CHINAS SHINE OR WARNING SIGNS?!
- Mr. Bullish
- Aug 25
- 2 min read
PDD Holdings (Temu) — Beats & Buzz in the E-Commerce Game
Q2 Highlights:
Adjusted EPS: ¥22.07 (~US$3.08) — crushed expectations of around ¥15–16
Revenue: ¥103.98B (~US$14.5B), beating forecasts
Profit snapshots: Net profit dropped slightly YoY due to heavy spending on logistics and subsidies
Stock reaction: Jumped ~12% pre-market, closed up ~3–7%, YTD ~+40% growth
Why It’s Worth Your Attention:
Temu selling low-cost tech and goods is winning back consumers despite tariffs.
Government subsidies in China are keeping demand pulsing.
Leadership keeps pushing long-term investments (even if profits dip) = bold growth vibe.
Be Cautious Because:
Intense competition from Alibaba & JD.com = margin compression.
Tariff changes and investor volatility could flip sentiment fast.
Profit dips could spook those looking for near-term gains.
China’s Stock Boom: High Fives and Warning Signs
What’s Going On?
Chinese blue-chip stocks are crushing it, hitting decade-high levels thanks to AI hype, better policy vibes from Beijing, and massive household savings being invested.
Shanghai Composite is up 14% this year; iShares MSCI China ETF up ~29% —double the S&P 500’s growth.
Markets rallied strongly after Powell hinted at rate cuts, giving A-shares extra lift. Broader Asian markets also gained.
Household savings in China? A staggering 162 trillion yuan — a massive pool flowing into equities.
Why It Feels Electric — But Might be Too Hot
Bull Momentum: Supportive tech/AI sectors, institutional inflows, and Beijing encouraging “slow bull” markets paint a promising picture.
Bubble Alerts:
Stocks are rallying despite shaky fundamentals — deflation, property crisis, weak consumption remain unresolved.
In one month, market cap surged by almost $1 trillion, echoing 2015’s bubble vibes, when retail-driven speculation blew up. Margin debt levels are creeping back towards that era.
BoA warns of a meaningful correction ahead, citing 2015 parallels.
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