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BEIJING, August 29 (TMTPOST)— The American depositary receipts (ADRs) of Pinduoduo rose as much as over 25% and settled nearly 15% higher Monday, the largest daily gain since May 26,after the Chinese e-commerce giant surprisingly recorded the robust growth in the past quarter.
Source: Visual China
In the quarter ended June 30, 2022, Pinduoduo posted better-than-expected results both the top and bottom line. Its revenue increased 36% year-over-year (YoY) to RMB31.44 billion (US$14.69 billion), topping the analysts’ estimates of RMB23.645 billion. The Non-GAAP diluted earnings per American depositary share (ADS) reached RMB7.54, well above the expected RMB2.75, compared with the loss of RMB0.06 a year earlier. The Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB10.78 billion, up 161% YoY.
Pinduoduo’s core business registered a rapid 39% YoY increase in the second quarter as revenues from online marketing services and others were RMB25.17 billion, while the same quarter last year recorded RMR18.08 billion. Revenues from transaction services, including e-commerce sales commission and grocery service Duoduo Maicai, added 107% YoY to RMB62.16 billion. Sales and marketing expenses in the quarter were RMB11.34 billion with a YoY increase of 9%, which was mainly due to increased spending in promotion and advertising activities.
The strong performance highlights consumers were regaining spending appetites in the traditional Dragon Boat Festival and the mid-year event 618, the second largest online shopping festival in China. Pinduoduo attributed the bump to pent-up demand following the Covid-19 lockdowns. “We saw a recovery in consumer sentiment in the second quarter especially during the 618 shopping festival, a reflection of the resilience of overall consumption,” Pinduoduo Chairman and CEO Chen Lei commented.
In a post-earnings call with analysts, Liu Jun, Vice President of Finance, noted it is not appropriate to take the earnings in the second quarter as a measure to evaluate Pinduoduo’s future performance since the postponement of certain projects and lower business-related expenses during the first half of the quarter affected overall expenses in short term.
Earlier this month, Pinduoduo’s two domestic rivals reported mixed results in the same quarter. Alibaba, the No.1 Chinese e-commerce company saw its first YoY decline in revenue and the net income dropped 50% YoY. JD.com’s revenue increased 5.4% YoY and net profit jumped 4.5 times from a year ago.
