We came across a bullish thesis on PDD Holdings Inc. on Coughlin Capital’s Substack by Brian Coughlin. In this article, we will summarize the bulls’ thesis on PDD. PDD Holdings Inc.’s share was trading at $127.11 as of August 22nd. PDD’s trailing and forward P/E were 13.62 and 13.91 respectively according to Yahoo Finance.
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Pinduoduo (PDD) has emerged as one of the strongest players in China’s internet sector, growing faster than Alibaba, JD, and other peers, with superior profitability, a cash-rich balance sheet, and the surprising global success of Temu in the U.S. and Europe. On fundamentals alone, the company looks positioned for a market re-rating, yet the stock remains undervalued. Despite outpacing competitors in growth and margins, PDD trades at similar multiples to other “out-of-favor” Chinese internet names and at a steep discount to global peers such as Amazon and MercadoLibre.
The explanation lies partly in narrative. Alibaba and Tencent enjoy exposure to cloud and AI, areas investors prize for future growth, whereas PDD is seen narrowly as an e-commerce company. Without a clear “next leg” story, the market applies a discount. More importantly, the company’s stance on capital allocation is a key overhang. While Alibaba, Tencent, JD, and even Meituan have embraced buybacks or capital returns, PDD has done nothing, allowing cash to accumulate with no signal of shareholder alignment.
In a skeptical market for Chinese equities, this silence is damaging, raising concerns about credibility and whether reported cash is tangible. Buybacks are not just financial optics but serve as proof that management recognizes undervaluation, that cash generation is real, and that shareholders matter. PDD’s operational excellence is overshadowed by its lack of trust-building actions, leaving investors to question management’s priorities. Until the company addresses capital returns, the stock is likely to remain stuck in the penalty box despite its strong fundamentals.
Previously we covered a bullish thesis on PDD Holdings Inc. (PDD) by Favona Hathaway in May 2025, which highlighted the company’s rapid growth, strong financials, and dominant C2M-driven e-commerce model with global expansion through Temu. The company’s stock price has appreciated approximately by 29.86% since our coverage. This is because PDD’s growth momentum and global traction continued. The thesis still stands as its long-term outlook remains compelling. Brian Coughlin shares a similar view but emphasizes the lack of capital returns as the main overhang.
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