PDD Holdings Overtakes Tesla as Largest Cash Hoard Among Non-Paying Public Companies

PDD Holdings, the parent company of Chinese e-commerce giants Temu and Pinduoduo, has amassed $38 billion in cash reserves, surpassing Tesla and maintaining the largest net cash position among public companies that do not buy back stock or pay dividends, underscoring PDD’s unique financial strategy amid intense market competition.

PDD Holdings tops list of public companies with the largest cash reserves, surpassing Tesla and others

PDD Holdings, the parent company of Chinese e-commerce giants Temu and Pinduoduo, maintains the largest net cash position among all public companies that do not buy back shares or pay dividends, according to a Financial Times analysis.

The $38 billion cash pile is twice that of Tesla, the second-largest company of its kind.

The Financial Times analysed the MSCI investment markets index and identified five companies out of 151 with net capital exceeding $5 billion that neither pay dividends nor buy back shares.

Following Tesla and PDD, the list also includes Li Auto, a Chinese electric vehicle maker; Adyen, a European payments group; and GE Vernova, a maker of electric turbines that split from GE earlier this year.

PDD defends cash retention strategy amid market concerns after disappointing results and share price decline

The report noted that other listed Chinese companies, including Meituan and JD, have recently disclosed share buybacks while PDD is holding on to the cash.

PDD should have responded promptly to a request for comment. However, in a statement to the Financial Times, it rejected allegations that the lack of buybacks raised concerns about its accounting or balance sheet.

“Each company makes decisions based on its unique circumstances and strategic considerations. To suggest there is a ‘red flag’ just because Company A does not take the same approach as Company B is, quite frankly, absurd,” PDD said.

On September 2, PDD’s quarterly results were disappointing, and the company warned that intense competition would negatively impact future earnings. This caught Wall Street by surprise.

Founder Colin Huang’s brief stint as China’s richest man ended with shares falling more than 30%, wiping out $50 billion in PDD’s market value.

Ahead of the release of the Science Gains report, a Council on Foreign Relations researcher said China’s ultra-competitive e-commerce sector is a manifestation of Beijing’s economic policies that result in chronic overcapacity.