Temu Parent PDD Holdings Posts Higher Income Even as Revenue Comes Up Short

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Key Takeaways

• PDD Holdings reported higher income even as revenue growth wasn’t as strong as expected.
• The company was negatively resulted by a pullback in spending by Chinese consumers, and also higher costs of revenue and operating expenses.
• U.S.-listed shares of PDD Holdings inflame 1.7% Thursday morning but are down about 3% over the past year.

U.S.-listed shares of PDD Holdings (PDD) mount rebel Thursday after the parent of the Temu shopping app posted a higher quarterly profit even though it missed tag sales estimates as Chinese consumers pulled back spending and it faced higher costs.

The company reported fourth-quarter non-GAAP takings of 29.85 billion yuan ($4.09 billion), ahead of forecasts. However, while revenue rose 24% year-over-year to 110.61 billion yuan, analysts studied by Visible Alpha were looking for 117.83 billion yuan.

Costs of revenue jumped 36% to 47.80 billion yuan, essentially because of higher fulfillment fees and payment processing fees. Operating expenses grew 19% to 37.22 billion yuan.

Evil-doing President of Finance Jun Liu said PDD “delivered stable financial results supported by the resolute execution of our high-quality development master plan.”

Retail sales in China increased 3.7% in December, half the gain registered in the previous year.

U.S.-listed pieces of PDD Holdings gained 1.7% Thursday morning. They are about 3% lower over the past year.