Financial Data and Key Metrics Changes - In Q4 2024, total revenues increased by 24% year-over-year to RMB 110.6 billion, while full-year revenue reached RMB 393.8 billion, growing 59% year-over-year [10][33] - Revenue from online marketing services was RMB 57 billion, up 17% year-over-year, and transaction services revenue was RMB 53.6 billion, up 33% year-over-year [33] - Total cost of revenues increased by 36% to RMB 47.8 billion in Q4 2024, and for the full year, it rose by 68% to RMB 153.9 billion [34] - Non-GAAP operating profit for Q4 was RMB 28 billion, compared to RMB 24.6 billion in the same quarter of 2023, with a non-GAAP operating profit margin of 24% [39][41] - Net income attributable to ordinary shareholders was RMB 27.4 billion for Q4 and RMB 112.4 billion for the full year [40] Business Line Data and Key Metrics Changes - The quality merchant support program expanded its reach across agricultural and industrial sectors, enhancing operational efficiency for over 10 million merchants [11][21] - Logistics support measures for remote regions drove double-digit order growth and extended free shipping to nearly 100 million consumers [12][20] Market Data and Key Metrics Changes - The company noted a moderation in revenue growth due to significant ecosystem investments and intensified competition [10] - The platform's initiatives have led to increased consumer satisfaction and trust, with a broader range of high-quality products being offered [25][26] Company Strategy and Development Direction - The company is focused on high-quality development, emphasizing ecosystem upgrades and supply chain transformation [15][18] - Strategic initiatives include a RMB 10 billion fee reduction program and logistics support to promote e-commerce services in remote regions [11][20] - The company aims to build a classic global platform and shopping environment while maintaining high compliance standards [15][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged external uncertainties and intense competition impacting short-term revenue growth, but expressed confidence in long-term sustainable growth through ecosystem investments [81] - The company remains committed to delivering high-quality products globally and enhancing supply chain efficiency [70][75] Other Important Information - The establishment of the Merchant Rights Protection Committee aims to enhance communication with merchants and optimize their experiences [27][29] - The company is actively exploring corporate social responsibility initiatives to create greater value for the communities it serves [74][75] Q&A Session Summary Question: Long-term goals for platform ecosystem development and consumer-side initiatives - Management highlighted that initiatives like the RMB 10 billion fee reduction program are effective in lowering operational costs for merchants, which in turn enhances consumer experience and product variety [49][52] - On the consumer side, promotional campaigns during Q4 provided substantial savings and increased participation from brands, driving growth [54][56] Question: Insights into the competitive landscape and adjustments to development strategies - Management noted that competition drives continuous advancement in the e-commerce industry, and they are refining strategies to meet shifting consumer preferences [64][66] - The company is committed to long-term high-quality investments to enhance consumer experience and diversify quality supply [66] Question: Revenue and profit trends in the near term - Management indicated that external uncertainties and increased investments may lead to fluctuations in revenue growth and profitability, but they remain focused on long-term goals [81][82] Question: Balancing platform responsibility with duties to shareholders - Management emphasized that taking on social responsibility aligns with long-term accountability to shareholders, fostering a sustainable ecosystem that benefits all participants [85][88]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) This section outlines the company's strategic direction and presents key financial and operational results for Q4 and fiscal year 2024 [Management Commentary](index=1&type=section&id=Management%20Commentary) Management outlines a strategic commitment to sustainable growth, platform innovation, and ecosystem investment for long-term value creation - The company commits to a high-quality development strategy, emphasizing platform innovations and industry support for the e-commerce ecosystem[3](index=3&type=chunk) - Digital capabilities enable platform investments to support quality merchants and deliver consumer value[3](index=3&type=chunk) - Future strategy prioritizes continued investments in the platform ecosystem as a cornerstone for long-term value creation[3](index=3&type=chunk) [Fourth Quarter 2024 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202024%20Highlights) Q4 2024 revenues reached RMB 110.6 billion, a 24% YoY increase, driven by strong online marketing and transaction services performance Financial Metric | Financial Metric | Q4 2024 (RMB