$Pinduoduo Inc.(PDD)$ plummeted 14%, the earnings report this much worse ah, with curiosity I clicked on the official website, the official website looks like this:
Pinduoduo is determined to stick to its simple and unadorned approach, even on its official website and in the design of its office, without investing heavily in technological development and controlling costs very well.
The second step: earnings
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- Total revenues in the quarter were US$15,773.4 million, an increase of 46% in the same quarter of 2021.
- Operating profit in the quarter was US$1,321.4 million, an increase of 32% from in the same quarter of 2021.
- Non-GAAP operating profit in the quarter was US$1,681.9 million, an increase of 38% in the same quarter of 2021.
- Net income attributable to ordinary shareholders in the quarter was US$1,370.7 million, an increase of 43% in the same quarter of 2021
- Non-GAAP net income attributable to ordinary shareholders in the quarter was US$1,755.2 million, an increase of 43% in the same quarter of 2021.
Revenue and profit have both grown year-on-year and even significantly, so why is the stock price fluctuating so much? I have a few bold guesses:
1. High expectations
However, Pinduoduo's Q4 revenue of 39.8 billion yuan was lower than Refinitiv's expected 41.01 billion yuan, falling short of expectations by 3%. This is also why the market is disappointed.
Pinduoduo's revenue mainly includes online marketing services and other income, transaction service revenue, and merchandise sales revenue. Among them, online marketing service revenue accounts for nearly 80% of the total revenue, which may be the reason why Pinduoduo's revenue fell short of expectations.
Pinduoduo's financial report shows that in Q4, its online marketing revenue was about 31 billion yuan, a year-on-year increase of 38%. However, compared to the previous quarter, its growth rate decreased by 20%. During the Pinduoduo earnings call, an analyst asked Pinduoduo's Chairman and CEO, Chen Lei, about this issue, but he did not give a direct answer
2. Difficulties in overseas business
Of course, with Pinduoduo launching its cross-border e-commerce platform Temu in September last year, analysts are also concerned about whether the large investment subsidies for Temu have affected Pinduoduo's financial situation this time. After all, data from the Meta ad library shows that in January 2023 alone, Temu placed at least 6,400 ads on Facebook. However, Pinduoduo's CFO, Liu Jun, denied this, saying "The Temu business is still in the early stage and we haven't seen any significant financial impact." She said during the earnings call.
$Alphabet(GOOG)$ suspended $Pinduoduo Inc.(PDD)$
Google suspended the Play version of Pinduoduo app for security concerns, after malware issues were found on versions of the Chinese e-commerce app outside Google's app store, a company spokesperson said on Tuesday.
Overseas main business still relies on temu, if the offline is temu, the results will be very different.
Do I like PDD?
From a product perspective, I went from disliking PDD's user acquisition model to now buying some insignificant small items, which shows that I have accepted PDD's marketing approach and become an unconscious consumer.
Secondly, compared to other e-commerce platforms, PDD's advantages lie in its fast growth and high profits. While expanding its overseas business, the company's profitability far exceeds that of other platforms like $JD.com(JD)$ and $Alibaba(BABA)$. Otherwise, why would JD also join the billion-yuan subsidy and start a price war?
From the trend perspective, the stock has already fallen to the previous low point, and with the news of Google delisting, I will pay attention to the recent trend.
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