Sales of the Pinduoduo Internet platform are a billion higher than expected

At the beginning of the week, the Chinese e-commerce platform Pinduoduo Inc. (PDD) presented the second quarter’s results. The results were much higher than Wall Street forecasts because the quotes at the auction on August 30 soared by more than 14%. At the auction on August 31, the PDD stock was worth $66.5. Pinduoduo’s revenue grew 36% year-on-year in the second quarter to $4.69 billion, more than a billion dollars more than Wall Street analysts predicted. According to their assumptions, the revenue of the Internet platform was supposed to be about $ 3.5 billion. 

The momentum of the last quarter is due, among other things, to the fact that Pinduoduo has become the largest online market for agricultural products in China. The company achieved this by eliminating commissions for sellers selling agricultural products. As a result, Pinduoduo outperformed its competitors, such as Alibaba and JD.com, which reported a slight increase simultaneously. Pinduoduo’s operating profit was also better than expected. Last quarter, the company managed to control sales and marketing expenses, which helped to triple the operating profit to $1.58 billion. 

Adjusted earnings per share increased by 165% to $1.13, while Wall Street forecast only $0.39 per share. While the management of Pinduoduo has not provided estimates for future periods, the company noted that it would continue to invest in areas such as agriculture, research, and development. Pinduoduo, which is preparing to expand its operations into international markets, will benefit from the news that the USA and China are getting closer to reaching an agreement that could prevent the delisting of Chinese shares on US exchanges. It also will result in an additional boost to the price of Pinduoduo shares.