In a remarkable rally, shares of PDD Holdings skyrocketed in September. This development is mainly due to the Chinese government’s recent economic policy measures aimed at revitalizing and strengthening the world’s second largest economic system.
Although the Chinese economy has not yet fully recovered from the effects of the pandemic and past restrictive measures, the Chinese central bank’s interest rate cut last month provided a positive boost. PDD Holdings, the parent company of Pinduoduo and Temu, which was already performing better than the competition, was particularly favored.
Over the course of September, the stock rose an impressive 40%, supported by China’s expansionary monetary policy. Initially, the announcement of an American initiative against tariff loopholes led to a brief decline in the share price, but the upward trend continued after the People’s Republic’s significant economic policy interventions.
China’s Politburo backed up these measures in mid-September with a strong appeal to further stimulate the economy and strengthen consumer demand. These stimulating steps led to a rise in share prices not only for PDD Holdings, but also for industry giants such as Alibaba and JD.com. Nevertheless, PDD Holdings recorded remarkably dynamic growth. In the second quarter, the company increased sales by 86% and reported solid operating profits.
If the Chinese government’s stimulus measures bear fruit, PDD Holdings could enter an even steeper growth phase, which would push the price further higher.
It should be noted that while some experts are already betting on other stocks, PDD Holdings could still provide interesting investment opportunities.