Emily Flippen

PDD Holdings was able to grow profits at nearly twice the rate of revenue in the quarter

Even with all of the craziness going on with issues of dropshipping and the removal of De Minimis in the United States, it has nearly 25% net income margins over the past year.

I'm so compelled by this opportunity.

Oh my gosh, Toby, you think the valuation multiples are going to come down?

I mean, okay, this business has a market cap of somewhere like $180 billion.

Nearly $60 billion of that is in cash.

So, it has an enterprise value to EBITDA of less than 10X while growing its bottom line earnings per share double digits.

I mean, even if the top line is only growing 9%, that's downright cheap.

That's too cheap to ignore.

Yeah, I think that's fair.

I never get the full color that I want from Chinese companies and can feel a little criminal about the fact that they don't even give reportable segments when it comes down to what sales come from Timu versus the Pendle Dwell marketplace.

We disagree, but still, I think the valuation is considerable for maybe more risk-tolerant investors.

Okay.

Toby's right.

You can't fight me.

Unfortunately, you can't play with the headline numbers here, which is, Toby is right.

The ad market in China right now, it's bad across the board.

Baidu in particular, its dominance in search especially, it's having the alphabet problem, which is, it's still there, but they're losing ground, they're losing market share, and revenue is falling.

and its core business is ad placements.

That's just been incredibly weak for this company.