PDD extends pre-market decline, now down over 20%

PDD extends pre-market decline, now down over 20%

Chinese e-commerce giant PDD Holdings (PDD) has seen its stock continue to decline in pre-market trading, now down by over 20% after missing Wall Street estimates for first-quarter revenue. The company reported revenue of 95.67 billion yuan ($13.30 billion) for the quarter ended March 31, compared to analysts' average estimate of 102.51 billion yuan [1].

The primary factors contributing to the revenue shortfall include persistently weak consumer sentiment in China's domestic market and global trade uncertainty affecting its international business, Temu. Despite deep price cuts by retailers and government stimulus measures to boost spending, a prolonged property crisis has cast a shadow over consumer spending [1].

Both Pinduoduo and Temu leverage PDD's extensive network of suppliers in China to offer products at low prices. However, shifting global trade policies, such as the recent tariff rate slashes for goods under $800 entering the U.S., could make it challenging for Temu to avoid price increases in the future [2].

PDD's net income also fell 47% to 14.74 billion yuan in the quarter from 28 billion yuan a year earlier [1]. The company's shares have been impacted by the broader market sentiment and geopolitical risks, including the ongoing U.S.-China trade tensions.

Investors should closely monitor PDD's future performance and any potential adjustments to its pricing strategies, particularly in light of the evolving global trade landscape.

References:
[1] https://finance.yahoo.com/news/temu-owner-pdd-holdings-misses-103739145.html
[2] https://www.investing.com/news/stock-market-news/temuowner-pdd-holdings-misses-quarterly-revenue-estimates-4064594