PDD(US:PDD)2025-08-25 12:32Financial Data and Key Metrics Changes - In Q2 2025, total revenues increased by 7% year over year, driven by growth in online marketing services and transaction services [22] - Operating profit declined by 21% year over year, reflecting the company's commitment to long-term investments over short-term financial results [7][27] - Non-GAAP operating profit margin decreased to 27% from 36% in the same quarter last year [27] - Net income attributable to ordinary shareholders decreased by 4% year over year [28] Business Line Data and Key Metrics Changes - Revenues from online marketing services increased by 30% year over year [22] - Revenues from inspection services grew by 1% compared to the same quarter last year [22] - Total cost of revenues increased by 36% from RMB 33.7 billion in Q2 2024 to RMB 45.9 billion in Q2 2025, primarily due to higher fulfillment fees and payment processing fees [23] Market Data and Key Metrics Changes - The company observed a 40% growth in order numbers from remote regions due to logistic support initiatives [8] - The June 18 shopping festival saw record sales across multiple categories, indicating strong consumer demand [10][20] Company Strategy and Development Direction - The company launched a RMB 100 billion support program to invest in the merchant ecosystem and drive long-term value creation [6][14] - Focus on high-quality growth by creating long-term opportunities for merchants and investing in consumer experience [11][20] - The company aims to deepen its support for individual merchants and explore new business models in response to intensified competition [34][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the rapid changes in the external environment and the challenges faced by merchants [6] - The company remains committed to long-term value creation, even if it leads to fluctuations in profitability [11][59] - Management expressed confidence in the potential of China's consumer market, despite escalating competition [61] Other Important Information - The company is actively investing in agri-tech and has launched initiatives to support agricultural technology research [10][11] - The total grocery business is viewed as a meaningful long-term investment, with plans to deepen commitments across product quality and delivery efficiency [52] Q&A Session Summary Question: Insights on revenue growth rate narrowing and competitive dynamics - Management noted intensified competition leading to slower revenue growth and emphasized a proactive approach to strengthen the platform ecosystem [34][35] Question: Future directions for global business and growth opportunities - Management highlighted steady consumer demand and the need for continuous investment in supply chain capabilities to adapt to changing market conditions [38][39] Question: Key changes observed since the RMB 100 billion support program launch - Management reported early effects of the support program, including increased merchant efficiency and market reach [45][46] Question: Company's view on the grocery business amidst competition - Management affirmed commitment to the grocery business, emphasizing the importance of creating unique value and addressing supply chain challenges [49][52] Question: Stability of investment cycle and profit margin trends - Management indicated that Q2 profits benefited from seasonality and that fluctuations in profitability are expected in the coming quarters [57][59] Question: Updates on consumer sentiment and macro trends - Management observed steady growth in retail sales and online penetration, while acknowledging the competitive landscape's impact on consumer behavior [61][63]