million) | Q4 2023 (RMB million) | Change (YoY) | | :--- | :--- | :--- | :--- | | **Total Revenues** | 110,610.1 | 88,881.0 | +24% | | **Operating Profit** | 25,592.2 | 22,395.0 | +14% | | **Net Income** | 27,446.6 | 23,280.3 | +18% | | **Non-GAAP Operating Profit** | 27,996.5 | 24,579.9 | +14% | | **Non-GAAP Net Income** | 29,850.9 | 25,476.5 | +17% | Revenue Stream | Revenue Stream | Q4 2024 (RMB million) | Q4 2023 (RMB million) | Change (YoY) | | :--- | :--- | :--- | :--- | | Online marketing services | 57,011.1 | 48,675.6 | +17% | | Transaction services | 53,599.0 | 40,205.4 | +33% | Earnings Per ADS | Earnings Per ADS | Q4 2024 (RMB) | Q4 2023 (RMB) | | :--- | :--- | :--- | | **Basic EPS (ADS)** | 19.76 | 17.00 | | **Diluted EPS (ADS)** | 18.53 | 15.83 | | **Non-GAAP Diluted EPS (ADS)** | 20.15 | 17.32 | - Total operating expenses increased **19% YoY** to **RMB 37.2 billion**, driven by an **18% rise** in sales and marketing expenses for promotion and advertising[6](index=6&type=chunk)[7](index=7&type=chunk) [Fiscal Year 2024 Financial Highlights](index=3&type=section&id=Fiscal%20Year%202024%20Unaudited%20Financial%20Results) Fiscal Year 2024 saw robust growth with total revenues surging 59% YoY to RMB 393.8 billion, driven by a significant increase in transaction services revenue Financial Metric | Financial Metric | FY 2024 (RMB million) | FY 2023 (RMB million) | Change (YoY) | | :--- | :--- | :--- | :--- | | **Total Revenues** | 393,836.1 | 247,639.2 | +59% | | **Operating Profit** | 108,422.9 | 58,698.8 | +85% | | **Net Income** | 112,434.5 | 60,026.5 | +87% | | **Non-GAAP Operating Profit** | 118,306.4 | 65,777.6 | +80% | | **Non-GAAP Net Income** | 122,343.6 | 67,899.3 | +80% | Revenue Stream | Revenue Stream | FY 2024 (RMB million) | FY 2023 (RMB million) | Change (YoY) | | :--- | :--- | :--- | :--- | | Online marketing services | 197,934.2 | 153,540.6 | +29% | | Transaction services | 195,901.9 | 94,098.7 | +108% | Earnings Per ADS | Earnings Per ADS | FY 2024 (RMB) | FY 2023 (RMB) | | :--- | :--- | :--- | | **Basic EPS (ADS)** | 81.24 | 44.33 | | **Diluted EPS (ADS)** | 76.01 | 41.15 | | **Non-GAAP Diluted EPS (ADS)** | 82.71 | 46.51 | [Balance Sheet and Cash Flow Summary](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Summary) The company's financial position strengthened significantly by December 31, 2024, with substantial increases in cash and operating cash flow - Cash, cash equivalents, and short-term investments significantly increased to **RMB 331.6 billion** (**US$45.4 billion**) as of December 31, 2024, from **RMB 217.2 billion** in 2023[11](index=11&type=chunk) - Net cash from operating activities for FY2024 was **RMB 121.9 billion**, up from **RMB 94.2 billion** in FY2023, driven by increased net income and working capital changes[17](index=17&type=chunk) - Net cash generated from operating activities in Q4 2024 totaled **RMB 29.5 billion**[10](index=10&type=chunk) [Financial Statements and Supplementary Data](index=8&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's detailed consolidated balance sheets, income statements, cash flow statements, and non-GAAP reconciliations [Condensed Consolidated Balance Sheets](index=8&type=section&id=PDD%20HOLDINGS%20INC.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2024, total assets grew to RMB 505.0 billion, with significant increases in liabilities and shareholders' equity Balance Sheet Item | Balance Sheet Item | Dec 31, 2024 (in RMB thousands) | Dec 31, 2023 (in RMB thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 415,648,232 | 294,750,472 | | **Total Assets** | 505,034,316 | 348,078,120 | | **Total Current Liabilities** | 188,422,853 | 152,900,901 | | **Total Liabilities** | 191,721,192 | 160,836,513 | | **Total Shareholders' Equity** | 313,313,124 | 187,241,607 | [Condensed Consolidated Statements of Income](index=10&type=section&id=PDD%20HOLDINGS%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The income statement details the company's revenue and expense performance for Q4 and the full fiscal year 2024, showing significant growth Income Statement (FY) | Income Statement | FY 2024 (in RMB thousands) | FY 2023 (in RMB thousands) | | :--- | :--- | :--- | | **Revenues** | 393,836,097 | 247,639,205 | | Costs of revenues | (153,900,374) | (91,723,577) | | **Operating profit** | 108,422,862 | 58,698,762 | | **Net income** | 112,434,512 | 60,026,544 | Income Statement (Q4) | Income Statement | Q4 2024 (in RMB thousands) | Q4 2023 (in RMB thousands) | | :--- | :--- | :--- | | **Revenues** | 110,610,106 | 88,881,036 | | Costs of revenues | (47,798,376) | (35,078,272) | | **Operating profit** | 25,592,215 | 22,394,968 | | **Net income** | 27,446,637 | 23,280,309 | [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=PDD%20HOLDINGS%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Fiscal year 2024 saw net cash from operating activities increase significantly to RMB 121.9 billion, with substantial investing activities Cash Flow | Cash Flow | FY 2024 (in RMB thousands) | FY 2023 (in RMB thousands) | | :--- | :--- | :--- | | **Net cash