PDD Holdings Shares Plummet 28% on Q2 Revenue Miss and Slowing Growth Outlook

PDD Holdings (NASDAQ:PDD) saw its shares nosedive by over 28% on Monday after reporting second-quarter revenue that missed analyst expectations, sparking concerns about slowing growth. The Chinese e-commerce company posted revenue of RMB97.06 billion ($13.36 billion), an 86% year-over-year increase but below the anticipated RMB99.42 billion. Despite beating earnings estimates with adjusted EPS of RMB23.24 ($3.20), the market reacted negatively to PDD's cautious outlook.

The company warned that revenue growth would face mounting challenges amid intensifying competition and external pressures. PDD Holdings also acknowledged a slowdown in its revenue growth rate quarter-on-quarter, raising concerns about its profitability moving forward. Jun Liu, VP of Finance, noted that continued investment would likely pressure future earnings.

Despite a sharp increase in operating profit, which surged 156% year-over-year to RMB32.56 billion ($4.48 billion), and a 144% jump in net income to RMB32.01 billion ($4.40 billion), investors were wary of the company's long-term outlook. Chairman and Co-CEO Lei Chen reiterated PDD's focus on high-quality development, indicating that the company is willing to endure short-term profitability declines as it navigates the competitive landscape.