Earnings rally in Pinduoduo sends Chinese technology ETFs higher
Toa55/iStock via Getty Images

An earnings-related rally in Pinduoduo (NASDAQ:PDD) gave a lift to exchange traded funds tied to the Chinese tech sector on Monday.
The rally included First Trust Chindia ETF (NYSEARCA:FNI), Invesco Golden Dragon China Portfolio ETF (NASDAQ:PGJ), Emerging Markets Internet & E-commerce ETF (NASDAQ:EWEB), Emerging Markets Internet & Ecommerce ETF (NYSEARCA:EMQQ) and Invesco China Technology ETF (NYSEARCA:CQQQ), which surged in intraday trading after Pinduoduo (PDD) topped the consensus mark in Q3.
Shares of the e-commerce platform developer rose more than 13% after reporting 65% growth in revenue. The company also projected an increase in R&D investment to further enhance its supply chain efficiency.
PDD is owned by 103 different ETFs and forms a major part of First Trust Chindia ETF (FNI), with a portfolio weight of 9.64% as per ETF.com. This is the highest concentration amid any ETF.
Other ETFs with high allocation to PDD stock include: Invesco Golden Dragon China Portfolio ETF (PGJ) with 8.54% weighting, Emerging Markets Internet & E-commerce ETF (EWEB) with 8.20% weighting, Emerging Markets Internet & Ecommerce ETF (EMQQ) with 7.62% weighting and Invesco China Technology ETF (CQQQ) with 7.45% weighting.
Most of the Chinese stocks are higher during the intraday trading, despite recent unrest in China related to the country's renewed zero-COVID policy. Alibaba (BABA) was up by more than 2%, while Tencent (OTCPK:TCEHY) rose 2.5%. Baidu (BIDU) shares rose 3%, Weibo (WB) gained 2%, NetEase (NTES) and JD.com (JD) rose almost 3%.
The KraneShares CSI China Internet ETF (KWEB), the second largest ETF holder of PDD with approximately 4.67M shares was up by ~5%.
On YTD basis, PDD shares have gained more than 33%, making it a standout in the sector. Overall, FNI has lost around 25%, PGJ has fallen around 35%, EWEB has dropped more than 34%, EMQQ has declined around 36% and CQQQ has retreated more than 39% of its value.
For more on PDD following the latest earnings data, Seeking Alpha contributor Michael Wiggins De Oliveira says even if the Pinduoduo's growth rates slow down soon and grow at a subdued 30% CAGR, it still looks favorable.
Last week, exchange traded funds focused on Chinese economy were mostly down after Beijing increased COVID lockdowns.