from operating activities** | 121,929,292 | 94,162,531 | | Net cash used in investing activities | (118,356,036) | (55,431,278) | | Net cash from financing activities | 1,164 | (8,960,626) | | **Cash at end of year** | 126,194,421 | 121,779,905 | [Reconciliation of Non-GAAP Measures](index=15&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES%20TO%20THE%20MOST%20DIRECTLY%20COMPARABLE%20GAAP%20MEASURES) This section reconciles GAAP to non-GAAP financial measures for Q4 and FY2024, primarily adjusting for share-based compensation Reconciliation (Operating Profit) | Reconciliation | Q4 2024 (in RMB thousands) | FY 2024 (in RMB thousands) | | :--- | :--- | :--- | | **Operating profit (GAAP)** | 25,592,215 | 108,422,862 | | Add: Share-based compensation | 2,404,255 | 9,883,564 | | **Non-GAAP operating profit** | 27,996,470 | 118,306,426 | Reconciliation (Net Income) | Reconciliation | Q4 2024 (in RMB thousands) | FY 2024 (in RMB thousands) | | :--- | :--- | :--- | | **Net income (GAAP)** | 27,446,637 | 112,434,512 | | Add: Share-based compensation | 2,404,255 | 9,883,564 | | Other adjustments | 29 | 25,485 | | **Non-GAAP net income** | 29,850,921 | 122,343,561 |

Core Insights - PDD Holdings Inc. reported mixed earnings for Q4 2024, with revenue falling short of expectations while other metrics exceeded analyst forecasts [1] Financial Performance - The company missed revenue targets but achieved better-than-expected results in other financial metrics [1]

Core Viewpoint - PDD Holdings Inc. reported quarterly earnings of $2.76 per share, exceeding the Zacks Consensus Estimate of $2.56 per share, and showing an increase from $2.40 per share a year ago, indicating a 7.81% earnings surprise [1] Financial Performance - The company posted revenues of $15.15 billion for the quarter ended December 2024, which was 3.34% below the Zacks Consensus Estimate, compared to $12.52 billion in the same quarter last year [2] - Over the last four quarters, PDD has surpassed consensus EPS estimates three times, but has only topped revenue estimates once [2] Stock Performance - PDD Holdings Inc. shares have increased approximately 29.8% since the beginning of the year, contrasting with a -3.5% decline in the S&P 500 [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $2.83 for the coming quarter and $12.21 for the current fiscal year, with revenues expected to be $15.16 billion and $65.75 billion respectively [7] - The estimate revisions trend for PDD is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Internet - Commerce industry, to which PDD belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in London, New York, Toronto, Vancouver, Sydney, and Perth [2][3] Group 2 - The company is committed to using technology to enhance workflows and has adopted various technological tools [4] - Proactive employs automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - PDD Holdings reported strong financial results for Q4 2024 and the fiscal year 2024, highlighting a commitment to sustainable growth and innovation in the e-commerce ecosystem [3][5][14]. Financial Performance - Total revenues for Q4 2024 reached RMB 110,610.1 million (US$ 15,153.5 million), marking a 24% increase from RMB 88,881.0 million in Q4 2023 [5][7]. - For the fiscal year 2024, total revenues were RMB 393,836.1 million (US$ 53,955.3 million), a significant increase of 59% from RMB 247,639.2 million in 2023 [14]. - Operating profit for Q4 2024 was RMB 25,592.2 million (US$ 3,506.1 million), up 14% from RMB 22,395.0 million in Q4 2023 [7][10]. - Net income attributable to ordinary shareholders in Q4 2024 was RMB 27,446.6 million (US$ 3,760.2 million), an 18% increase from RMB 23,280.3 million in Q4 2023 [11][37]. Revenue Breakdown - Revenues from online marketing services and others in Q4 2024 were RMB 57,011.1 million (US$ 7,810.5 million), a 17% increase from RMB 48,675.6 million in Q4 2023 [8]. - Revenues from transaction services in Q4 2024 were RMB 53,599.0 million (US$ 7,343.0 million), reflecting a 33% increase from RMB 40,205.4 million in Q4 2023 [8]. Cost and Expenses - Total costs of revenues for Q4 2024 were RMB 47,798.4 million (US$ 6,548.4 million), a 36% increase from RMB 35,078.3 million in Q4 2023, primarily due to higher fulfillment and payment processing fees [6][15]. - Total operating expenses for Q4 2024 were RMB 37,219.5 million (US$ 5,099.1 million), up 19% from RMB 31,407.8 million in Q4 2023, mainly driven by increased sales and marketing expenses [9][10]. Cash and Assets - As of December 31, 2024, cash, cash equivalents, and short-term investments totaled RMB 331.6 billion (US$ 45.4 billion), compared to RMB 217.2 billion as of December 31, 2023 [13]. - Total assets as of December 31, 2024, were RMB 505.0 billion (US$ 69.2 billion), reflecting significant growth from RMB 348.1 billion as of December 31, 2023 [32][33]. Earnings Per Share - Basic earnings per ADS for Q4 2024 were RMB 19.76 (US$ 2.71), compared to RMB 17.00 in Q4 2023 [12][21]. - Non-GAAP diluted earnings per ADS for Q4 2024 were RMB 20.15 (US$ 2.76), up from RMB 17.32 in Q4 2023 [12][42].

