China's PDD shares slide after weak consumer spending dents revenue
Adds analyst comment in paragraph 5 and 6, updates share price in paragraph 1
Aug 26 (Reuters) -China's PDD Holdings PDD.O missed market estimates for quarterly revenue on Monday, as reduced consumer spending dented business at its domestic e-commerce platform Pinduoduo, sending the company's shares down more than 18% in pre-market trading.
A fragile economy, persistent weakness in the property sector and high unemployment rates, have led Chinese consumers to cut back, damaging the country's retail and e-commerce sectors.
"While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead," Chairman and Co-Chief Executive Officer Chen Lei, said.
"We will invest heavily in the platform's trust and safety, support high-quality merchants, and relentlessly improve the merchant ecosystem. We are prepared to accept short-term sacrifices and potential decline in profitability."
M Science analyst Vinci Zhang said he was surprised by PDD Holdings' performance.
"We know there's a consumer spending slowdown, but there was hope that maybe PDD being the budget product platform with cheaper offerings can capture this slowdown but it turns out that they are also losing," Zhang said.
While Pinduoduo's low prices and steep discounts on anything from groceries to earphones have attracted cost-conscious shoppers, the company has been under pressure as major rivals have offered shopping deals on their own platforms.
"Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges... Profitability will also likely be impacted as we continue to invest resolutely," said Jun Liu, vice president of finance at PDD.
Chinese e-commerce giant Alibaba 9988.HK missed market estimates for revenue earlier this month, pinched by weaker domestic e-commerce sales, while JD.com's 9618.HK quarterly revenue grew only 1.2%.
PDD reported revenue of 97.06 billion yuan ($13.64 billion) in the second quarter, compared with analysts' average estimate of 100 billion yuan, according to LSEG data.
Operating expenses rose by 48% in the three months ended June 30, as the company invested in marketing, advertising and promotions to attract shoppers.
General and administrative costs more than tripled in the quarter to 1.84 billion yuan, because of staff-related expenses.
($1 = 7.1173 Chinese yuan renminbi)
Reporting by Deborah Sophia in Bengaluru and Sophie Yu in Beijing; Editing by Pooja Desai, Himani Sarkar and Barbara Lewis
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
