Shares in PDD Holdings experienced a substantial surge on Tuesday following the release of their quarterly results, which far exceeded the expectations of Wall Street. Not only did this online retailer reveal impressive earnings, but it also showcased astonishing growth in the market.
In the third quarter, PDD reported earnings of 11.61 Chinese yuan ($1.64) per share, with a total revenue of 68.8 billion yuan ($9.7 billion). These numbers greatly surpassed estimates provided by analysts surveyed by FactSet, who had predicted earnings of 8.95 yuan per share and revenue of 55.2 billion yuan.
Lei Chen, the chairman and co-CEO of the company, expressed their dedication to generating value through innovation, emphasizing that this commitment forms the foundation of their high-quality development. Furthermore, they highlighted the decisive investments made in areas such as agritech, supply chain technology, and core R&D capabilities.
PDD, as the owner of discount online retail platforms Pinduoduo in China and Temu internationally, has become a significant rival to both Alibaba and Amazon in the e-commerce industry. Despite facing an economic slowdown in China and a more subdued consumer landscape in the U.S., PDD has achieved a remarkable 35% growth in earnings and a staggering 94% increase in revenue compared to the same quarter last year. These figures position PDD as a leader in online retail, causing U.S.-listed shares of the company to jump 14% in premarket trading on Tuesday.
One possible explanation for this success could be attributed to the “Walmart effect.” Pinduoduo and Temu, with their appealing deep discounts, have managed to make significant progress while maintaining solid profitability. This growth is undoubtedly enviable for any player in the online retail market.
Overall, PDD Holdings has achieved remarkable results, surpassing expectations and solidifying its position as a dominant player in the online retail industry.