U.S.-listed shares of PDD Holdings soared Tuesday after the company reported earnings that easily topped estimates. PDD stock closed more than 15% higher on the day.
The operator of the Chinese e-commerce platform Pinduoduo and international marketplace Temu reported a 66% revenue jump to $7.21 billion for the quarter ended June 30. Meanwhile, analysts surveyed by FactSet expected sales of $5.95 billion. The company earned an adjusted $1.44 per U.S. share, also ahead of analyst estimates of $1.
"Over the recent quarter, we saw a positive shift in consumer sentiment, leading to a rise in demand across various product sectors," said Jiazhen Zhao, co-chief executive of PDD Holdings.
PDD shares surged 15.4% to close at 93.22 on the stock market today.
PDD Holdings includes e-commerce platform Pinduoduo, discount retail platform Temu and several subsidiaries, including real estate and technology companies. Also, Temu has been among the fastest-growing apps by download in the U.S. this summer.
PDD Stock: Retailers Compete On Discounts
The company said net income attributable to shareholders in the quarter was $1.81 billion, an increase of 47% from the same period last year.
In response to a sluggish economy, major Chinese online retailers have been competing to offer discount prices. The electronics-focused JD.com earlier this month reported earnings that topped Wall Street's expectations. Analysts partially credited that to a $1.5 billion discount campaign launched in the spring.
On the company's earnings call, PDD's Zhao credited billions in coupons and increased promotional efforts around the June 18 shopping festival. Further, he said that stimulated demand, according to a transcript published by FactSet.
Also, the American-listed shares of Chinese companies such Alibaba, Baidu and PDD got a boost on Monday after the Chinese government announced it would halve a stamp duty collected on stock purchases.
PDD stock holds a Composite Rating of 90 out of a best-possible 99, according to IBD Stock Checkup.
