PDD Holdings Misses Estimates, Stocks Fall on Revenue Growth Concerns By Investing.com

PDD Holdings ( PDD ) reported second-quarter earnings that fell short of analysts’ expectations, sending its shares down more than 13% as the company warned of slowing growth ahead.

The Chinese e-commerce giant posted revenue of RMB 97.06 billion ($13.36 billion) for the quarter ended June 30, up 86 percent from a year earlier, but below the consensus estimate of RMB 99.42 billion. Adjusted earnings per share came in at RMB 23.24 ($3.20), beating expectations of RMB 20.43.

Despite the earnings decline, investors focused on the company’s cautious outlook. PDD Holdings warned that revenue growth “will inevitably face pressure from intense competition and external challenges”.

“In the last quarter, our revenue growth rate slowed from quarter to quarter,” said Jun Liu, VP Finance. “Profitability is also likely to be affected as we continue to invest decisively.”

The company’s operating profit rose 156% year-on-year to RMB 32.56 billion (US$4.48 billion), while net income attributable to shareholders rose 144% to RMB 32.01 billion (4. 40 billion USD).

PDD Holdings chairman and co-CEO Lei Chen emphasized the company’s commitment to high-quality development, saying, “We are prepared to accept short-term sacrifices and potential decline in profitability.”

The e-commerce firm ended the quarter with RMB 284.9 billion ($39.2 billion) in cash, cash equivalents and short-term investments, up from RMB 217.2 billion at the end of 2023.