Pinduoduo 4000-word in-depth research report

$PDD(PDD.US)$Alibaba(BABA.US) $JD.com(JD.US) Recently researched Pinduoduo, the biggest conclusion is: using an extreme supply chain to maintain the domestic low-price foundation, relying on Temu to seek global growth.
🎯Core logic: As an e-commerce platform, the core is the C2M model directly connecting factories and consumers, compressing intermediate links to reduce costs; leveraging the scale effect of 900 million annual active users to solidify the "lowest price" mindset; profitability mainly comes from online marketing services (merchant ads), with a light-asset model supporting high gross margins.
📈Financial highlights: 2024 ROE reached 44.9% (industry-leading), gross margin remained stable at 55%-67% over the past five years (far above retail benchmarks), net profit margin reversed from -12.1% in 2020 to 28.5% in 2024 (29.6% in 2025Q2); 2024 free cash flow was 120.96 billion (five consecutive years positive), debt-to-asset ratio dropped from 62.1% to 36.2%, financial structure is robust; revenue growth shifted gears (7.5% YoY in 2025Q2), but net profit remains resilient, only Temu subsidies caused a sharp drop in net margin in 2025Q1.
🔍Growth engine: Temu is the key to the future, replicating the domestic low-price model overseas (low-to-mid consumer groups in Europe/America and emerging markets), short-term investments impact profits but strong cash flow provides room for error, its success will determine whether Pinduoduo can go from "China" to "global".