Core Insights - Pinduoduo reported its Q2 2025 unaudited financial results, showing revenue of RMB 1,039.8 billion, a year-on-year increase of 7%, while net profit decreased by 4% to RMB 307.5 billion [1] - The adjusted net profit under Non-GAAP was RMB 327.1 billion, exceeding market expectations of RMB 223.9 billion, but still down 5% year-on-year [1][2] - The company’s earnings per ADS (American Depositary Share) was RMB 22.07, surpassing the market forecast of RMB 15.50, leading to a nearly 10% pre-market stock price increase [2] Financial Performance - Revenue was primarily driven by online marketing services and transaction services, with online marketing services and other income reaching RMB 557.03 billion, a 13% increase year-on-year, while transaction service revenue was RMB 482.82 billion, slightly up from RMB 479.44 billion in the same period last year [5] - Total cost of revenue for Q2 was RMB 458.59 billion, reflecting a significant year-on-year increase of 36%, attributed to rising fulfillment costs, bandwidth and server expenses, and payment processing fees [6] Asset Overview - As of June 30, 2025, Pinduoduo's cash, cash equivalents, and short-term investments totaled RMB 387.1 billion, up from RMB 331.6 billion as of December 31, 2024 [6] - Total assets were reported at RMB 505.03 billion, down from RMB 567.16 billion at the end of 2024 [4]

Core Viewpoint - Pinduoduo's Q2 2025 financial report shows a revenue of approximately 104 billion yuan, with a year-on-year growth rate slowing to 7%, and a net profit of 30.75 billion yuan, marking a 4% decline compared to the previous year, continuing a downward trend for two consecutive quarters [2][5]. Financial Performance - In Q1 2025, Pinduoduo achieved a revenue of 95.672 billion yuan, reflecting a year-on-year growth of 10%. However, in Q2, the revenue growth further slowed to 7% [5]. - The Q2 revenue of approximately 104 billion yuan was primarily driven by growth in online marketing services and transaction service revenues, with online marketing services generating about 55.7 billion yuan, a 13% increase from approximately 49.1 billion yuan in the same period of 2024. Transaction service revenue was around 48.3 billion yuan, slightly up from approximately 47.9 billion yuan in 2024 [7]. Strategic Focus - Pinduoduo emphasizes long-term ecological investments over short-term profits, as stated by the co-CEO Zhao Jiazhen, indicating a willingness to sacrifice immediate profits for sustainable growth [2][3]. - The company has initiated a "trillion support" strategy, committing over 100 billion yuan in resources over the next three years to enhance the quality of its e-commerce ecosystem, which has impacted short-term performance [6][11]. Market and Industry Dynamics - Pinduoduo's agricultural product sales have seen significant growth, with overall sales increasing by 47% year-on-year, and seasonal fruit and seafood sales rising by 51% and 48%, respectively [11]. - The company is also focusing on global expansion, increasing subsidies for overseas merchants, and exploring new business models to adapt to the competitive landscape [11].

Core Viewpoint - Pinduoduo emphasizes long-term investments over short-term performance in the competitive e-commerce industry, focusing on enhancing user experience and optimizing merchant services to create a multi-win ecosystem [1] Group 1: Company Strategy - Pinduoduo is committed to its "100 billion support" strategy, investing real capital to improve user experience and promote industry upgrades [1] - The company aims to guide the industry towards a more inclusive and open direction, creating greater positive value for society [1] Group 2: Industry Context - The e-commerce industry is currently experiencing intense competition centered around new business models [1]

