PDD Holdings Inc. stock fell after the disappointing Q2 results due to failure of expected revenue, intensified competition, and external challenges.
PDD Holdings Inc.’s stock fell after missing the market estimated revenue, as the company warned that the revenue growth will inevitably face pressure due to intensified competition and external challenges. The expected Revenue was 10.01KCr(CNY) but reported 9.71KCr(CNY) and the expected EPS was 20.02(CNY) but reported 23.24(CNY).
The weakening Chinese economy has impacted retail companies within the country. “Profitability will also likely be impacted as we continue to invest resolutely. We will invest heavily in the platform’s trust and safety, support high-quality merchants, and relentlessly improve the merchant ecosystem. We are prepared to accept short-term sacrifices and potential decline in profitability” said by d Ms. Jun Liu, VP of Finance of PDD Holdings.
Highlights of Q2 Results
- Total Revenue: Total revenues in the quarter were RMB97,059.5 million (US$13,355.8 million), an increase of 86% from RMB52,280.7 million in the same quarter of 2023.
- Operating Profit: Operating profit in the quarter was RMB32,564.5 million (US$4,481.0 million), an increase of 156% from RMB12,718.8 million in the same quarter of 2023. Non-GAAP operating profit in the quarter was RMB34,987.3 million (US$ 4,814.4 million), an increase of 139% from RMB14,609.4 million in the same quarter of 2023.
- Net income: Net income attributable to ordinary shareholders in the quarter was RMB32,009.4 million (US$4,404.6 million), an increase of 144% from RMB13,108.1 million in the same quarter of 2023. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB34,432.1 million (US$4,738.0 million), an increase of 125% from RMB15,269.4 million in the same quarter of 2023.
Consolidated Q2 Highlights
- Balance Sheets: The total current assets increased from RMB294,750,472 to RMB359,726,252, total assets increased from RMB348,078,120 to RMB432,744,342, total liabilities increased from RMB160,836,513 to RMB178,766,124, and total current liabilities increased from RMB152,900,901 to RMB170,833,104.
- Statements of Income: The revenue increased from RMB89,917,798 to RMB183,871,590, operating profit increased from RMB19,647,773 to RMB58,538,189, net income increased from RMB21,209,113 to RMB60,007,181, and EPS increased from 17.32(CNY) to 23.24(CNY).
- Cash Flows: Net cash generated from operating activities increased from RMB24,734,003 to RMB64,859,819, Cash equivalents and restricted cash at the end of the period increased from RMB83,434,459 to RMB116,116,929.
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