% | 24% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| CN¥1.3B | CN¥3.1B | CN¥21.8B | CN¥41.1B | CN¥87.0B | CN¥92.9B | CN¥149.4B | CN¥217.2B | CN¥331.6B | CN¥422.3B | CN¥422.3B | Cash & investmentsCash+inv |
| — | — | — | — | CN¥1.7B | CN¥14M | — | — | — | — | CN¥14M | InventoryInvent. |
| — | — | — | CN¥308M | CN¥1.1B | CN¥2.0B | CN¥4.0B | CN¥16.9B | CN¥28.3B | CN¥32.7B | CN¥32.7B | Accounts payablePayables |
| — | — | — | — | CN¥581M | (CN¥1.9B) | — | — | — | — | (CN¥32.6B) | Operating working capitalOper. WC |
| — | CN¥13.1B | CN¥40.4B | CN¥73.0B | CN¥149.5B | CN¥160.9B | CN¥216.6B | CN¥294.8B | CN¥415.6B | CN¥519.0B | CN¥519.0B | Current assetsCur. assets |
| — | CN¥12.1B | CN¥24.4B | CN¥45.8B | CN¥83.9B | CN¥93.7B | CN¥116.9B | CN¥152.9B | CN¥188.4B | CN¥213.7B | CN¥213.7B | Current liabilitiesCur. liab. |
| — | 1.1× | 1.7× | 1.6× | 1.8× | 1.7× | 1.9× | 1.9× | 2.2× | 2.4× | 2.4× | Current ratioCurr. ratio |
| — | CN¥9M | CN¥29M | CN¥41M | CN¥203M | CN¥2.2B | CN¥1.0B | CN¥980M | CN¥879M | CN¥1.3B | CN¥1.3B | Net PP&ENet PP&E |
| — | CN¥13.3B | CN¥43.2B | CN¥76.1B | CN¥158.9B | CN¥181.2B | CN¥237.1B | CN¥348.1B | CN¥505.0B | CN¥630.0B | CN¥630.0B | Total assetsAssets |
| (CN¥1.3B) | (CN¥3.1B) | (CN¥21.8B) | (CN¥41.1B) | (CN¥87.0B) | (CN¥92.9B) | (CN¥149.4B) | (CN¥217.2B) | (CN¥331.6B) | (CN¥422.3B) | (CN¥422.3B) | Net debt / (cash)Net debt |
| — | — | — | -58.5× | -12.4× | 5.6× | 588.6× | 1334.5× | — | — | 2116.6× | Interest coverageInt. cov. |
| (CN¥426M) | (CN¥992M) | CN¥18.8B | CN¥24.6B | CN¥60.2B | CN¥75.1B | CN¥117.8B | CN¥187.2B | CN¥313.3B | CN¥413.4B | CN¥413.4B | Shareholders’ equityEquity |
| Per share | |||||||||||
| 1.82B | 1.76B | 2.97B | 4.63B | 4.77B | 5.71B | 5.76B | 5.84B | 5.92B | 5.93B | 5.69B | Shares out (diluted)Shares |
| CN¥0.28 | CN¥0.99 | CN¥4.42 | CN¥6.51 | CN¥12.48 | CN¥16.44 | CN¥22.66 | CN¥42.41 | CN¥66.56 | CN¥72.83 | CN¥75.85 | Revenue / shareRev/sh |
| CN¥-0.16 | CN¥-0.30 | CN¥-3.44 | CN¥-1.51 | CN¥-1.51 | CN¥1.36 | CN¥5.47 | CN¥10.28 | CN¥19.00 | CN¥16.50 | CN¥17.18 | EPS (diluted)EPS |
| CN¥0.48 | CN¥5.49 | CN¥2.61 | CN¥3.20 | CN¥5.90 | — | — | — | — | — | CN¥18.77 | Owner earnings / shareOE/sh |
| CN¥0.48 | CN¥5.48 | CN¥2.61 | CN¥3.20 | CN¥5.90 | — | — | — | — | — | CN¥18.77 | Free cash flow / shareFCF/sh |
| CN¥0.00 | CN¥0.01 | CN¥0.01 | CN¥0.01 | CN¥0.01 | — | — | — | — | — | CN¥0.01 | Cap. spending / shareCapex/sh |
| CN¥-0.23 | CN¥-0.56 | CN¥6.34 | CN¥5.33 | CN¥12.62 | CN¥13.15 | CN¥20.44 | CN¥32.06 | CN¥52.95 | CN¥69.72 | CN¥72.61 | Book value / shareBVPS |
The diluted share count moved ×1.68 into 2018 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
The diluted share count moved ×1.56 into 2019 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +85.6%/yr | +42.3%/yr |
| Owner earnings / share | +86.9%/yr (4-yr) | +86.9%/yr (4-yr) |
| Capital spending / share | +63.4%/yr (4-yr) | +63.4%/yr (4-yr) |
| Book value / share | — | +40.8%/yr |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2020 the business turned a CN¥7.2B loss into CN¥28.2B of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2020 | FY2019 | FY2018 | FY2017 | FY2016 | |
|---|---|---|---|---|---|
| Reported net income | (CN¥7.2B) | (CN¥7.0B) | (CN¥10.2B) | (CN¥525M) | (CN¥292M) |
| Depreciation & amortizationnon-cash charge added back | +CN¥652M | +CN¥638M | +CN¥497M | +CN¥2M | +CN¥756K |
| Working capital & othertiming of cash in and out, other non-cash items | +CN¥34.7B | +CN¥21.2B | +CN¥17.5B | +CN¥10.2B | +CN¥1.2B |
| Cash from operations | CN¥28.2B | CN¥14.8B | CN¥7.8B | CN¥9.7B | CN¥880M |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −CN¥43M | −CN¥27M | −CN¥27M | −CN¥2M | −CN¥756K |
| Owner earnings | CN¥28.2B | CN¥14.8B | CN¥7.7B | CN¥9.7B | CN¥879M |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | — | — | — | −CN¥7M | −CN¥2M |
| Free cash flow | CN¥28.2B | CN¥14.8B | CN¥7.7B | CN¥9.7B | CN¥877M |
| Owner-earnings marginowner earnings ÷ revenue | 47% | 49% | 59% | 555% | 174% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- Can it pay its interest? 2116.6×ComfortableOperating income CN¥93.1B ÷ interest expense CN¥44M
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? +CN¥422.3BNet cash, debt-freeCash CN¥108.9B + ST investments CN¥313.4B − debt CN¥0
What this means
Cash and short-term investments exceed every dollar of debt by CN¥422.3B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Not enough dataIndustry peers: median 15%
What this means
The filing data didn't include the inputs for this check.
