Temu-Owner PDD Shares Rise Despite Q4 Revenue Miss; Retail Investors Smell Bull Trap

E-commerce major PDD Holdings, Inc. (PDD) reported a higher-than-expected profit for the fourth quarter on Thursday, lifting shares and sentiment for the stock among retail investors.

U.S.-listed shares gained 4% to $130.92, the highest in a month.

PDD, which operates e-commerce sites Pinduoduo in China and Temu in international markets, said adjusted earnings rose to 20.15 yuan ($2.76) per American depositary share in the December quarter, ahead of a 20.06 yuan estimate from FactSet.

Revenue climbed 24% to 110.61 billion yuan, but missed the Street's expectations of 113.62 billion renminbi.

PDD, which changed its name from Pinduoduo and moved its headquarters from China to Ireland in 2023, competes with Alibaba (BABA) and JD.com (JD). With Temu, the company has of late captured market share in North American markets.

PDD's latest results show continued weakness in its core Chinese market, where consumer spending remains dull due to economic headwinds. 

Beijing has rolled out several measures to revive the business environment, including one earlier this month to boost citizen incomes in hopes that they will spend more, which is supporting shares of some Chinese companies.

In Q4, PDD's revenue from online marketing services rose 17% to 57.01 billion yuan. Transaction services revenue rose to 53.6 billion yuan from 40.21 billion yuan a year ago.

On Stocktwits, retail sentiment for the stock notched higher in the 'bullish' territory, and message volume increased nearly 900%, signaling strong interest.

PDD sentiment and message volume as of March 20, 2025 | Source: Stocktwits

However, several users suggested that Thursday's rally might not hold, with one calling it a "bull trap".

PDD shares are up 38.7% year to date.

($1 = 7.24 Chinese yuan)

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