Summary of the Conference Call Transcript Company and Industry - **Company**: Pinduoduo (PDD) - **Industry**: Internet and E-commerce Key Points and Arguments 1. **Stock Performance**: Pinduoduo's stock price has remained flat year-to-date, performing in line with the benchmark Chinese internet index, both up by 22% [1][3] 2. **Earnings Visibility**: The upcoming Q4 2024 earnings report, scheduled for March 20, is expected to significantly influence stock performance over the next two months, followed by the Q1 2025 report in May [1][3] 3. **Profit Margin Trends**: Investors are particularly focused on the sequential trends in profit margins, which have declined significantly due to management's decision to reduce monetization from merchants. The adjusted operating profit margin fell by 9 percentage points to 27% in Q3 2024 [3][4] 4. **Expectations for Q4 2024**: - The adjusted net profit margin is expected to decline slightly, with forecasts suggesting a drop of 1.3 to 3 percentage points. A more significant decline (over 5 percentage points) could negatively impact 2025 earnings forecasts [3][4] - Revenue growth is anticipated to slow down, with transaction service revenue growth expected to decrease from 72% in Q3 2024 due to high comparison bases and reduced merchant monetization [3][4] 5. **Online Marketing Services Revenue**: Channel surveys indicate that Pinduoduo's domestic GMV growth in Q4 2024 is expected to exceed 20%, leading to a reasonable year-on-year growth range of 20%-24% for online marketing services revenue [3][4] 6. **Revenue Forecasts**: J.P. Morgan predicts a 33% year-on-year revenue growth for Q4 2024, slightly above market consensus, with online marketing and transaction service revenues expected to grow by 20% and 49%, respectively [3][4] 7. **Investment Rating**: Due to low visibility in financials for the upcoming quarters, Pinduoduo is rated as "Neutral" [5][6] 8. **Valuation**: The target price is set at $105, based on a 10x multiple of annualized earnings for Q3 2024, reflecting the company's long-term competitiveness and short-term visibility issues [6] 9. **Risks to Rating and Target Price**: - Downside risks include greater-than-expected profit declines due to increased investments, high tariffs on Chinese products affecting Temu's growth, and a potential slowdown in Chinese consumer growth [7] - Upside risks include a rebound in profits despite management's investment plans and favorable government policies [7] Other Important but Possibly Overlooked Content - **Limited Disclosure**: The lack of detailed investment plans from management contributes to low short-term financial visibility, impacting the investment rationale for the next six months [5] - **Analyst Disclosures**: The report includes disclaimers regarding potential conflicts of interest due to J.P. Morgan's business relationships with Pinduoduo [2][11]

Industry Rating - The report assigns a "Leading" investment rating to the internet industry, indicating an expectation of attractive performance relative to the benchmark index over the next 12 months [16]. Core Insights - The report highlights that consumption policies are driving growth across multiple categories, with a continued positive impact on Q1 performance expected [1][2]. - E-commerce growth is projected to continue, with an estimated GMV growth of 5% for the industry in 2025, driven by expanded subsidy programs and recovery in demand for home appliances [2][12]. - Specific company forecasts include Alibaba's GMV growth of 4%, JD's at 7%, Pinduoduo's at 13%, Kuaishou's at 12%, Douyin's at 25%, and WeChat Video's at 26% for 2025 [2][12]. Summary by Sections Valuation Overview - Alibaba (BABA US) is rated "Buy" with a target price of 165.0, current price at 141.1, and FY25E EPS of 86.3 [1]. - Pinduoduo (PDD US) is rated "Buy" with a target price of 144.0, current price at 122.5, and FY25E EPS of 104.4 [1]. - JD (JD US) is rated "Buy" with a target price of 62.0, current price at 43.2, and FY25E EPS of 35.1 [1]. - Kuaishou (1024 HK) is rated "Buy" with a target price of 54.0, current price at 64.9, and FY25E EPS of 5.0 [1]. - The average P/E ratio for the covered companies is projected at 13.4 for FY25E [1]. E-commerce Performance - The adjusted year-on-year growth for physical e-commerce retail sales in January-February 2025 is 5.0%, compared to 3.8% in December 2024 [2][5]. - The expansion of the trade-in subsidy program for mobile phones has led to a 26% increase in communication equipment sales, while home appliances continue to show double-digit growth at 11% [2][6]. - The report notes a 22% year-on-year increase in express delivery volume in January-February 2025, attributed to e-commerce activities during holidays [10][11]. Company Updates - Alibaba's Taotian is focusing on growth through new product incentives and enhanced merchant support, with measures including high exposure traffic and commission rebates [2]. - Kuaishou's e-commerce data shows a 25% year-on-year increase in active merchants and a significant rise in GMV across various categories [2]. - JD's food delivery service has expanded to 126 cities, with over 300,000 restaurant partners, indicating a strong focus on enhancing retail synergy [2].

Investment Rating - The report maintains a positive outlook on overseas Chinese assets and the media sector, focusing on cyclical, undervalued, and fundamentally supported targets [1][2]. Core Insights - Recent policies aimed at boosting consumption have been frequent, with a focus on cyclical sectors and undervalued assets with strong fundamentals. The government has prioritized expanding domestic demand as a key task for the year [1][2][15]. - The report highlights the resilience of leading internet platforms and the potential for a revaluation of Chinese assets, despite possible short-term volatility following rapid price increases [2][6]. - The report suggests specific stocks to watch, including Tencent Holdings, Pinduoduo, and Wanda Film, among others, emphasizing the importance of fundamental support and low valuations [2][6]. Summary by Sections Recent Developments - The government has launched initiatives to stimulate consumption, including a special action plan to enhance consumer spending and financial support for families [15]. - The media sector has seen a 2.21% increase in the week of March 10-14, driven by cyclical segments such as cinema and advertising [2][6]. Industry Policies and News - The report notes significant policy updates aimed at enhancing consumer finance and overall market conditions, which are expected to positively impact the media sector [15]. - Recent financing events in the gaming sector indicate ongoing investment interest, with notable funding rounds for startups [17][18]. Weekly Data Tracking - The total box office revenue from March 8-14 was 510 million yuan, reflecting a 28.9% decrease from the previous week, attributed to seasonal market trends [19][20]. - The report tracks the performance of television dramas and variety shows, noting shifts in viewership and market share among leading platforms [26][29]. Company Valuation Updates - The report indicates that the A-share media sector has seen price increases across various segments, with Wanda Film showing the highest growth at 10.70% during the tracking period [33].

以下文章来源于明亮公司 ，作者主编24小时在线 明亮公司 . 追踪新商业、好公司，提供一手情报与领先认知。 作者：苏打 出品：明亮公司 ！ 近日，有消息称拼多多已组建电商推荐大模型团队，负责人为原百度凤巢的核心成员。尽管拼多多并未正面回应，但这一消息一度引发广 泛关注。 作为几乎唯一一个"缺席"AI大模型布局的万亿规模体量"大厂"，市场对拼多多AI战略规划的关注或许并非大模型乃至AI本身，而是起家于C 端的巨头公司们，对未来不同发展路径的判断模型。 我们的一个观察是，阿里实际上与美国几家大厂的模式更为接近——未来承诺更大规模的资本支出；而拼多多作为其中看似"异类"的代表， 仍专注于C端用户体验、供应链效率和出海。 值得一提的是，它们均拥有大量C端用户， 但有些选择最终将自己凝聚成具备"核心技术"的to B服务商 ，而有些选择持续深耕消费端，并于 其中攫取最强心智和竞争力。 而近期的资本市场表现，也一定程度上反映出其对两种不同方向的预期。截至发稿，阿里巴巴TTM市盈率约19.9倍；拼多多约11.6倍——市 场暂时写好了答案。 拼多多的克制：是「应用」还是做模型 大模型浪潮兴起后，阿里、百度、字节等是最先摆明态度 ...