PDD's performance last quarter exceeded expectations, but monthly active users plummeted by 46%

PDD (PDD.US) benefited in the second quarter from increased stimulus measures by the central government to boost consumption, with revenue for the quarter ending in June increasing by 7% year-on-year to approximately 104 billion RMB, marking the slowest growth rate in recent years, but still slightly above analyst expectations. Net profit fell by 4% to 30.75 billion RMB, while adjusted operating income decreased by 5% to 32.7 billion RMB, exceeding market expectations. Following the announcement, PDD's U.S. stock fell by over 2% in pre-market trading.

PDD faces challenges from fluctuations in the Chinese consumer market, increased tariffs imposed by the U.S., and the cancellation of tax loopholes for discount retailers such as its platform Temu, with the company experiencing a significant drop of up to 46% in monthly active users last quarter.

PDD's Vice President of Finance, Liu Jun, stated that revenue growth further slowed this quarter, primarily due to intense competition, and the company will continue to focus on long-term value creation, although ongoing investments may weigh on profitability in the short term