Colin Huang, founder and owner of giant Chinese online firm PDD Holdings, watched US$14 billion wiped off his wealth on Monday as its stock tumbled almost 30% after below-expectations second-quarter earnings. Huang, once China's richest man, now has US$35.3 billion - down 28% versus previously, some reports say. As a result, he now ranks 50th on Forbes' list of the wealthiest globally and fourth in China, behind Zhong Shanshan, Zhang Yiming, and Ma Huateng.
Stock for PDD Holdings was at about $97.35 just after midday in New York. Stock sank over 30% in the lowest value this year so far. The parent company of popular e-store Temu saw a surge of almost 22% last year. The stock recently plunged because it wasn't able to meet projected profit and revenue numbers for the second quarter. Net income came in at 23.24 yuan ($3.20) per share, with revenue reaching 97.06 billion yuan ($13.64 billion), which is below the consensus estimate of 100.17 billion yuan ($14.1 billion). It marks a profit that is double a year earlier, but PDD said the revenue growth decelerated and likely will continue to decelerate amid increasing competition and headwinds from external factors.
Either way, PDD Holdings isn't in this alone in tough times. Equally, other e-commerce players in China are suffering from the economic hardships that have seen an increase in unemployment rates and reduction of household incomes. Alibaba revenues fell 28.77% this June, as JD.Com missed expectations for revenues, with Chinese youth saving literally every penny even going into "revenge saving" on social media amidst greater economic issues.
Huang, who founded Pinduoduo-now PDD Holdings-in 2015, saw his fortune rise from about $13.5 billion in 2019 to $55.3 billion in 2021 at its height. This year he has averaged a net worth of about $38.9 billion. Huang stepped down as chairman in 2021 but remains the company's largest shareholder. PDD, which launched the discount e-commerce site Temu in 2022, also competes with Shein. He is also the founder of online games company Xinyoudi and Ouku.com, another online store.