- High through the cycle5-yr median margin, range 47%–555%; latest CN¥106.9B = operating cash CN¥106.9B − maintenance capex CN¥43MIndustry peers: median 21%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 25% of revenue this year, a 59% median across 5 years.
- Cash-backedCash from ops CN¥106.9B ÷ net income CN¥97.8B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.07×HarvestingCapex CN¥43M ÷ depreciation CN¥601M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 1 of 2 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · CN¥431.8B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity PassCurrent ratio ≥ 2× · 2.43×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Earnings stability MissA profit every year (10-yr record) · 5 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record —Uninterrupted dividends · no dividend line tagged in the data
What this means
An unbroken dividend was Graham's mark of durability. This record carries no dividends-paid line in any year — common for partnerships, whose distributions file under tags the chain doesn't read — so the criterion is withheld rather than judged on silence.
- Earnings growth —Earnings +33% over the record · —
What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are CN¥15.83/share (latest year CN¥17.18), the averaged base the calculator's gate runs on, and book value is CN¥72.61/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2016–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 5 of 10
What this means
Lost money in 5 year(s), look at what happened there before trusting the average.
- Operating margin −58% → 24% (3-yr avg ends)
In the filing’s words The margin widened even though the filing names price competition — the gain came from volume or cost, not pricing power. Read where.
What this means
Through the cycle the operating margin widened — about −58% early to 24% lately, median −16% — pricing power intact or improving.
- Owner earnings growth +42%/yr
What this means
Owner earnings grew about 42% a year over the record.
- Worst year 2018 · −82.3% op. margin
What this means
Operations went underwater in 2018, understand why before trusting the good years.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investmentsCN¥422.3B
- InventoryCN¥14M
- Other current assetsCN¥96.7B
- Accounts payableCN¥32.7B
- Other current liabilitiesCN¥181.1B
From the company's latest filing.
How the cash was used, 2016–2020
Over the record, the business generated CN¥61.4B of operating cash; how management split it reads as a cash builder, a large share of cash simply built up on the balance sheet.
- ReinvestedCN¥109M · 0%
- BuybacksCN¥33M · 0%
- Retained (debt / cash)CN¥61.2B · 100%
- Returned to ownersCN¥33M
0% of the owner earnings the business produced over the span, CN¥0 as dividends and CN¥33M as buybacks.
- Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose CN¥421.0B.
- Average price paid for buybacks—
Buybacks ran CN¥33M over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count213.7%
The diluted count rose from 1815M to 5694M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Peers, Commercial Services & Supplies
The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| BABAAlibaba Group Holding Limited | $151.7B | 41% | 13.3% | 26%1y | 41%4y |
| PDDPDD Holdings Inc. | $64.0B | 65% | -4.2% | 32% | 59% |
| UBERUber Technologies Inc. | $52.0B | — | -22.0% | -12% | -4% |
| VVisa Inc. | $40.0B | — | 64.4% | 28% | 53% |
| PYPLPayPal Holdings Inc. | $33.2B | — | 15.8% | 16% | 19% |
| MAMastercard Incorporated | $32.8B | — | 54.3% | 81% | 46% |
| MELIMercadoLibre Inc. | $28.9B | 48% | 8.1% | 14% | 21% |
| FIFiserv, Inc. | $21.2B | 87%3y | 26.3% | 8% | 20% |
| Group median | — | 56% | 14.6% | 21% | 31% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American depositary shares, each of which represents four Class”; PDD Holdings Inc. reports in CNY, so every figure in this tool is stated per ADS and translated at CNY 1 = $0.148 (2026-08-20, reference rate) so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed, in CNY.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what PDD Holdings Inc. has delivered.
Through the cycle, PDD Holdings Inc. earns about $30.9B on its 48.2% median owner-earnings margin. This year’s 24.8% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.
—
9.0% = the 4.71% 10-year Treasury (Aug 18, 2026) + 4.29 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Prefilled with the 10-year Treasury (4.71%, as of Aug 18, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner earnings $15.8B on 1423M shares outstanding, the balance-sheet count at 2025-12-31; net cash $62.6B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Manual order: ← PCLA its page in the Manual PDS →
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