Pinduoduo Inc (PDD), China’s largest online retailer by consumers reported sales reported a surprise second-quarter profit with revenue nearly doubled!
This the firm’s first ever quarterly net profit as a listed company.
The company swung to net income of RMB2.41 billion ($373.97 million) this quarter, compared to a loss of RMB899.35 million YoY. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB4,125.3 million (US$638.9 million), compared with non-GAAP net loss of RMB77.2 million in the same quarter of 2020.
Revenue surged 89.0% to RMB23.05 billion ($3.57 billion), with Average monthly active users increasing 30% to 738.5 million and active buyers in the 12-month period ended June 30 increased 24% to 849.9 million.
As of End June 2021, PDD has 92,181 million yuan of cash, cash equivalents and short-term investments.
PDD pledge to commit this and future earnings towards the development of agriculture until it has given away a total of 10 billion yuan (USD1.5 billion).
Many of people thought PDD is a just another e-commerce company with group buy strategy. It is not. PDD has been investing heavily on the agriculture business in China.
Read previous post on PDD to understand more. Will Pinduoduo Inc (PDD) Keep on Growing?
With the announced profit, the stock is up more than 15% since trading opens on Tuesday. Despite that, the stock is still almost 38% down over the past three months, and more than 100% down since it’s all time and YTD share price high of over $200 per share.
That said, I continue to be bullish on PDD’s long term future unless the Chinese government injects poison yet again to the private owned Chinese stock market.
So if you cannot take heart attacks from the Chinese government, please consider carefully if you will like to invest in this stock.
PS: I am invested in PDD.