PDD's Second-Quarter Profit Expected to Drop

Dow Jones13:14

PDD Holdings is scheduled to report second-quarter results on Monday. Here's what you need to know:

NET PROFIT FORECAST: The Chinese e-commerce giant's net profit is projected at 24.40 billion yuan, equivalent to $3.62 billion, based on the consensus estimate of 9 analysts polled by FactSet. That would be weaker compared with the 30.75 billion yuan it reported a year earlier.

REVENUE FORECAST: Quarterly revenue is expected at 115.41 billion yuan, according to FactSet, up from 103.985 billion yuan a year earlier.

U.S.-listed PDD's ADRs fell 25% in the second quarter of 2026, but have risen 18% since the end of June. Its ADRs are down 20.45% year to date.

WHAT TO WATCH:

--PROFIT: Citi analysts expect PDD's adjusted net profit to decline 28% from a year earlier in 2Q, according to a research note. Given the revenue and profit misses in the first quarter, Citi analysts are watching whether soft online marketing revenue and non-operating income could again affect the revenue and profit print, they said.

---NEAR-TERM HEADWINDS: Deutsche Bank said "the company's fundamentals haven't yet bottomed out and near-term catalysts are not apparent." DB's concerns include domestic tax compliance, which continues to weigh on PDD's revenue growth. Competition from live-streaming and social e-commerce also challenge its market position, DB said in commentary.

The bank also points out regulatory headwinds for PDD's Temu online marketplace in Europe, a "consistent lack of shareholder returns and insufficient disclosure transparency."

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