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Investing.com -- PDD Holdings Inc. shares jumped over 11% premarket on Monday after the e-commerce giant reported second-quarter earnings that significantly exceeded analyst expectations, despite facing intense competition in the Chinese market.
The parent company of Pinduoduo posted adjusted earnings of RMB22.07 per ADS for the quarter ended June 30, 2025, substantially beating the analyst consensus of RMB14.80. Revenue rose 7% YoY to RMB103.98 billion ($14.52 billion), slightly above the consensus estimate of RMB103.2 billion.
Despite the revenue beat, PDD’s non-GAAP operating profit decreased 21% YoY to RMB27.75 billion ($3.87 billion), while non-GAAP net income attributable to shareholders fell 5% to RMB32.71 billion ($4.57 billion) compared to the same period last year.
"In the past quarter, we continued to invest in merchant support initiatives, and are encouraged by the progress made towards a healthier and more sustainable platform ecosystem," said Mr. Lei Chen, Chairman and Co-Chief Executive Officer of PDD Holdings.
The company attributed its slower revenue growth to intensifying competition in the e-commerce sector. "Revenues growth further moderated this quarter amid intense competition," noted Ms. Jun Liu, VP of Finance of PDD Holdings. "As we remain focused on long-term value creation, the sustained investments may continue to weigh on short-term profitability."
Revenue from online marketing services and others increased 13% YoY to RMB55.70 billion ($7.78 billion), while transaction services revenue remained relatively flat at RMB48.28 billion ($6.74 billion).
Total operating expenses rose 5% YoY to RMB32.33 billion ($4.51 billion), primarily due to increased sales and marketing expenses.