To The Moon

Valuation & Market Context

• Alibaba ( $Alibaba(BABA)$ ) trades around 14.2× forward P/E as of August 23, 2025. Barron’s recently reported a forward P/E of 13×, which is notably below its five‑year average, highlighting an attractive valuation setup.

• Pinduoduo ( $PDD Holdings Inc(PDD)$ ) presents more mixed figures:

• Yahoo Finance notes a forward P/E near 13.9×.

• TipRanks/ SimplyWallSt show a P/E of about 13×, well below the peer average of 56.8×.

• Seeking Alpha and Nasdaq sources have pegged forward P/E anywhere from 8× to 12.8× - depending on the growth expectations baked in.

Bottom line: Both Alibaba and Pinduoduo appear cheap or at least modestly valued meaningful if China's consumer recovery kicks into gear.

Is Consumer Recovery a Game-Changer?

For Alibaba ( $Alibaba(BABA)$ ):

Growth has been sluggish recent quarterly net income and revenue both missed expectations but core segments are showing signs of life:

• Taobao/Tmall grew 9% YoY

• Cloud business grew 18% YoY

• International commerce, digital media each rose >20%

The company has aggressively returned capital: $12B in buybacks + $4.6B dividend.

For Pinduoduo ( $PDD Holdings Inc(PDD)$ ):

Temu’s global expansion is fueling strong growth:

• Q1 revenue surged 131% YoY, beating estimates; net income also exceeded expectations.

Analysts see continued upside as long as cross‑border demand remains strong and regulatory risks stay manageable.

However, concerns remain over U.S. scrutiny of Temu and macroeconomic policy shifts.

Trading Insight & Strategy

Short Summary:

• Both stocks sport forward P/Es in the low-teens suggesting value if earnings rebound.

• Alibaba offers more stability, diversified revenue streams, and strong shareholder returns.

• Pinduoduo offers explosive growth potential but with added regulatory and geopolitical risk.

Strategic Moves:

Options strategy ideas:

• $BABA: Sell covered calls to collect premium while holding exposure especially premium-rich if implied vol is elevated.

• $PDD: Consider buying out-of-the-money calls for asymmetric upside if Temu news remains favorable, OR place tight stop-losses to limit drawdown if rhetoric shifts.

Long-term thesis:

• If China’s consumption truly revives, both will benefit but Alibaba likely offers a safer upside, given its incipient valuation discount, shareholder returns, and diversified exposure.

• Pinduoduo could outperform, but only under ideal conditions okay trade, but manage risk.

[Love]Like, Share & Follow

Disclaimer: This article is provided for informational purposes only and does not constitute financial, investment, legal, or tax advice, nor the solicitation of any offer to buy or sell securities. The views expressed are those of the author and do not account for individual financial circumstances. Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results. You alone are responsible