Core Viewpoint - Pinduoduo's second-quarter revenue growth slowed to 7%, with a total revenue of 104 billion yuan, due to increased investments in high-quality development and the introduction of a new "trillion support" strategy to assist merchants [2][4]. Group 1: Financial Performance - Pinduoduo reported a revenue of 104 billion yuan for the second quarter, reflecting a 7% growth rate [2]. - The company has initiated a "trillion support" strategy to enhance merchant support, marking a significant increase in investment for high-quality development [2][4]. Group 2: Merchant Support Initiatives - The "trillion support" strategy builds on the previous "billion reduction" initiative, which has saved millions for merchants by reducing service fees [4]. - Over the past year, the "billion reduction" policy has helped millions of merchants lower operational costs, with promotional service fee refunds exceeding 10 billion yuan [4]. Group 3: Regional Economic Impact - Pinduoduo's "e-commerce westward" initiative has eliminated logistics transfer fees in western regions, leading to over 40% growth in order volume from these areas [4]. - The initiative has significantly increased the availability of various products in western regions, enhancing local consumers' quality of life [5]. Group 4: Agricultural Development - Pinduoduo's support has enabled local farmers, such as those in Yunnan's Zhaotong, to transform their agricultural products into branded items, increasing income for over 11,000 households [6]. - The "2025 Agricultural Products Upward Report" indicates a 47% year-on-year increase in agricultural product sales, with seasonal fruit sales up by 51% [6]. Group 5: Innovation and Market Adaptation - Pinduoduo is focusing on long-term strategies to assist traditional brands in adapting to market changes, enhancing product innovation and market growth [9]. - The company is leveraging digital technology to help merchants identify potential best-selling products, significantly increasing profit margins for many items [9]. Group 6: Consumer Engagement - During the 618 shopping festival, Pinduoduo experienced a surge in consumer demand, with daily orders exceeding 3.76 million for its "super double" promotional event [10]. - The platform's ongoing investments are aimed at enhancing user experience and optimizing merchant services, fostering a win-win ecosystem for users, merchants, and the platform [12].

Core Viewpoint - Pinduoduo's Q2 2025 financial report shows a slowdown in revenue growth to 7%, with total revenue of 104 billion yuan and a net profit decline of 4% year-on-year, marking two consecutive quarters of profit decrease [1] Financial Performance - Revenue for Q2 2025 reached 104 billion yuan, a 7% increase year-on-year [1] - Net profit for the quarter was 30.75 billion yuan, down 4% compared to the same period last year [1] - Revenue from online marketing services and other businesses was 55.7032 billion yuan, up 13% from 49.1159 billion yuan in Q2 2024 [1] - General and administrative expenses were 1.53 billion yuan, below the estimated 1.91 billion yuan; R&D expenses were 3.59 billion yuan, slightly above the estimated 3.5 billion yuan [1] Strategic Initiatives - Pinduoduo launched a new "trillion support" strategy in Q2, aimed at enhancing merchant support and industry development [1] - The company has implemented the "hundred billion reduction" policy, which has saved millions for merchants through various fee reductions [2] - The "e-commerce westward" initiative has eliminated logistics transfer fees in western regions, leading to over 40% growth in order volume in that area [2] Agricultural Development - Pinduoduo's "DuoDuo Good Specialty" initiative has significantly increased agricultural product sales, with a 47% year-on-year growth in overall agricultural product sales and a 51% increase in seasonal fruit sales [3] - The platform's agricultural merchant count has grown by over 30% among post-00s merchants [3] - The company is investing in agricultural research, with the fifth "DuoDuo Agricultural Research Technology Competition" attracting 46 teams globally [3] Long-term Vision - Pinduoduo emphasizes a long-term approach, prioritizing sustainable development and ecosystem building over short-term profits [2][4] - The company aims to create a multi-win ecosystem for users, merchants, and the platform, driving the industry towards a more inclusive and open future [4]

