Motley Fool Money Bull vs Bear: Chinese Stock Showdown
Nov 18, 2025
Toby Bordelon, a skeptical Motley Fool analyst with a keen eye on Chinese markets, debates the viability of major Chinese stocks. He raises concerns about PDD Holdings' growth and financial transparency, while Emily Flippen defends its potential. The conversation shifts to Baidu, where Toby points out declining ad revenue, challenging its future against Emily's optimism around AI and self-driving initiatives. Lastly, they dissect iQiyi and Weibo, with Toby advising caution on both, emphasizing risks, while Emily argues for their hidden value. A dynamic clash of perspectives!
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PDD's Asset-Light Profit Engine
- PDD's marketplace model drives high profitability because it largely avoids inventory risk and captures ad revenue.
- Emily Flippen highlights nearly 25% net income margins and an EV/EBITDA under 10 as signs of bargain value.
Don't Buy Cheap Valuations Blindly
- Avoid assuming current cheap valuation is safe without a growth rebound because falling growth can compress multiples.
- Toby Bordelon warns that heavy spending and unclear metrics could make PDD a money pit if growth stalls.
Baidu's Growth-Margin Mismatch
- Baidu's core ad/search business is shrinking while AI and cloud are higher-growth but lower-margin today.
- This mix creates margin pressure until scale in AI/cloud improves enough to offset ad declines.