PDD(US:PDD) Zhong Guo Neng Yuan Wang·2025-05-28 10:45Core Viewpoint - Pinduoduo's Q1 2025 financial results showed a revenue of 95.6722 billion yuan, a 10% year-on-year increase, but below market expectations of 101.6 billion yuan. Net profit attributable to ordinary shareholders was 14.7418 billion yuan, a 47% decline year-on-year, indicating challenges in maintaining profitability amid rising costs and competitive pressures [1][2]. Revenue Structure - The revenue from online marketing services and other services was 48.722 billion yuan, a 15% year-on-year increase. Transaction service revenue was 46.955 billion yuan, a 6% year-on-year increase, but below the expected 54.231 billion yuan, suggesting a slowdown in transaction volume growth [1]. Cost and Profitability - Sales and marketing expenses surged by 43% to 33.403 billion yuan, primarily due to increased competition and customer acquisition costs, which significantly impacted profit margins. Additionally, operating costs rose by 25% year-on-year, driven by higher fulfillment and payment processing expenses [1][2]. Market Environment and Strategy - The company acknowledged that the changing market environment and new challenges have led to a slowdown in revenue growth, which is also influenced by fluctuations in the foreign exchange market. The chairman emphasized the need to sacrifice short-term performance to support merchants through temporary fluctuations [1][2]. Long-term Focus - The CFO pointed out that the combination of business scale expansion, intensified competition, and increased external uncertainties has contributed to the slowdown in growth. The company is focused on long-term intrinsic value enhancement rather than quarterly financial performance, with ongoing investments in its ecosystem [2]. Stock Market Reaction - Following the earnings release, Pinduoduo's stock price experienced a pre-market drop of over 20%, ultimately closing down nearly 14% [3].