Core Viewpoint - Pinduoduo's Q2 2025 financial report shows a revenue growth slowdown to 7%, with quarterly revenue reaching 104 billion yuan, attributed to increased investment in high-quality development and the launch of the "trillion support" strategy to assist merchants [1] Group 1: Financial Performance - Pinduoduo's revenue for Q2 2025 was 104 billion yuan, reflecting a 7% growth rate [1] - The company has increased its investment in high-quality development, impacting short-term performance but aiming for long-term value [1] Group 2: Merchant Support Initiatives - The "trillion support" strategy was introduced to help merchants navigate challenges, building on the previous "billion reduction" initiative [1] - Over the past year, the "billion reduction" policy has saved millions of merchants significant operational costs, with promotional service fee refunds exceeding 10 billion yuan [2] Group 3: Regional Economic Impact - Pinduoduo's "e-commerce westward" initiative has eliminated logistics transfer fees in western regions, leading to over 40% growth in order volume in these areas [2] - The initiative has significantly increased the availability of various products in western regions, enhancing local consumers' quality of life [5] Group 4: Agricultural Development - The "2025 Multi-Quality Specialty Products" initiative has facilitated the entry of agricultural products into urban markets, with sales of agricultural products increasing by 47% year-on-year [7] - Pinduoduo's support has enabled local farmers to innovate and create new products, such as the "internet celebrity" potato chips from Yunnan, benefiting over 11,000 farmers [7] Group 5: Industry Transformation - Pinduoduo is focusing on upgrading traditional industries by providing targeted support to merchants in various sectors, enhancing product development success rates [9] - The company is also collaborating with traditional brands to adapt to market changes, helping them find new growth opportunities [9] Group 6: Research and Development - Pinduoduo has increased investment in agricultural research, hosting the "Multi-Research Technology Competition" to explore advanced agricultural technologies [11] - The company aims to enhance user experience and merchant services while promoting industry upgrades through its "trillion support" strategy [11]

Core Insights - Pinduoduo's Q1 2025 financial report shows revenue of 957 billion yuan, a 10% year-on-year increase, but operating profit decreased by 38% to 160.856 billion yuan, leading to a nearly 14% drop in stock price [1][2] - The apparent underperformance is attributed to Pinduoduo's strategic choice to prioritize sustainable high-quality development over short-term profits amid a changing e-commerce landscape [2][6] Group 1: Strategic Choices Behind Performance - Pinduoduo's decision to focus on long-term investments rather than short-term gains is evident in its "billion subsidy" and "e-commerce westward" initiatives aimed at supporting small and medium-sized businesses and tapping into potential consumer markets in western regions [4][5] - The company has significantly increased marketing expenses to 334 billion yuan, nearly 100 billion yuan more than the previous year, reflecting its commitment to supporting merchants and upgrading the industry [4][5] Group 2: Long-term Investment and Ecosystem Building - Pinduoduo's "billion subsidy" strategy, launched in April 2025, aims to provide differentiated support to various product categories, fostering a win-win ecosystem for platforms, merchants, and consumers [7][8] - The company emphasizes the importance of integrating resources across the platform to enhance merchant stability and operational efficiency, which is crucial for long-term growth [5][6] Group 3: Industry Trends and Competitive Advantage - Pinduoduo's approach aligns with the broader trend in the e-commerce industry towards high-quality development, contrasting with competitors focused on short-term traffic gains [6][20] - The company's initiatives demonstrate a deep understanding of the industry's fundamental dynamics, emphasizing the need for a robust supply chain and improved product quality to meet evolving consumer demands [5][20] Group 4: Case Studies of Support Initiatives - In agriculture, Pinduoduo's "2025 Duoduo Good Specialty" initiative enhances product standards and supply chain efficiency, benefiting both merchants and consumers [8][10] - In manufacturing, the "new quality supply" initiative helps brands like KOMERY innovate and reduce costs, leading to significant market success [11][12] Group 5: Consumer Engagement and Market Expansion - Pinduoduo's targeted subsidy programs, such as the "100 million merchant feedback plan," effectively stimulate diverse consumer demands and enhance product offerings [14][16] - The establishment of the "Merchant Rights Protection Committee" signifies Pinduoduo's shift from a traffic platform to an ecosystem builder, enhancing merchant support and operational efficiency [17][19]

Investment Rating - The report maintains a "Buy" rating for Pinduoduo (PDD US) with a target price adjusted from $165 to $135, indicating a potential upside of 31.1% from the current price of $102.98 [2][3][12]. Core Insights - The company's Q1 2025 performance fell short of expectations, with revenue and gross profit impacted by tariff uncertainties affecting TEMU and rising short-term logistics costs. The mainland e-commerce advertising revenue growth met expectations, but net profit was below forecasts due to increased subsidies in response to national policies [3][7]. - The report anticipates continued pressure on profits in Q2 2025 due to these factors, leading to a downward revision of revenue and profit forecasts by 9% and 25% respectively for 2025 [3][4]. - The long-term outlook remains positive, with expectations for a return to normalized profit levels by 2026, supported by strategic adjustments and merchant support plans [3][4]. Financial Forecast Summary - Revenue projections for 2025 have been revised to RMB 449.83 billion, down from RMB 496.41 billion, reflecting a 9.4% decrease. For 2026 and 2027, revenue is expected to be RMB 556.01 billion and RMB 630.39 billion, respectively [4][15]. - Adjusted net profit for 2025 is forecasted at RMB 104.83 billion, a 25.4% decrease from previous estimates, with further declines expected in 2026 and 2027 [4][15]. - The adjusted operating profit margin is projected to decline from 28.5% in 2024 to 24.6% in 2025, with a gradual recovery anticipated thereafter [4][15]. Performance Metrics - The report highlights a significant drop in adjusted net profit for Q1 2025, which fell 45% year-on-year to RMB 16.92 billion, significantly below consensus estimates [7][8]. - The gross margin for Q1 2025 was reported at 57%, down from 62% in the previous quarter, indicating pressure on profitability [8][9]. - The company's market capitalization is approximately $143.36 billion, with a year-to-date change of 6.18% [6][10].

Core Viewpoint - The market reaction to Pinduoduo's disappointing earnings was severe, with the stock price dropping over 20% in pre-market trading following the release of the Q1 financial report, which showed significant declines in both revenue and profit compared to expectations [1][2]. Financial Performance - Pinduoduo reported Q1 revenue of 956.7 billion RMB, a 10% year-on-year increase, but below the expected 1,016 billion RMB [2][5]. - The net profit for the quarter was 147.42 billion RMB, a dramatic 47% decline year-on-year, while the adjusted net profit was 169.2 billion RMB, falling short of the anticipated 278.8 billion RMB [2][5]. - The operating profit was 160.856 billion RMB, with an operating margin of 17%, and the cash flow from operating activities was 155.2 billion RMB [2][3]. Revenue Structure - Online marketing service revenue reached 487.22 billion RMB, up 15% year-on-year, exceeding expectations [2]. - Transaction service revenue was 469.50 billion RMB, a 6% increase year-on-year, but below the expected 542.3 billion RMB, indicating a slowdown in transaction volume growth [2][5]. Cost and Expenses - Sales and marketing expenses surged to 334.03 billion RMB, a 43% increase year-on-year, primarily due to heightened competition and rising customer acquisition costs [3]. - Operating costs rose to 409.47 billion RMB, a 25% increase, driven by higher fulfillment and payment processing costs [3]. Strategic Initiatives - Pinduoduo has implemented a "1,000 billion support" strategy to assist merchants, indicating a commitment to long-term investment despite short-term profit sacrifices [5][6]. - The management emphasized the importance of supporting merchants through challenging market conditions, focusing on high-quality development and cost reduction initiatives [6][7]. Management Commentary - Pinduoduo's leadership acknowledged the pressures faced by merchants and the need for substantial investments in the platform's ecosystem to navigate external challenges [6][7]. - The company aims to prioritize the interests of users and merchants, believing that this approach will foster a healthier platform ecosystem in the long run [6][7].

Core Viewpoint - Pinduoduo's Q1 2025 financial report shows a revenue growth of 10% year-on-year, but a significant net profit decline of 47%, attributed to increased strategic investments aimed at supporting merchants [1][4]. Financial Performance - Pinduoduo reported a revenue of 957 billion yuan for Q1 2025, marking a 10% increase year-on-year, continuing a trend of slowing growth [1][4]. - The net profit attributable to ordinary shareholders was approximately 147 billion yuan, down 47% year-on-year, while the Non-GAAP net profit was 169.2 billion yuan, a 45% decline [4]. - The decline in net profit is primarily due to the company's proactive "trillion support" strategy, which includes commission reductions and enhanced support for merchants [4]. Strategic Initiatives - Pinduoduo has launched the "trillion support" strategy to assist merchants, which includes measures like commission reductions and supply chain optimization [5][6]. - The company established the "Merchant Rights Protection Committee" to better understand merchant needs and improve service mechanisms [5]. - The "trillion support" initiative aims to extend support from top-tier to small and medium-sized merchants, creating more operational and innovative space for them [5][6]. Market Response - Following the financial report, Pinduoduo's stock price fell over 20% in pre-market trading, dropping below $100 per share [2].